(] COP Board of Governors of the Federal Reserve System

FRY-6 OMB Number7100-0297 Approval expires December 31 2015 Page 1of2

Annual Report of Holding Companies-FR Y-6

Report at the close of business as of the end of fiscal year

This Report is required by law Section 5(c)(1)(A) of the Bank Holding Company Act (12 USC sect 1844 (c)(1)(A)) Section B(a) of the International Banking Act (12 USC sect 3106(a)) Sections 11(a)(1) 25 and 25A of the Federal Reseive Act (12 USC sectsect 248(a)(1) 602 and 611a) Section 21113(c) of Regulation K (12 CFR sect 21113(c)) and Section 2255(b) of Regulation Y (12 CFR sect 2255(b)) and section 10(c)(2)H) of the Home Owners Loan Act Return to the appropriate Federal Reseive Bank the original and the number of copies middotspecified

NOTE The Annual Report of Holding Companies must be signed by one director of the top-tier holding company This indivldual should also be a senior official of the top-tier holding company In the event that the top-tier holding company does not have an individual who is a senior official and is also a director the chairshyman of the board must sign the report

1 Timothy G Marshall Name of the Holding Company Director and Official

President amp CEO TiUe of the Holding Company Director and Official

attest that the Annual Report of Holding Companies (including the supporting attachments) for this report date has been preshypared in conformance with the instructions issued by the Federal Reseive System and are true and correct to the best of my knowledge and belief

With respect to information regarding individuals contained in this report the Reporler certifies that it has the authority to provide this information to the Federal Reserve The Reporter also certifies that it has the authority on behalf of each individual to consent or object to public release of information regarding that individual The Federal Reserve may assume in the absence of a request for confidential treatment submitted in accordance with the Boards Rules Regarding Availability of Information 12 CFR Part 261 that the Reporter JmSi individual consent to public release of all deerportconc miR

Date of Signature

For holding companies not registered with the SEC-Indicate status of Annual Report to Shareholders

181 is Included with the FR Y-6 report

D will be sent under separate cover

D is not prepared

For Federal ResdliUse 07 RSSD ID SL 3 yO

CI

This report form is to be filed by all top-tier bank holding compashynies and top-tier savings and loan holding companies organized under US law and by any foreign banking organization that does not meet the requirements of and is not treated as a quallfyshying foreign banking organization under Section 21123 of Regulation K (12 CFR sect 21123) (See page one of the general instructions for more detail of who must file) The Federal Reseive may not conduct or sponsor and an organization (or a person) is not required to respond to an information collection unless it displays a currently valid OMB control number

Date of Report (top-tier holding companys fiscal year-end)

December 31 2014 Month I Day I Year

lolt-Reporters legal Entity Identifier (LEI) (20-Charecter LEI Code)

Reporters Name Street and Malling Address

Arbor Bancorp Inc Legal Titie of Holding Company

125 South Fifth Ave (Mailing Address of the Holding Company) Street I PO Box

Ann Arbor Ml 48104 City State Zip Code

Physical Location W different from rnamng address)

Person to whom questions about this report should be directed Mark J Slade 1 st VP amp CFO Name

734-327-1136 Area Code I Phone Number I Extension

734-669-7160 Area Code I FAX Number

msladeboaacom E-mail Address

wwwbankofannarborcom

-Tiiie

Address (URL) for the Holding Companys web page

Does the reporter request confidental treatment for any portion of this submission

D Yes Please identify the report Items to which this request applJes

t8J No

D In accordance with the instructions on pages GEN-2 and 3 a letter justifying the request is being provided

O The information for which confidential treatment is sought is being submitted separately labeled Confidential

Pubnc reporting burden for this Information collecUon Is estimated to val) from 13 to 101 hours per response wilh an average of 525 hours per response Including time to gather and mainteln date In the required rorm and to review Instructions and complete the Information collection Send comments regarding lhls burden esllmate or any other aspect of this collection of lnfonnalion Including suggesllons for reducing this burden lo Secrelaiy Board of Governors of the Federal Reserve Syslom 2oth end C Streets NW Washing Ion DC 20551 and to the Office of Management and Budget Paperwork Reducllon Project (7100-0297) Washington DC 20503

1012014

Guess how many years in a row weve earned 1 ecord profits

Arbor Bancorp Inc

Dear fellow shareholders

2014 was another good year in many ways

It was a good year to be in Michigan Unemployment fell to 63 its lowest level in 12 years Since 2010 more

than 300000 jobs have been created in the private sector Auto sales have hit their highest mark since before

the Great Recession Michigans business climate is positive Our slate now ranks among the lop six in business

growth and is trending toward economic vitality

It was also a good year to be in Washtenaw County where unemployment declined to its lowest level in nearly a decade The local economy hos recovered he 16000 jobs lost in 2003middot2009 and on additional 15000

jobs are anticipated over the next three years Home values and income continue lo rise in most areas

Washtenaw County has one of the strongest economies in Michigan and the resurgence in automotive sales

increase in contruclion and the projected job creation ahould help the county grow in Lhe coming year

And ii wa1 a good year for Bank o Ann Arbor

Lets start with the numbers For the fifth consecutive year theyre gcod Very good

Our toted a11eta surpassed Sl billion a tremendous accomplishment and significxnt miestone in the banks

history Just five years ago our assets were $542 million The growth in 2014 was consistent with our average

annual growth or over $107 million per year With $1 billion in assets comes a new level of financial and

regulatory rcporlirg To meet these obligations weve added resources and ore confident that by worldrg

together our teom of the Worlds Best Bankers will satisfy all of the new requirements without missing a step

Deposits continued lo grow as more businesses

organizations and individuals chose the exceptional level of

customer service and value that all of our colleagues at Bank

of Ann Arbor provide each and every day In 2014 depo111

increaaed by 105 lo S936 million Were holding strong as

the second largest bofil in Ann Arbor according to the FDICs

most recent deposit market share reports As recently as 2010 we were the seventh largest Crains Detroit Business recent

article highlighted our morketmiddotshore growth Were pleased

yes but our goal is to be number one ln the market pure

CRAINS DETROIT BUSINESS

and simple

Un millions) Total deposits TotalaHots

How Btnk or Ann Arbor lakrs on lmnh - and thrivH l(gttll bJnk nue fmm No 6 in TWl lhaA In No 2 b)middot findlnjl nchu in nich-ii 1tr1 11 degllyNUWJJalrl1bull

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looS-VfflCit10W)O-cluJ

TOTAL DEPOSITS AND ASSETS

2014 2013 2012 2011 2010

$ 936 847 793 686 609

$1074 968 0s1 n4 689

- bull i[ bull middotCl

Also 1n 2014 our commercial lending team fundod over $205 million in new loan commltmenl1 Thats recordshy

level performance and more importantly a whole lot of money being injected Into our community to (und

business and job growth As usual all loans are scrutinized to meet our high credit standards Weve been

passionate about creclit quality since the bmk opened in 1996 ard weve never sacrificed quality to ahieve

loan growth Still our loan growth in 2014 of over 14 and credit quality metrics were remarkable by any

standard and ore a reflection of the exceptionally talented leadership and staff in both areas

CREDIT QUALITY METRICS

BOAA US Banks MlBanks

Net chcuge-oUa to total loan1 002 049 025

Lo11 allowance to noocurrent loan1 47473 7286 S7B6

Noncurrant loans to total loan1 034 211 3SS

Our morlgage ending learn has also been working hard to help people purchase and refinance homes in our

community generating nearly $100 million in new mortgages in 2014 The fact that we can originate process

and underwrite loan applications locally is a competitive advantage in the highly regulated mortgage Industry

Most consumers are un[amiliar with the ever-increasing underwriting demands required by the regulatory

community We make swe we explain the process every step of lhe way

The revenue generated by our Trust and Investment Group also reached record levels nearly $43 million

an increa1e of approximately 10 over the year prior This was driven by continued growth in assets under

administration whlch were conHdenl will exceed $1 billion in 2015 More and more compelitors are moving

their client service personnel further and further away from our community As other institutions trend towards

satellite offices relying heavily on telephonic and inlemet communications we continue to use old-fashioned

but highly personal face-to-face meetlngs

Our combined bank assets and assets under administration in our trust area exceeded $2 billion at year-end

In 2014 we completed an intensive eight-month brand evaluation of the now former Ervin Leasing Company

In July we unveiled a new name logo tagllne and marketing materials The new name Unifi Equipment

Finance is meaningful because our only reason for being is to become unified with our clients Were

extremely excited with the progress the UnlFI team has already made In growing the business By summer

lease originations had exceeded originations for all of 2013 By year end they exceeded the prior low years

combined The small-ticket equipment finance market provides us with a significant amount of granularity

since our leases are spread out over a large number of companies With excellent leadership and an energetic

and passionate team the future for UniFI Is bright

Our net income continues to hit new record levels growing by 20 over the previous year and setting a

record for the lUth conbullecutive year Earnings In 2014 were $116 million nearly $2 million more than the

previous year

GROWTH IN EARNINGS AND EARNINGS PER SHARE

2014 2013 2012 2011 20to

Earnlnga Un mllllons) $11637 9674 8449 6583 S097

Earnings per share $ 1317 to93 962 7SS S90

Book value per share $ 8564 7200 6619 5700 4784

To you our valued ahareholders we paid a 30 higher dividend than last year Weve grown the bank by $535 million over the past five years without having lo roise additional funds lo maintain our Hwcllltapitalizcd

status the FDICs highest possible designation By year-end shareholder equity was $76 million With earnings

at $1317 per share we continue to be one of the top performing banks in the country

Nationcd rank

RETURN ON EQUITY

2014 2013 2012 201 I 2010

96 7 9S6 946 938 906

But at Bank of Ann Arbor Ifs not just about the numbers Our top priority Is to help our community thrive

through our time eHorl and financial resources

Supporting organizations that make our community better has always been vitally important to us We ure

our financial resources lo support over 200 nonprofits and a number of our team members serve on boards

committees and as volunleers at many of these nonprofits

One particularly successful effort in 2014 was the United Way Pacesetter campaign for

which we had record-level employee contributions and participation In fact 32 of our

colleagues contributed to the campaign at a leadership level of greater than $1000

For the seventh year Bank of Ann Arbors Sonic Lunch summer concert aeriebull brought

thousands o people to downtown for ree music by top international national and local

performers Sonic Lunch hos also helped spuk significant interest in revitalizing Liberty

Plaza in downtown Ann Arbor as a community gathering place

We continue to grow our social media presence - most notably Facebook Twitter and

YouTube - to support our brand highlight ow strong commitment to the community and

reach new potential customers Independent Community Bankers of America the top

community bank trade association ranked Banko( Ann Arbor 4 in its Top SO Community

Bank Leaders in Social Media and cited our lreh content thought leadership our

advice and our consistent touch points to ow brand In addition ICBA included Bank o[ Ann Arbor President and CEO lim Marshall Technology Industry Group President

Michael Cole and Social Media and Event Coordinator Matthew Altruda among its Top

20 Community Bank Influencers an Twitter

Our tweets and Facebook posts on Columbus Day and in welcoming new Michigan

football coach Jim Harbaugh back to town attracled local and national media attention Ow

Michigan bank celebrates Columbus Day by trolling Ohio State

--middot=

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combined Facebook likes for Bank of Ann Arbor and Sonic Lunch me approaching 28000 and our Twitter

followers are over 90 In 2014 we creoied nearly 15 million impressions with folks who saw our messages

f Welcome back Jim-Bo

t

The expansion and complete renovation of our

40-year-old downtown Ann Arbor office began in

the latter part of 2014 Consequently our mortgage

private banking commercial and marketing

teams are working out of temporary ofHces in the

City Center Building across the street The first

phase of construction wi11 be completed be(ore

the end o[ summer followed by the remodeling

of the lobby and the floor above which houses

our Trust and Investment Management Group Were confident that the long-term result will justify the

temporary inconvenience

As we set our sights on achieving a sixth consecutive year of record-level performance in 2015 we have

several other challenges facing ua

Continued low interest rates will negatively impact our net interest margin which was 27 basis points less in

2014 than the prior year Jn response to the lower margin we grew the bank grew earning assets generated

higher levels of lee income held operating expense growth to 2 and posted a lower loan-loss provision Until

rates begin to increase we will continue to do more of the same

Our lndubulltry remains under significant regulatory pressure Like most other banks we added staff lo satisfy

the Increased level of new regulations The additions In our compliance area put us in a good position to

continue to grow the bank and sotisfy the expeclations of regulators We will remain ever-vigilant of any new

challenges in the compliance and regulatory areas

We face these and any other challenges though from a position of strength

For example our credit quality remains very strong significantly outperforming industry trends Our

monthly provision for loan loss should remain at historically low levels for 2015 We will continue to closely

manage our loan portfolio to maintain our credl quality metrics which compares favorably to the highest

performing banks across the country

The projected loan and equipment financel1ease growth trust Income growth and morlgage and loon fee

income should allow for sufficient increases in revenue to bcost earnings in 2015

Opera ling expense management hos also been and will continue to be a primary area of focus

Our goal remains Grow revenue and minimize expense growth With an efficiency ratio of 56 we need only

$056 in expenses to generate $1 in revenue Our ratio like so many other metrics compares very favorably to our peer group of banks at approximately 68 and to all Michigan banks at 76

We extend a sincere and heartfelt thank you lo everyone who helps Bank of Ann Arbor succeed on a

dayto-day basis our employees directors shareholders clients and the community We look forward to

overcoming the challenges we face-and enjoying our successes-together in 2015

Timolhy G Marshall William C Martin

President amp CEO Chairman of the Board

ASSETS

CONSOUDATED BALANCE SHEETS

DECEMBER 31 2014 AND 2013

Cash and due from financial lnsli1utions

Interest-bearing balances in banks

Cash and cash equivalenls

Securities available-for-sale

Loans held for sale

Loans excluding covered loans net

Covered loons

Total loons

Federal Home Loan Bank stock al cost

Premises and equipment net

Cash surrender value of life insurance

Other real estate owned FDIC indemnification asset

Accrued interest receivable and other assets

UABILITIES AND SHAREHOLDERS EQUITY

Deposits

Noninterest-bearing

Interest-bearing

Total deposits

Other lxgtrrowings

Federal Home Loan Bank advances

Repurchase agreements Accrued expense and other liabUilles

Subordlnated debentures

Total liabilities

Shareholders equity Common stoclc no par value 2000000 shares authorized 887584 and

876396 shares issued and outstanding al December 31 2014 and 2013

Retained earnings

Accumulated other comprehensive income(lossl

Total shareholders equity

All dollar amounts in lhousands except por shoro data Unaudltad

2014

14329

183491

197820

146458

2476

667540

16417

683957

2548 12770

14311

521

153

13405

$ 1074419

s 262306

673343

935649

439

892

44744

11531

5 155

998410

4613

69736 l660

76009

$ 1074419

2013

15174

148563

163737

155015

1355

584760

21413

606173

2634 12277

12686

1546

1978

10610

968011

242975

603657

846632

881

1053

42333

8843

5155

904897

4966

58976

(8281

63 114

9680ll

Interest income

Loons including fees

Securllies

Taxable

Tax exempt Federal funds sold and other

Interest expense Deposits

CONSOLIDATED STATEMENTS OF INCOME

YEARS ENDED DECEMBER 31 2014 AND 2013

Federal Home Loan Bonk advances

Subordnaed debentures

Other borrowings

Repurchase ogreemcmts

Net interest income

Provision for loan losses

Net interest income alter provision for loan lasses

Nanineresl income

Service charges on deposit accounts

Income from fiduciary acliviles

Net gains on sales of loans Net gains on sales of securllles

Gain (ass) on sales of OREO

Other

Noninteresl expense

Salaries and employee benefits

Occupancy and equipment

Marke ling and business promoUon

FDIC expense

Provision for loan repurchase loblllty Other

Income beore income taxes

Income tax emense

Ne income

Basic earnings per share

Dlluted earnings per shore

All dollaromounlll In lhausands excap per share data Unaudited

2014

33979

l431

2081 352

37843

l521

24 172

42 149

1908

35935

l 587

34348

425

4259

l404

14

363

2291

8756

17598

2869

l156

510

5056

27 189

15915

4278

l l637

1317

1275

2013

32327

l430

2230

265 36252

l633 28

174

77

104

2016

34236

2 495

31741

441

3891

1427

27

534

1581

7901

16861

2282

1170

504

750

5061

26628

13014

3340

9674

1093

1036

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

YEARS ENDED DECEMBER 31 2014 AND 2013

Net income

Other comprehensive income

Unrealized gainslosses on securities

Unrealized holding goln(loss) arising during the period Reclassification adjustment for losses (gains) included

In net Income

Tax effect

Net of tax

Comprehensive Income

All dollar amounts In thousands except per share data Unaudited

2014

11637

3782

(14) 0280)

2488

14125

2013

9674

5845)

27) l996

(3876)

5798

bullbull

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY

YEARS ENDED DECEMBER 31 2014 AND 2013

Balance January l 2013

Net income

Other comprehensive Income (loss)

Deferred shares plan

Exercise of stock options (29028 shares)

Repurchase ol 40816 shares of common sleek

Issuance of common stock

(400 shares)

Stock based compensation expense

Balance December 31 2013

Net Income

Other comprehensive Income (Joss)

Deferred shores plan

Exercise of stock options (56 176 shares)

Repurchase of 44988 shores of common stock

Stock based compensallon expense

Cash Dlvidand ($100 per shore)

Balance December 31 2014

Common Stock

6410

30

1022

(969)

28

445

4966

32

3118

(4039)

536

4613

All dolar amounts In thousands except per shore data Unaudited

Retained Earnings

$ 49302

9674

58976

11637

1877)

$ 69736

Accumulated Other

Compiehensive Income (Loss)

$ 3048

(3876)

(828)

2488

1660

Tola Shamholderf

Equity

$ 58760

9674

(3876)

30

1022

(2969)

28

445

63114

11637

2488

32

3118

(4039)

536

(877)

$ 76009

SUMMARY Of SIGNIFICANT ACCOUNTING POLICIES

Nahnn gl Oogralppbull qnd Prlndplu gl ConsoldgtgP The consoUdoted flnoncial statements Include Arbor Bancorp Inc and Ila wholly owned suhstdkuy Banko AnnAtbor (Bank) logether referred lo os lhe Cotporallon On fanuaty l 2013 the Corporotion through a newly established Bank substdlmy Banko Ann Arbor leasing (leoslng Company) acqutedall oI the slock of the Ervin leasing Company an Ann Atbor Michigan based leasing company which provides business equipment dl1eci fioanclng leases lo companos ocross Iha United Slalos lnlorcompany tronsacllons and baamcs aro olinunolod In consoldollon

As of July I 2014 Ervin Leasing Companyienamed and rebronded to Unifi Equipment Finance

The Bank provides financial services through Its oUicas In Washtenaw and Wayne counties Its prlmorydepostt products ore checkinQ savings and lcrm certillcate accounts and Its primary lending prolucts ate residential mortgage commefCiaL and Installment loans Substantially all loons ore secured by specillc Items of collateral Including business assets consumer assets and oomrrercial and resldentol real estate Commercial loons ore expected lo be repaid from cash low from opemttons of businesses Other financial instruments which polentiolly represent concentroUons 0pound credit risk include deposit o=unts in other financial lnsUluUons and odoml funds sold

Subuquinl EycntrThe Corporation hos evaluated subsequen events for 1ecognltlon and dlsdosu10 through februory JO 2015 which Is the dote the flnonciol statements were available to be Issued

U1c o Es ti mg trbull Th prcpom linonciol stolamons m conlormlty wilh accounting prlnclplas ganorally occcplod in I ho United Solos of Amedeo management makes eatlmoes and ossumplons hosed on avoloble Information These estimates and ossumptlons ofect Iha amounts reporled In the financial sotemenls and the dsdosutes provided and future results cculd dlller The ollowame or loon losses the reserve for repurchase of sold loons the carrying amount cl the FDIC Indemnillootlon Asset lease resduol values and the folr values cl ftnandal Instruments ore particularly subject to change

Cash and cash equlvalenls includes cash deposits with other llnonciol lnsUtuUons under 90duys sho1Menn Investments and federal funds sold Net cash flows are reporled lor CUstomer loon and deposit transactions federal funds purchased and repurchase og1ccmonts

lncrnslmiddotBcmlng Dcposlts In Banhbull nterast beating deposits In bonis mature wllhn one year and ore co riled al cost The balance outstanding at year end 2014 and 2013 was held al the Federol Reserve Bank

Debt socuntics oro closslliod os ovolloblo lor solo when hoy mighl bo sold bororn mofurlly Securiliesovoilablo for sale ore corrled at fair value with umeatlzed holding gains and losses reported In other comprehensive Income net o( Ox Interest Income includes amortlzatlon of purchase premium or discount Gains and losses on soles are based on the amortized cost o the socurlly sold

Interest Income ndudes omo1ttzallon of purchuse p1emum or discount Premiums and discounts on oocurlles ate omorllred on Um levelmiddotyield method wlhoul nnticlpotng prepayments axceptfa1 mortgage backed secu1llles whettt ptepaymenlll are antlclpaed Goins and losses on soles ore recorded on the trade dote and determined using the spellc denlillcotlon mehocl

Management evoluoles sacurltles for olher-thonmiddotemporory lmpalrmen (QTnl on at least a quarte1ly basis and more frequently when economic or market condUons wormnt such on evaluation For securlties In an unrealized loss posltlon monagemenl considers the exenl and duration of the unreolzad loss and the llnonclal condUan and neormiddotlerm prospects of lhe Issuer ondolso assesses whelher ll Inlands lo sell or II ls more lkely lhan not thal II wlll be required lo selL a security In on unrealized OS11 poslllon before recovery of Its amortized cost basis li either of the crllerla regarding Intent or requirement to sell is met the en Ute difference between amortized cost and fair value Is recognized as lmpannent through earnings for debt securities hot do not meal the olmemenloned ctl1eria lhe amount of Impairment is split Into two components as follows ll orn ieloted lo credit Joss which mu11t be 1ecognlzed In the lncome 11tatement and 2) olhermiddotlhonmiddotlemporory Impairment (0111) related lo other faclors which ls recognlmd In other comprehensive Income The credit loss ls defined as the d1flerence between the presenl value of the cash flows expected to btt collected and the amottlied cart ba11is For equity aecudtes thu en Ure amount ol mpolnmm ls 11lCOQnlzed through earnings

fcdpral Homo Ipgp Bgpk FHI HI Stock- Tho Bank is a mamhorol lhafHtB sflilom Mambors ara roqurod oowna ca1tnlnamount of stock based on the level of borrowings and other faclors and may Invest ln oddlionol amounts FHLB stock ls cotrled at cost dossifted os o restrlcied security and perloclcoly evaluated hr Impairment based on ulllmoe ecoveryof par value Both cash and stock dividends ore 1epotled 01 Income

LoaruHildJiuSttlc Loons orlglnoled and lnlended or sale Jn the secondary morhl are corrled al Iha lower of cos or poundair value In the aggregate os determined by outslondlng commlments from Investors Net unreolzed losses ii ony ore recorded as o valuation ollowanoe and charged lo earnings Loons are sold with servicing released Buyeni do not hove recourse against Iha CorporoHon for subsequent loon OSlell However incerton sluoUons the buyer con require the Corporotlon to rnputchose loons

Loww Loons liiat monagemen has the In I en and abllty lo hold for tha loreseuabla future or unUI maturity or poyul are 1epo11ed at the principal balonett outstanding net o pure ho premiums and discounts and on allowance for loon losses In1e1est Income is roporlarl on tho tnterosl method and lndudas omotllrotion c[ not daforrcd loon foos and costa ovor tho kxm totm lnlerost incomo

All dolloramounll In lhousonds except per shore do lo Unaudled

SUMMARY OF SIGNIFICANT ACCOUNTING POLICJES Continued)

on all loans Is generally dllconUnued al the Ume the loan Is 90 days delinquent unless the credit Is well-secuted and Jn process ofcallecUon In all cases loans ore placed on nonaccrualor charged-oil at an oorUer dole JI collection ol prtncpa] or lnleresl Is considered doubtful All Inlet est occrued but no received for loans placed on nonoccruol Is reversed against Interns Income Inleresl received on such Joans ls occounled for on lhe ooshmiddotbosls or cos recovery melhod unlll qualllylng for return lo accrual

Loons ore rel urned to 0ccruol salus when oll lhe p1lnctpal ond interest amounts conlracluollydue me brought current and [ulure payments ore reasonably assured

Cpyornd Ipgnsbull Loans acquired in 2010 In a Federal Deposit Insurance Corporation (FD)C)-asslsted transaction are oovered under a loss sharing agreembullmtandore refoned lo as middotcovered loansmiddot Pursuant lo lhti trms or thti loss shoring agreem1mts covtired loons are subacl lo a stated loss threshold whereby Iha FDIC will reimburse the Corporaton [or BO of IOSStls incuned The Corporation will 1eimbursa he FDIC for Its share of recoverlm with respect lo losses poundor which the FDIC paid the Corporalon a mlmbmoomont undor tho loss sharing og1oomont Tho FDICs obllgolon to rolmhurso tho Cotpotc1lion for ]()SS()S with raspcct lo covered loon begins with the first dollar of loss incurred

Coveted loons warn recorded at far value al the time of acquston Fair values for covered loons are hosed on a dscounted cash flow methodology lhotconsdered various actors Including the type of loonond related collalerol dossflcatlon status fixed or votiobla inleresl role tlm10I loan and whehtir or nol lhe loan was omorlirlng and o discoun ralti reltJClin11 the Corporolionmiddots osoossmont of risk inhomnl in tho cosh llow cslmoos Covorcd loons woro gruupod tcuolhcr according to smilor choroccrisUcs

ond were treated in the aggregate when opplylng various voluaon technlques

AIJlurchose certain covered loons had evidence of credlt deterioration since orlgnolion These loons ore accounted lor lndMdually The Corporation estimates lhe amount and timing of expected cash flows for each purchased loan and the expected cash flows in excess olomount pold Is recorded as Interest Income over the remaining life of he loon or pool (occretable yield) The excess of the loons or pools contractual principal and Interest over expected cash Hows Is not recorded (nonocc1etoble dllerence) Over the life ol the loon or pool expected cash flows continue lo be estimated II he present volue oI expected cash flows is less than the carrying amount o loss is recorded ff the presen volue of expected co sh Hows Is greater lhon the carrying amount It ls rocognlzed as port o future Interest Income

Dire cl Dnqnclng klse Rrcynhln11middot The results of the Corpotolons equipment loosing acUvUes are recorded within loons on the consolidaled balance shtiel niese direct lino11cing leases provide for lull recovery ol the equipmenl cost over lhe lenn al the lease

The CorporaHons nal Investment in direct Hnanclal leases lscomptlood of lhe lollowtng elements minimum lease payments receivable the esllmated unguaranleed residual value ol the leased equipment at the lease lermnalon dates and unamortized lntiol dlrect costs less unearned Income Estimated guaranteed residual values are revlewed perodicolly to determine [ the cunent ttsthnalc of the equipments fotr value appears to be below Us recorded estlmue If rred )esldual vululS urn adjusted down word lo reflect adjusted estimates of fair market values Upward adjustments lo residual values me nol permitted

Unoomod lncomo fa tho amount bywhlch ho mlnmum caoo paymonts rccclvnblo plus tho osUmotcd unguarantood rosdual valua exceeds the cost of the leased equlpmanlo the inception of lhe lease Uneomed Income ts amortized aver the Initial lease term lo p1oduce a constant rote ol teum on Iha net Investment In lhe lease lnllol direct costs ol ocqultlng a lease are coptallzed when incurred and amortkedover the Ille of the lease consistent with the method used lo recognize Interest Income

The Corporallon evoluotes lhe colectablllly o[ Is leose receivables hosed upon carloln foclors such as hsforlcol colteclon I rends and aging categories Leose receivables ore wrUen of against the allowance or loan losses when the receivable Is determined to be uncollectlbe

AllniulllllU The allovance or loan losses ls a valuaton ollowonce or probable Incurred credit losses Increased by the provislon lor loon losses and decreased by charge ols less rncovetlttS Munogemcnt estltnates the ulowonce bulome requited using past loon loss experience the nature and volume of the portfolio Information aboul specific borrower sluatlons and estimated collateral values economiccondltions and other factors Allocatons o the allowance may be made for specific loons bul ho onllro alowonco Ill ovoilobla or any loan hot Jn monogomonfs judgment should be charged off Loan losses aro charged against the allowance when management believes the uncollectlbllty of a loon balance Is confirmed

The allowance consists al specific and general components The specific oomponent relates lo loons hot ore Individually clossifed os lmpJlred or loans otherwise closslfledos substandard or doubtful The generalcomporenl covers rcgtn dassilled loons and Is based on hlslorleol loss experience odusled for current Iocors

A loon Is lmpored when full payment under he loon terms Is no expected Nonbullhomogeneous loan classes such as commercial and commercial real estate loons and homogeneous loan segments such as mortgage and consumer loons modified as troubled debt restructu1lngs or loons ossocloled with non-homogtineous relationships are lndivkluolly evolualed for lmpomamt 1pound a

loon Is Im poi red o portion of the ullowonce Is allocated so hot Iha loon Is tepo1led net at the p1eoont volue o estimated futurn cash flows using the loans exlstlnQ role orot the fair value ocolloterol ii repay men ls expected solely from the collo1eral Lorge

All dollar amounts In thousands except per shore do1o Unaudited

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

groups of smoler balance homogeneous loons such as consumer and residential real es tale loons are collectively evaluated for impalnoont and accorrlngly they are rot sepomtely identified for lmponnenl disclosures Loans for which the terms have been modiled resulting In o concession and for whch the borrower s experiencing flnorcial difficulties are considmed troubled debt resructurtngs and classified os Impaired

Factors consdurod by manogomonl In dolor mining lmpnlrmont lncluda payment status collatora value and tho prohohUty of collecting scheduled principal ond Interest payments when due Uxlns hat experience lnslgnllloont payment delays and payment shortolls generoly are not clossled as impaired Management determines the significance o payment delays and payment shortfalls on a case-by-case basis toking lnlo consideration all of the cl1cumstancas surrounding the loon and the borrower Including Iha length of the delay the reasons for the delay the borrowers prior payment record and the amount al the shottfoll In re lo lion to lhe prlnclpo ond lnleresl owed

Troubled debt restructurlngs me sepmotely Identified poundor lmpormen disclosures and ore measured at the preoon volue ol estmoed future cash flows using the loons effective rote at Inception lpound a troubled debt restructuring Is considered to be a collateral dependent loan the loon ls reported net o the oir value of the collateral For lroubleddebt restructurlngs that subsequently default thti Corporcton dete1mh1cs the amount a( reserve In occordancu wilh the accounting pollcy for the ollowonce for loon losses

Tho gonorril componontcovots non lmpahcd l=ns ond la hosed rm hsloricol loss oxporlanco adjuod for currant factors Tho hlstorlcol loss experience is de1ermlned by portfolio segment and Is hosed on the actual loss history experienced by the Co1po1alon over the most recent five years For all segments he actual loss experience Is supplemented wlthother economic facto is hosed on the risks present for each porIollo segment These economic foclots Include consideration of the folio wing levels of and trends In delinquances ond lmpored loons levels or and trends In charge-offs and recoveries trends ln volume and terms of loons effects ol any changes In risk selecon and underwrllng slondords olher changes in lending pollces proeedures ond praclkes eperienca oblty ond depth of lending managemonland other relevant staff national and loco economic trends and conditions industry conditions ond efects ol changes In credl ooncanrolions The following portfolio SPgments have been Identified

Comrnerdol - Loons to businesses hat Ole sole proprietorships partnerships limited liobllty companies and corporations These loons ore for commercial Industrial or p1ofessionul purposes The riskcharactctlstics of these loons vory based on the borrowersmiddot business and industry as repoyrent is typically dependent on cash flows gene ruled from the underlying business Within this loon segment the Corporation has identified loon classes of commercial and industrial commercial realestole and commerca kmd devolopmant

Real Estate - Loons to purchase or rellnance single omlly residences The risksassocated vi th this oogmenl ore generally dependent on the ovomU real estate volue environment and Individual payment oblgalons Real estate Is subject to changes In market valuation and can be unsloble fora variety of reasons Within this segment the Corporation hos idenUIJed classes of resldenllol ond home equly loons

Consumer-Term loans or lines olcredlt for the purchase ol consumer goods vehicles or home Improvement The risk characteristics of the loom1 In I his segment vary depending on the type of colateml but generally repayment Is expected from a customerconlnuinQ to generate o cash How I hot supports the calculoted poymentobllgaton Secondary support could involve llqudution o tOlulerol

Loosos-Dirtel Flnanca equipment loaoos Rislchamctoristcs vary hosed horn tho borrowers busnoss and lnduatty as tepaymenl Is typcallydependent upon cash Hows generated ram the bonowers operations Secondary support could Involve repossessing the lensed colloleral

FDIC lndomnjficu The FDIC lndemnlilcoUonosset results from the loss share aQreements In the FDCltzsslsted transocllon The ossel ls measured seporalely from Iha reloed covered osses as they are nol conlroctually embedded 1n lhe assets and ore no transferable wllh the asses should lhe Corpora Hon choose lo dispose of them and represenl the acqulslllon date fair value al expected reimbursements from the FDIC Puisuont lo the arms al the loss sharing ag1eemenl cove rad loons ore subject to a stated loss threshold whereby the FDIC will reimburse the Corporation for 80 of losses Incurred These expected reimbursements do not Include roimburroblo amounts related to future covered expendlures These oosh flows ore discounted to reflect a metric of uncertontyofthe Urning and receipt of the loss shoring reimbursement from the FDIC This asset decreases when losoos aie realized and clohns me submUled lo the FDIC or when customern repay their loons In full and expticOO l=cs do not occur This ossel also Increases when esllma1ed future lossea Increase and decreo6e3 when esttno1ed future losses dec1ease When ostlmotod futuro loon losses lncrcaoo ho Corpomton rccorrls a provision for loon lossos ond lncrcasos Its allowonco for loon lOS009 occordngly The resulting increase In the FDIC lndemnlfcollon ossel Is recorded os on offset to the provision for loon losses During 2Dl4 and 2013 lhe provision for loon losses was offset by S320and Sl266 teloed lo Increases In lhe FDIC lndemnIlcotion asset

All dollar amounts in thousands except per share data Unaudited

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Continued)

otbtH Reg y1qt1 Own ad OREOJmiddot Assets acquired through er IIllltead cf loan forocloouro ore inltlally recorded ot loir value less costs to mill whim ocqulredestabllshlngo llew cost lxms These assets are eubsequentlyoccounted for at lower cl cost or fair value )ass eitlmuled costs to sell 1pound fair value declines subsequent to lo1lltlosurn u valuation allowance is rncorded through expense Oparntna cosLI nfo1 ocqulslUonara expansed

OREO acquled by the Corporation lhtough loon defaults by customers oncove1ed loons or acquired by the Corpomllon as pail oI Its acquisition of New Uherty Banklsoo Note 2 Business Comblnotlonsl me covered under the loss shoring agreement discussed above Pursuant to the etms of the = shodng ag1aemen coveted assets ore subject lo a s lo led loss threshold whereby the FDIC will reimburse the Corporation or 60 of losses Incurred Any gains or losses realized at the time of disposal oro portlolly offset by tho FDIC toss shore and oro roloctcd In Income Al year-end 2JM ond 2013 SO omi$155 ol lha Gorporalions OREO wos subject lo the loss shoring agreement

qulpminl god 1ltauhold lmnroyemenlgbull Lond Is corrled at cosL Premises and equipment ore stoled ot cost less accumulated depreciation generally com puled on the straghtmiddotlne basis over the assets useful llves and over the terms of the lease or the esthnotm useful llves lor leasehold Improvements whichever is shortur

Qmb Surrnndqr Yaluo al J lfo Jnsumncebull ThoC01pornlon hos punhaood Hfohmurnnco pollclas on 001lain key oxccutivos Cash summdor voluo ol lfo Jnsuroncc Is 1ocordrnl ol lho amount thot can ba 1callzod under tho nsuronco controctot tho balonco sheet dole which Is the cash surrender value adjusted for other charges or other amounts due tho tore probable otseltlemenl

lampna-Term Assa1bull Premises and equpmen olher lnlongble assets and other long-term assets 01e rnvewed for Impairment when events indicate heir carrying amount may not be recoverable from future undisccunted cash flows If lmpolred the assets are recorded a fair value

Bepurchgee Agrccmgnj11bull SubsanlolyaI repurchase ng1eement UobiHUos represent amounts advanced by various customers These balances ore not deposits and ore no covered by Jederal deposit lnsuronce SecurUes ore pledged to cover theiie lablllles

Jrcrmfers gl Fingncgl AsGesbull Ifonsfers of financial osselsare accounted for as soles when control over the assets hos been rellnquisbed Control aver transferred ossels Is deerned lo be surrendered when the assets have been isolated from the Corpomlion tho tronsforco ahtolns tho dght U1no of conditions that constmln II Imm taling ad van logo of that right to pledge or cxchango tho tronsforrod assets end tho Corpo1otlon dOCll not maintain cifoctlvc control over tho hansfoncd assets hrough an agreement to repurchase them before their maturity

smck_Enenutllm Compensotlon cost is recognized for stock options and restricted stockawords issued lo employees bosed on the fair value o[ lhese awards at Iha dote 0pound gronL A BlackmiddotScboles model Is ullllzed fo eslmale the folr value cl sled opHons

GompensoUon cost ls recognized over the required service period generally defined as Iha vesting pedod For awards wllh graded veslng compensation cost is rncognlzad on o sralghlmiddotline bosls over the requisite service period for the en Ure award

lncomo TggeBbull Income twc expense fa the total of he current year income tax due or refundable and the chonge In deferwd tux 0sets andlobillties Ikfened toxossels and lobiUlei me he expected future ax amounts poundor the tempomry dUferences btitween cnnying amounts and tax hoses al ossots and lobilltles computed using onoctod lox mos A valuation allowanco IE ncodcd reduces delened tax assets to Iha amount expected o he realized

A tax position is recognized as a benefit only Ell ls more likely than not tho the tax position would be sustained In a lox exominolcn with o tax exomlnatlon beng presumed to occur The amount recognized is the largest amount of tax benellt tho Is grealer than 50 lilelyol being realized on exomnoUon For tax posllions no meellng he Mmore likely hon natM lest no lox benelll Is recorded

The Corpototon recognizes lnterestondor penalties related lo Income tax matters In Income tax expense

QfBglgpcemiddotShMI Ejpgpclgl Jostrumentw Financtol Instruments include off balance-sheet credit Instruments such us

commitments to make loons and stondby lettets cf credl Issued to meet customer Ilnomlng needs The face omoun for these items represents lhe exposure to loss before conslderlng customer collolerolcr oblllty lo repoy Such Iinoncol Instruments ore recorded whon they mo funded

Earnings Per Shattbull Bosc earnings per shorn ls net Income divided by lhe weighted overage number of common shores outslondlngdudng the pedod Diluted earnings per shore Include lhe dilutive effect cf oddltonol potential common shares tssuoble under equity hosed plans

All dollor amounts In thousands excepl per shore data Unaudited

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Conlinucdl

CQw1UUicnelyc Ineqmobull Comprehensive Income conslslll o[ net income and other comprehensivu Income Other comprehensive income ndudus unrealized gains and losses on suurlU avalablu or salu which ore also recognized as separate components ol equly

Lon Cantlngcociosbull Loss contingencies Including claims and Iago ocilons otlsng Jn the ordinary courso of husnass om rocordcd as llobllUes when the likelihood o loss is probable and on amount or long a cf loss con be reasonably estimated Management does not believe there now are such molters that will hove a material elfect on the fnonclol solements

Re1rclpps on Cruhl Cosh on hand or on deposit wllh he Federal Reserve Bonk cf Sl521 and $1312 was required to meal regulatory reserve end clearing requlrnmenls al year end 014 and 2013

fair Yalur cf Engncgl ipdltumenll Fair values o[ llnoncol Instruments ore estimated using relevant market lnFormoion and other assumptions as more fully disclosed In a sepuae note Fair value estimates Involve uncertain Iles orcl matters of sgnlllcont judgment regarding inerest rotes credit risk prepayments and other loctors especiolly ln he absence of brood rno1kets or particular Uems Changes In ossumptlons or In market conditions could sgnillcantly olecl the estimates

Diyjdnnd Bosricljanbull Banking toguotions require molnlainlngcolaln cnpla lovos and nay mil tho dvldonds paid by tho honk to tho holding company or by Iha hodina com pony ta rhmoholdnrs

Reclnsaificalionsbull Some Items In the prior year financial statements were reclassifed to conform lo he current presentation Reclassillcaons had no efec on prior year net Income or shareholdersmiddot equity

ampl9plion gl Nuw Aecgunlng Sgpdgrdsbull In Februory 20[3 lhe FASBomended exlsllng guidance reloled lo reporlng amounts rcclossUiOO out ol accumulated othorcomprohonsivo income Thoso amondmonts do not change tho current rcquiromons or reporting net Income or other comprehensive income In flnonclol statements These amendments require an entity lo provide lnformatlon about the amounts reclassified out of accumuloled olhercomprehenstve Income by componenL In addltlon on entty Is required to present eilher on the loce of the state men where net Income Is presented or In the notes signifconl amounts reclassified cul ol accumulated other comptebensve Income by the respective line Items of nel Income bu only j[ lhe amounl reclassified 1s required under US GAAP to be reclasslfied to ne Income In its entirety in the soma reporting pedod For other amounts that ore not requited under US GAAP to be redassfied In their entirety lo net Income on enlty Is required to crossmiddot mforonoo lo other dlsolosutcs roqutcd under US GAAP that provide addtonal dctals oboul thoso amounts These omondmcnts ore elfeclve prospectively for fiscal yeats and lntedm periods within those years beginning alter December 15 2013 Early adoption Is parmltled The elfecl ol adcptlng his sondard dd no hove a moterlal eleltt on the Corporatons opeioUng results or llnanclal condition

In Decombar 2013 lhu FASB omandcd ho Glossary of lhu Codilicotlon lo include a slnulu dollniton of o public buslnossantly for future uso in US GAAP Tho doFloUon ol a public business enlily will ho used in considodng tho scope of now finonciol gudonco and will identify whether lhe guidance does or does not apply to public business entitles The amendment does not allectexistlng lequ1ements and there Is no elfectlve date The adoption ol lhs sondo1d dld not hove a material effect on the CompanyS operotng rosuls or llnondol condition

lnJonuory2014 the FASB amended existing guidance lo dailfy when a creditor should be conside1ed lo hove tecelved phrJcal possession of rnsidonlol tool oatolo propaty collotomldng o crmsumcr mmtgogo loan such that tho loon should ho dcrccognlzod and tho 1001 estate rccognzcd Thcso amendments dorify that an in substance repossession or foreclosuro occurs end a creditor s considered to have received physcol possession of resldentol reol estate property coloterolldng a consumer morlgoge loon upon ether 11) the credlor oblonlng legal title to the residentlol 1eol estate properly upon completion of a foreclosure or (2) the borrower conveying oil lnlarest In the resldentol real eslae property lo tha credtor to sotsfy that loon through completion of a deed Jn lieu cf foreclosure or through o similar legal ogreemanl Addillonol disclosures ore required These amendmenls ore eHecllve for publc business enUles for annual perJods end Interim periods within those annual parcxls begtnnlngafler December 15 2014 Amendments In th ls stondord con be applied using a modified retrospecUva or prospective transition methcxI Early adoption ls permlted The adoption ol this standard ts not expected to hove a maedol effect on the Componys operating results or llnonciol condtlon

In Moy2014 the FASS amendOO existing guidance realOO la revenue from con1mcis with custame1s 111sumendment supersedes end replaces nearly all existing revenue recognition guidance Including lnduslrymiddotspeclflc gudonco establishes a new conltolshybosod ovonuo mccgnllon modal changos the basis for deciding whon rovonuo is rcccgnizod ovor limo er at a poln In Hrno provides new and more detailed guidance on speclflo epics and expmdsand Improves disclosures about 1evenue In oddllion his amendment specfes lhe accounting for some costs to obtain or fulfll a contract with a customer These omendmenls ore elfectlva for annual IeportJng periods beginning ofter December 15 2016 lncludng Interim periods within that reporting per Joel Early oppllcolonls net permitted The amendments should be applied retrospectively 1o all periods presented or retrospectively wllh lhe cumulaHve effect recognized ol lhe dole o[ lnllol oppllcotlon The Company Is currenlly evoluollng tho Im po cl of his new occaunUng standard on Iha consolidated financial solornonts

All dollar omounts In thousands except per shore data Unoudtted

Ervin Leasing Business Combination

On January l 2013 the Corporotonacquhed 100 of the outstanding common shares of Ervin Leosng Corporation In exchange for cash lo toling $4622 Under the erms of he acqulsltlon oll common shareholders rncelvtgtd cash equal ta tatul equity o Ervin Leoslng as of December31 2012 plus $600 Ervin Leosing Company results of operotlons ware Included In the Corpomlans rnsults bognnlng Janumy l 2013 As al July l 2014 Ervin Locmng Company ronamcd and rabmndod to Unifi Equlpmon Flnanco

The following able summarizes the consdetollon paid for Ervin Leosng Company ond Iha omounts ol lhe assets ocqulrnd and llobUias ossumad recognized al he ocqusUon dote

Consderalon Cabullh

For Value of Total Conslderollon Transferred

Recognized amounts of Identifiable assets acgulred and Uabllites assumed

Gosh and cash equivalents Direct llnoncng leases Noncompeta agreement Dlharossels

Tola assets a ired

Notes payoble Other labHUes

Totol lobllltcs assumed

Total idenlfloble net assets

4622 4622

366 11304

100 l098

12BSB

7514

732 8246

4622

No goodwill or olher lnlanglble ossels beyond lhe noncompale agreement above warn generoled as par of lhe Ervin Leosing business combinotlon

New Llbe1ty Business Combnaton

On May 14 2010 the Corporation enterecl into a purchaie nnd ossutnpton agreement (Naw Llbetty Agreement) with the Federal Deposit lnsuranco Corpomlion FDIC) as rncclvor purs1mnl to which tho Corpomton mqulrcd cctlan asts ondassumcd subslontaJy oll o[ the deposits and cetlan lobUtias of New Llbarty Bon(Naw Liberty) New Liberty ope roted one bonklngcanar In Plymouth Michigan

In connecton with the New Liberty ocquslon the Corporaton entered lnlo a loss shoring ograamenlwlth the FDIC that covers mos of New Llbarlys ossels hosed upon the sellers records Including single family resldental marlgoge loons commerciol rool es1ate and commercial and ndustriol loons and OREO (collectvely covered assets) The loss shoring agreements are subject lo certan servicing procedures as sped fled in agreements wllh the FDIC The loss shoring agreements opplicable to sngle family residential morigoge loons provide for FDIC loss sharing ond Corporation reimbursement to tho FDIC for ten years The Joss sharing agreemens oppllcoble to all other covered assets provide for FDIC loss shoring for llva years and Corporation ralmbursomonl of recove1les lo he FDIC far elght yeurs The eXpgtcted Jembursements under the loss sharing ug1eements were recorded us an lndemniUcoHonosset al an esHmated fair value of $15949 on the acqutsiliondote whch represented the present volue oI the oxpoctcd nelcnsh rohnbursomon rolalod lo tho lolS shoring ogmomonls

The CorpotoHon acquired cetlan olhar New Llbarty assets nolcova1ed by Iha loss shoring ogreemenl wlh Iha FDC includlng =sh and secutlles purchased ot lalrvolue At acqusUon lnogg1egole loons ocquled hod on unpaid principal balance oS9mand a lar volue o$69JXl9 and deposits assumed hod o bolo nee of $90l 17

Alldolloramounta In lhousands except par share dala Unaudled

ADDITIONAL INFORMATION

We hove Included ltnonciol inlormotion for Iha yaarendftd Decamber31 2014 Our full ftnancol statements Including noes wem audited by Crowe Horwath our independent publkaccountont ond Crowe Horwath goveon unquallfled oplnon The compeo audited flnondol stataments Including the oudUors opnlon and notes ore avoloble upon request

11 you would lile o copy of the audled financial stolemenls or If you have any quesUons concerning the annual meeting pease con la ct your bank pmsdonl TI mo thy G Marshall at 125 South Filth Avonuo PO Box 8009 Ann Arbor Michigan 4BID7

All dollar omounts In thousands except par share data Unaudited

Officers

Executive Management

Timothy G MarshoJI Presidentamp Chief Execulive Ofllcer

Charles E Crone fr Execullve Vice President amp Chief Revenue Officer

Pall H Jud11on ExecuUve Vice Presfdenl amp Chfef Opera Ung Officer

Lyle r Dahlberg First Vice President Trust amp Invesmenl Group Manarier

Cynlha Livesay Firs Vice Presidenl Credi Administration

Mark J Slade First Vice Presfdenl amp Chief Financial Ofllcer

Mortgage Retail amp Privatbull Banking Services

Patrlck A Tamblyn Senior Vice President Private Banking Manager

Klrsly E Haholan Vice Presldenl amp Mortgage De[Xlrlmenf Manager

Amnndo M Harl Vice Presden Administration amp Opemtfons

Kimberly A Clugston Vice President amp Senior Mortgage Loon Officer

Linda S Brewer Vice President amp Private Banking 0ffcer

Mary Hays Vice Presden Private Bonling Officer

Chmles W CracrcrH Vice President Befall Moitgage Soles Manager

Curl DEnt Vice President amp Morgaga Loan Officer

Christine G Hold Vice Presfdenl Cash Management

Krltlna L Moyer Vice Presden amp Plymoulh Branch Manager

Joan C Hendrlck1 Vice President amp Main Office Brandi Manager

Kevin M Kramer Vice Pzesidenl Pcivale Banking OWrer

Denise J Sialleld Vice Presden amp Marlgage Loon Officer

Dennis D Ticknor Esworh Ofnce Branch Manager amp Health Savings Account Specialist

David K Pote Ypsilanti OfJee Branch Manager

Shelley L Rankin Saline Office Branch Manager

foseph D Croigmile Motlgorc Loon OfJeer

Kevin C Salley Morgage Loan OfJeer

William E Smith fr Mortgage Loan OfJrer

Sondra L Bccver Deposit Operations Offirer

Stoey B fohnson Sr Relolionsl1ip Banking Ollicer

Kimberly K Snow Relalionship Banking amp Cash Management Oflfcer

FinanC9

Lha AMason Vice Presidenl amp Infernal Auditor

Jame$ A Miller Vice President amp Dfreclor Human Resources

Bmbcrro L Morrison VicePresiden

Bella MFemondez Assisan Vira President amp Accounting Oflicer

Trust amp Investment Monagemcnl

Thomas R Kalloword First Vice President amp Senior Trusl Olflror

Stephen J Seymour Senior Vice Presden amp Senior Investment Olflcer

Sonia S Perle Senior Vice Presidenl amp Investment 0[cer

Cothlcon L Savoie Senior Vice Prosldont amp nvestmenl Offrer

Margaret L Vogel Vice President amp Trusl OfJcer

Erin E Archambault Vice President Trust Operations

Eric P Helbm Vice Presidenl amp Director of Business Development

Deborah A Jones Vice President amp Business Developmen Officer

Jacqueline Jenkins Vira Presidenl Portfolio Manager amp Businoss Dovclopmcnl Ollcor

Mllzl J Talon Vice President amp Trust Offlrer

Diano S Winner Vice President amp Investment Officer

Sarah Dobson Campbell TrusOffcer

MarkA Sklfl lnveslmenl Oflicer

Commercial Lending

Walto r G Byes Presden Saline District

Michael L Michon President Plymouth Districl

Michael H Chotos President Ypsilanti Districl

Mlrhuel A Cole Group President Technology Industry Group

Sall sh B Jost Senior Vice President amp Senior Loon Officer

Hons W Maler Senior Vice President SpeclolY Banking

David A Guenther Vice President amp Sonier Loon Officer

Robert R Roiie Vice Prcsldenl amp Senior Loon Ofllcer

Mork D Bally Vice Presldenl amp Commercial LoonOfflrer

Jonathon P Bowdler Vico Prrsidcnl amp Commercial Real Estate Manager

Jomes J Plummer Vice President amp Cormnerciol Loon Olicer

Mork H Holtz VicePresidenl TechnoloQy Industry Group

Information System1

Jeffrey J Stanton Vice Presden I amp ChiefTechnalogyOficer

Marketing

Jonke M Ortbrlng Vice President amp Marketing Department Manager

Cwdil Administration

Dawn M Prescott Senior Vice President amp Managed Assets Offirer

Trina M VonNesl Vice Prellden amp Credi Manager

Stephania N Hnnigan Assistant Vire President Consumer Credll amp Compliance

Soro L Hoffman Assistant Vice President amp Small Business Lending Offirer

Pamela f Wetzel Credi Atlminislrolion Officer

Compliance

Susan E Wcrgnor Vice Presfden Compliance 01icer amp Compliance Department Manager

John E Fosler Vice Presden I BSA OFAC amp Security Olirer

Brion J Powers Asslstanl Vice Piesden BSA amp Security Special isl

Cynthia K Shacllor BSASecurity Admlnlstralve Oficer

Unifi Eq11ipmbullnl Finance

Raymond J Grimshaw President amp Chief Ixcculva Olliccr

Thomaii J Conzolmmm Secretary Treasurer amp Chief Financial Officer

Directors

Thomas P Bo1dere Ptesdenl Midtown Group Inc

Jan L Garfinkle founder amp Manarlng Director Arborelum Ventures

Isadore J King President amp Chief Executive Officer Synergy Partners LLC

Timolhy G Marshcrll President amp Chief Execulfve Olflcet Bank of Ann Arbor

Michael C Martin Vice Presidenl Firs MarUn Corporalon

William C Martin Chairman Athletic Director Emeritus University of Michigan

Erneel G Perich Presden Perich + Partnets Ltd

David R Sams Mcrnaging Partner 360 Advisors LLC

Joseph A Sos Owner Ses Moors Inc

Cynthia H Wilbanks Vice President for Government Relalons University of Micbfgan

Jelfrey S Williams Chairman amp Chief fxeculve Offfcer Tangent Medical Technologies NeuMoDx Molecular Tnc

Directors EmcritU6

Jomes WAndorson Jr President The Anderson Assodoles

Richard P Eldswick Foundfnrr Diteclor Arbor Partners

Jun Barney Newman Vice Presiden Ann Arbor Dlslrfcl Ubrary Bocrrd

Rlchord N Robb DDS Regan Emeritus Eastern Michigan University

Downtown Ann Arbor

125 South Fifth Avenue

Ann Arbor MI 48104 7346621600

Downtown Saline

1 79 East Michigan Avenue

Saline MI 48176 7344705001

Downtown Ypsilanti

7 West Michigan Avenue Ypsilanti MI 48197 7344859400

boa acom

Ellsworth Rd amp Airport Blvd

801 West Ellsworth Road Ann Arbor MI 48108 7346698900

Plymouth

1333 West Ann Arbor Road

Plymouth MI 48170 734455 1 5 1 1

Stadium Blvd amp Liberty St

2204 West Stadium Boulevard Ann Arbor MI 48103 734822 1 900

Traver Village Shopping Center

2601 Plymouth Road

Ann Arbor MI 48105 7346623800

EQUAl HOUSIMG LENDER

Dear fellow shareholders

2014 was another good year in many ways

It was a good year to be in Michigan Unemployment fell to 63 its lowest level in 12 years Since 2010 more

than 300000 jobs have been created in the private sector Auto sales have hit their highest mark since before

the Great Recession Michigans business climate is positive Our slate now ranks among the lop six in business

growth and is trending toward economic vitality

It was also a good year to be in Washtenaw County where unemployment declined to its lowest level in nearly a decade The local economy hos recovered he 16000 jobs lost in 2003middot2009 and on additional 15000

jobs are anticipated over the next three years Home values and income continue lo rise in most areas

Washtenaw County has one of the strongest economies in Michigan and the resurgence in automotive sales

increase in contruclion and the projected job creation ahould help the county grow in Lhe coming year

And ii wa1 a good year for Bank o Ann Arbor

Lets start with the numbers For the fifth consecutive year theyre gcod Very good

Our toted a11eta surpassed Sl billion a tremendous accomplishment and significxnt miestone in the banks

history Just five years ago our assets were $542 million The growth in 2014 was consistent with our average

annual growth or over $107 million per year With $1 billion in assets comes a new level of financial and

regulatory rcporlirg To meet these obligations weve added resources and ore confident that by worldrg

together our teom of the Worlds Best Bankers will satisfy all of the new requirements without missing a step

Deposits continued lo grow as more businesses

organizations and individuals chose the exceptional level of

customer service and value that all of our colleagues at Bank

of Ann Arbor provide each and every day In 2014 depo111

increaaed by 105 lo S936 million Were holding strong as

the second largest bofil in Ann Arbor according to the FDICs

most recent deposit market share reports As recently as 2010 we were the seventh largest Crains Detroit Business recent

article highlighted our morketmiddotshore growth Were pleased

yes but our goal is to be number one ln the market pure

CRAINS DETROIT BUSINESS

and simple

Un millions) Total deposits TotalaHots

How Btnk or Ann Arbor lakrs on lmnh - and thrivH l(gttll bJnk nue fmm No 6 in TWl lhaA In No 2 b)middot findlnjl nchu in nich-ii 1tr1 11 degllyNUWJJalrl1bull

n1in1ir11 middotnltJirrrtt T lrt ll1nk Iiii - hobulll lt1 n ItII h In lhbull thl bullnbullrku 11tLbull 111lllnd1nd lpJ1middot11hogtWt1lnnn1nf1l1t-1h11hly tDm1illbullTlMlilgtJtMhnbullbullbull1gttllhl1-1tMt

ii bull i1Wtmn1tnllw11nnl11or0ffshybulli-11i 1bull1uttjmiddotlu

looS-VfflCit10W)O-cluJ

TOTAL DEPOSITS AND ASSETS

2014 2013 2012 2011 2010

$ 936 847 793 686 609

$1074 968 0s1 n4 689

- bull i[ bull middotCl

Also 1n 2014 our commercial lending team fundod over $205 million in new loan commltmenl1 Thats recordshy

level performance and more importantly a whole lot of money being injected Into our community to (und

business and job growth As usual all loans are scrutinized to meet our high credit standards Weve been

passionate about creclit quality since the bmk opened in 1996 ard weve never sacrificed quality to ahieve

loan growth Still our loan growth in 2014 of over 14 and credit quality metrics were remarkable by any

standard and ore a reflection of the exceptionally talented leadership and staff in both areas

CREDIT QUALITY METRICS

BOAA US Banks MlBanks

Net chcuge-oUa to total loan1 002 049 025

Lo11 allowance to noocurrent loan1 47473 7286 S7B6

Noncurrant loans to total loan1 034 211 3SS

Our morlgage ending learn has also been working hard to help people purchase and refinance homes in our

community generating nearly $100 million in new mortgages in 2014 The fact that we can originate process

and underwrite loan applications locally is a competitive advantage in the highly regulated mortgage Industry

Most consumers are un[amiliar with the ever-increasing underwriting demands required by the regulatory

community We make swe we explain the process every step of lhe way

The revenue generated by our Trust and Investment Group also reached record levels nearly $43 million

an increa1e of approximately 10 over the year prior This was driven by continued growth in assets under

administration whlch were conHdenl will exceed $1 billion in 2015 More and more compelitors are moving

their client service personnel further and further away from our community As other institutions trend towards

satellite offices relying heavily on telephonic and inlemet communications we continue to use old-fashioned

but highly personal face-to-face meetlngs

Our combined bank assets and assets under administration in our trust area exceeded $2 billion at year-end

In 2014 we completed an intensive eight-month brand evaluation of the now former Ervin Leasing Company

In July we unveiled a new name logo tagllne and marketing materials The new name Unifi Equipment

Finance is meaningful because our only reason for being is to become unified with our clients Were

extremely excited with the progress the UnlFI team has already made In growing the business By summer

lease originations had exceeded originations for all of 2013 By year end they exceeded the prior low years

combined The small-ticket equipment finance market provides us with a significant amount of granularity

since our leases are spread out over a large number of companies With excellent leadership and an energetic

and passionate team the future for UniFI Is bright

Our net income continues to hit new record levels growing by 20 over the previous year and setting a

record for the lUth conbullecutive year Earnings In 2014 were $116 million nearly $2 million more than the

previous year

GROWTH IN EARNINGS AND EARNINGS PER SHARE

2014 2013 2012 2011 20to

Earnlnga Un mllllons) $11637 9674 8449 6583 S097

Earnings per share $ 1317 to93 962 7SS S90

Book value per share $ 8564 7200 6619 5700 4784

To you our valued ahareholders we paid a 30 higher dividend than last year Weve grown the bank by $535 million over the past five years without having lo roise additional funds lo maintain our Hwcllltapitalizcd

status the FDICs highest possible designation By year-end shareholder equity was $76 million With earnings

at $1317 per share we continue to be one of the top performing banks in the country

Nationcd rank

RETURN ON EQUITY

2014 2013 2012 201 I 2010

96 7 9S6 946 938 906

But at Bank of Ann Arbor Ifs not just about the numbers Our top priority Is to help our community thrive

through our time eHorl and financial resources

Supporting organizations that make our community better has always been vitally important to us We ure

our financial resources lo support over 200 nonprofits and a number of our team members serve on boards

committees and as volunleers at many of these nonprofits

One particularly successful effort in 2014 was the United Way Pacesetter campaign for

which we had record-level employee contributions and participation In fact 32 of our

colleagues contributed to the campaign at a leadership level of greater than $1000

For the seventh year Bank of Ann Arbors Sonic Lunch summer concert aeriebull brought

thousands o people to downtown for ree music by top international national and local

performers Sonic Lunch hos also helped spuk significant interest in revitalizing Liberty

Plaza in downtown Ann Arbor as a community gathering place

We continue to grow our social media presence - most notably Facebook Twitter and

YouTube - to support our brand highlight ow strong commitment to the community and

reach new potential customers Independent Community Bankers of America the top

community bank trade association ranked Banko( Ann Arbor 4 in its Top SO Community

Bank Leaders in Social Media and cited our lreh content thought leadership our

advice and our consistent touch points to ow brand In addition ICBA included Bank o[ Ann Arbor President and CEO lim Marshall Technology Industry Group President

Michael Cole and Social Media and Event Coordinator Matthew Altruda among its Top

20 Community Bank Influencers an Twitter

Our tweets and Facebook posts on Columbus Day and in welcoming new Michigan

football coach Jim Harbaugh back to town attracled local and national media attention Ow

Michigan bank celebrates Columbus Day by trolling Ohio State

--middot=

- middot-bull bullfdfIbullbull bullbullbullbulllo1 bullbull

_

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combined Facebook likes for Bank of Ann Arbor and Sonic Lunch me approaching 28000 and our Twitter

followers are over 90 In 2014 we creoied nearly 15 million impressions with folks who saw our messages

f Welcome back Jim-Bo

t

The expansion and complete renovation of our

40-year-old downtown Ann Arbor office began in

the latter part of 2014 Consequently our mortgage

private banking commercial and marketing

teams are working out of temporary ofHces in the

City Center Building across the street The first

phase of construction wi11 be completed be(ore

the end o[ summer followed by the remodeling

of the lobby and the floor above which houses

our Trust and Investment Management Group Were confident that the long-term result will justify the

temporary inconvenience

As we set our sights on achieving a sixth consecutive year of record-level performance in 2015 we have

several other challenges facing ua

Continued low interest rates will negatively impact our net interest margin which was 27 basis points less in

2014 than the prior year Jn response to the lower margin we grew the bank grew earning assets generated

higher levels of lee income held operating expense growth to 2 and posted a lower loan-loss provision Until

rates begin to increase we will continue to do more of the same

Our lndubulltry remains under significant regulatory pressure Like most other banks we added staff lo satisfy

the Increased level of new regulations The additions In our compliance area put us in a good position to

continue to grow the bank and sotisfy the expeclations of regulators We will remain ever-vigilant of any new

challenges in the compliance and regulatory areas

We face these and any other challenges though from a position of strength

For example our credit quality remains very strong significantly outperforming industry trends Our

monthly provision for loan loss should remain at historically low levels for 2015 We will continue to closely

manage our loan portfolio to maintain our credl quality metrics which compares favorably to the highest

performing banks across the country

The projected loan and equipment financel1ease growth trust Income growth and morlgage and loon fee

income should allow for sufficient increases in revenue to bcost earnings in 2015

Opera ling expense management hos also been and will continue to be a primary area of focus

Our goal remains Grow revenue and minimize expense growth With an efficiency ratio of 56 we need only

$056 in expenses to generate $1 in revenue Our ratio like so many other metrics compares very favorably to our peer group of banks at approximately 68 and to all Michigan banks at 76

We extend a sincere and heartfelt thank you lo everyone who helps Bank of Ann Arbor succeed on a

dayto-day basis our employees directors shareholders clients and the community We look forward to

overcoming the challenges we face-and enjoying our successes-together in 2015

Timolhy G Marshall William C Martin

President amp CEO Chairman of the Board

ASSETS

CONSOUDATED BALANCE SHEETS

DECEMBER 31 2014 AND 2013

Cash and due from financial lnsli1utions

Interest-bearing balances in banks

Cash and cash equivalenls

Securities available-for-sale

Loans held for sale

Loans excluding covered loans net

Covered loons

Total loons

Federal Home Loan Bank stock al cost

Premises and equipment net

Cash surrender value of life insurance

Other real estate owned FDIC indemnification asset

Accrued interest receivable and other assets

UABILITIES AND SHAREHOLDERS EQUITY

Deposits

Noninterest-bearing

Interest-bearing

Total deposits

Other lxgtrrowings

Federal Home Loan Bank advances

Repurchase agreements Accrued expense and other liabUilles

Subordlnated debentures

Total liabilities

Shareholders equity Common stoclc no par value 2000000 shares authorized 887584 and

876396 shares issued and outstanding al December 31 2014 and 2013

Retained earnings

Accumulated other comprehensive income(lossl

Total shareholders equity

All dollar amounts in lhousands except por shoro data Unaudltad

2014

14329

183491

197820

146458

2476

667540

16417

683957

2548 12770

14311

521

153

13405

$ 1074419

s 262306

673343

935649

439

892

44744

11531

5 155

998410

4613

69736 l660

76009

$ 1074419

2013

15174

148563

163737

155015

1355

584760

21413

606173

2634 12277

12686

1546

1978

10610

968011

242975

603657

846632

881

1053

42333

8843

5155

904897

4966

58976

(8281

63 114

9680ll

Interest income

Loons including fees

Securllies

Taxable

Tax exempt Federal funds sold and other

Interest expense Deposits

CONSOLIDATED STATEMENTS OF INCOME

YEARS ENDED DECEMBER 31 2014 AND 2013

Federal Home Loan Bonk advances

Subordnaed debentures

Other borrowings

Repurchase ogreemcmts

Net interest income

Provision for loan losses

Net interest income alter provision for loan lasses

Nanineresl income

Service charges on deposit accounts

Income from fiduciary acliviles

Net gains on sales of loans Net gains on sales of securllles

Gain (ass) on sales of OREO

Other

Noninteresl expense

Salaries and employee benefits

Occupancy and equipment

Marke ling and business promoUon

FDIC expense

Provision for loan repurchase loblllty Other

Income beore income taxes

Income tax emense

Ne income

Basic earnings per share

Dlluted earnings per shore

All dollaromounlll In lhausands excap per share data Unaudited

2014

33979

l431

2081 352

37843

l521

24 172

42 149

1908

35935

l 587

34348

425

4259

l404

14

363

2291

8756

17598

2869

l156

510

5056

27 189

15915

4278

l l637

1317

1275

2013

32327

l430

2230

265 36252

l633 28

174

77

104

2016

34236

2 495

31741

441

3891

1427

27

534

1581

7901

16861

2282

1170

504

750

5061

26628

13014

3340

9674

1093

1036

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

YEARS ENDED DECEMBER 31 2014 AND 2013

Net income

Other comprehensive income

Unrealized gainslosses on securities

Unrealized holding goln(loss) arising during the period Reclassification adjustment for losses (gains) included

In net Income

Tax effect

Net of tax

Comprehensive Income

All dollar amounts In thousands except per share data Unaudited

2014

11637

3782

(14) 0280)

2488

14125

2013

9674

5845)

27) l996

(3876)

5798

bullbull

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY

YEARS ENDED DECEMBER 31 2014 AND 2013

Balance January l 2013

Net income

Other comprehensive Income (loss)

Deferred shares plan

Exercise of stock options (29028 shares)

Repurchase ol 40816 shares of common sleek

Issuance of common stock

(400 shares)

Stock based compensation expense

Balance December 31 2013

Net Income

Other comprehensive Income (Joss)

Deferred shores plan

Exercise of stock options (56 176 shares)

Repurchase of 44988 shores of common stock

Stock based compensallon expense

Cash Dlvidand ($100 per shore)

Balance December 31 2014

Common Stock

6410

30

1022

(969)

28

445

4966

32

3118

(4039)

536

4613

All dolar amounts In thousands except per shore data Unaudited

Retained Earnings

$ 49302

9674

58976

11637

1877)

$ 69736

Accumulated Other

Compiehensive Income (Loss)

$ 3048

(3876)

(828)

2488

1660

Tola Shamholderf

Equity

$ 58760

9674

(3876)

30

1022

(2969)

28

445

63114

11637

2488

32

3118

(4039)

536

(877)

$ 76009

SUMMARY Of SIGNIFICANT ACCOUNTING POLICIES

Nahnn gl Oogralppbull qnd Prlndplu gl ConsoldgtgP The consoUdoted flnoncial statements Include Arbor Bancorp Inc and Ila wholly owned suhstdkuy Banko AnnAtbor (Bank) logether referred lo os lhe Cotporallon On fanuaty l 2013 the Corporotion through a newly established Bank substdlmy Banko Ann Arbor leasing (leoslng Company) acqutedall oI the slock of the Ervin leasing Company an Ann Atbor Michigan based leasing company which provides business equipment dl1eci fioanclng leases lo companos ocross Iha United Slalos lnlorcompany tronsacllons and baamcs aro olinunolod In consoldollon

As of July I 2014 Ervin Leasing Companyienamed and rebronded to Unifi Equipment Finance

The Bank provides financial services through Its oUicas In Washtenaw and Wayne counties Its prlmorydepostt products ore checkinQ savings and lcrm certillcate accounts and Its primary lending prolucts ate residential mortgage commefCiaL and Installment loans Substantially all loons ore secured by specillc Items of collateral Including business assets consumer assets and oomrrercial and resldentol real estate Commercial loons ore expected lo be repaid from cash low from opemttons of businesses Other financial instruments which polentiolly represent concentroUons 0pound credit risk include deposit o=unts in other financial lnsUluUons and odoml funds sold

Subuquinl EycntrThe Corporation hos evaluated subsequen events for 1ecognltlon and dlsdosu10 through februory JO 2015 which Is the dote the flnonciol statements were available to be Issued

U1c o Es ti mg trbull Th prcpom linonciol stolamons m conlormlty wilh accounting prlnclplas ganorally occcplod in I ho United Solos of Amedeo management makes eatlmoes and ossumplons hosed on avoloble Information These estimates and ossumptlons ofect Iha amounts reporled In the financial sotemenls and the dsdosutes provided and future results cculd dlller The ollowame or loon losses the reserve for repurchase of sold loons the carrying amount cl the FDIC Indemnillootlon Asset lease resduol values and the folr values cl ftnandal Instruments ore particularly subject to change

Cash and cash equlvalenls includes cash deposits with other llnonciol lnsUtuUons under 90duys sho1Menn Investments and federal funds sold Net cash flows are reporled lor CUstomer loon and deposit transactions federal funds purchased and repurchase og1ccmonts

lncrnslmiddotBcmlng Dcposlts In Banhbull nterast beating deposits In bonis mature wllhn one year and ore co riled al cost The balance outstanding at year end 2014 and 2013 was held al the Federol Reserve Bank

Debt socuntics oro closslliod os ovolloblo lor solo when hoy mighl bo sold bororn mofurlly Securiliesovoilablo for sale ore corrled at fair value with umeatlzed holding gains and losses reported In other comprehensive Income net o( Ox Interest Income includes amortlzatlon of purchase premium or discount Gains and losses on soles are based on the amortized cost o the socurlly sold

Interest Income ndudes omo1ttzallon of purchuse p1emum or discount Premiums and discounts on oocurlles ate omorllred on Um levelmiddotyield method wlhoul nnticlpotng prepayments axceptfa1 mortgage backed secu1llles whettt ptepaymenlll are antlclpaed Goins and losses on soles ore recorded on the trade dote and determined using the spellc denlillcotlon mehocl

Management evoluoles sacurltles for olher-thonmiddotemporory lmpalrmen (QTnl on at least a quarte1ly basis and more frequently when economic or market condUons wormnt such on evaluation For securlties In an unrealized loss posltlon monagemenl considers the exenl and duration of the unreolzad loss and the llnonclal condUan and neormiddotlerm prospects of lhe Issuer ondolso assesses whelher ll Inlands lo sell or II ls more lkely lhan not thal II wlll be required lo selL a security In on unrealized OS11 poslllon before recovery of Its amortized cost basis li either of the crllerla regarding Intent or requirement to sell is met the en Ute difference between amortized cost and fair value Is recognized as lmpannent through earnings for debt securities hot do not meal the olmemenloned ctl1eria lhe amount of Impairment is split Into two components as follows ll orn ieloted lo credit Joss which mu11t be 1ecognlzed In the lncome 11tatement and 2) olhermiddotlhonmiddotlemporory Impairment (0111) related lo other faclors which ls recognlmd In other comprehensive Income The credit loss ls defined as the d1flerence between the presenl value of the cash flows expected to btt collected and the amottlied cart ba11is For equity aecudtes thu en Ure amount ol mpolnmm ls 11lCOQnlzed through earnings

fcdpral Homo Ipgp Bgpk FHI HI Stock- Tho Bank is a mamhorol lhafHtB sflilom Mambors ara roqurod oowna ca1tnlnamount of stock based on the level of borrowings and other faclors and may Invest ln oddlionol amounts FHLB stock ls cotrled at cost dossifted os o restrlcied security and perloclcoly evaluated hr Impairment based on ulllmoe ecoveryof par value Both cash and stock dividends ore 1epotled 01 Income

LoaruHildJiuSttlc Loons orlglnoled and lnlended or sale Jn the secondary morhl are corrled al Iha lower of cos or poundair value In the aggregate os determined by outslondlng commlments from Investors Net unreolzed losses ii ony ore recorded as o valuation ollowanoe and charged lo earnings Loons are sold with servicing released Buyeni do not hove recourse against Iha CorporoHon for subsequent loon OSlell However incerton sluoUons the buyer con require the Corporotlon to rnputchose loons

Loww Loons liiat monagemen has the In I en and abllty lo hold for tha loreseuabla future or unUI maturity or poyul are 1epo11ed at the principal balonett outstanding net o pure ho premiums and discounts and on allowance for loon losses In1e1est Income is roporlarl on tho tnterosl method and lndudas omotllrotion c[ not daforrcd loon foos and costa ovor tho kxm totm lnlerost incomo

All dolloramounll In lhousonds except per shore do lo Unaudled

SUMMARY OF SIGNIFICANT ACCOUNTING POLICJES Continued)

on all loans Is generally dllconUnued al the Ume the loan Is 90 days delinquent unless the credit Is well-secuted and Jn process ofcallecUon In all cases loans ore placed on nonaccrualor charged-oil at an oorUer dole JI collection ol prtncpa] or lnleresl Is considered doubtful All Inlet est occrued but no received for loans placed on nonoccruol Is reversed against Interns Income Inleresl received on such Joans ls occounled for on lhe ooshmiddotbosls or cos recovery melhod unlll qualllylng for return lo accrual

Loons ore rel urned to 0ccruol salus when oll lhe p1lnctpal ond interest amounts conlracluollydue me brought current and [ulure payments ore reasonably assured

Cpyornd Ipgnsbull Loans acquired in 2010 In a Federal Deposit Insurance Corporation (FD)C)-asslsted transaction are oovered under a loss sharing agreembullmtandore refoned lo as middotcovered loansmiddot Pursuant lo lhti trms or thti loss shoring agreem1mts covtired loons are subacl lo a stated loss threshold whereby Iha FDIC will reimburse the Corporaton [or BO of IOSStls incuned The Corporation will 1eimbursa he FDIC for Its share of recoverlm with respect lo losses poundor which the FDIC paid the Corporalon a mlmbmoomont undor tho loss sharing og1oomont Tho FDICs obllgolon to rolmhurso tho Cotpotc1lion for ]()SS()S with raspcct lo covered loon begins with the first dollar of loss incurred

Coveted loons warn recorded at far value al the time of acquston Fair values for covered loons are hosed on a dscounted cash flow methodology lhotconsdered various actors Including the type of loonond related collalerol dossflcatlon status fixed or votiobla inleresl role tlm10I loan and whehtir or nol lhe loan was omorlirlng and o discoun ralti reltJClin11 the Corporolionmiddots osoossmont of risk inhomnl in tho cosh llow cslmoos Covorcd loons woro gruupod tcuolhcr according to smilor choroccrisUcs

ond were treated in the aggregate when opplylng various voluaon technlques

AIJlurchose certain covered loons had evidence of credlt deterioration since orlgnolion These loons ore accounted lor lndMdually The Corporation estimates lhe amount and timing of expected cash flows for each purchased loan and the expected cash flows in excess olomount pold Is recorded as Interest Income over the remaining life of he loon or pool (occretable yield) The excess of the loons or pools contractual principal and Interest over expected cash Hows Is not recorded (nonocc1etoble dllerence) Over the life ol the loon or pool expected cash flows continue lo be estimated II he present volue oI expected cash flows is less than the carrying amount o loss is recorded ff the presen volue of expected co sh Hows Is greater lhon the carrying amount It ls rocognlzed as port o future Interest Income

Dire cl Dnqnclng klse Rrcynhln11middot The results of the Corpotolons equipment loosing acUvUes are recorded within loons on the consolidaled balance shtiel niese direct lino11cing leases provide for lull recovery ol the equipmenl cost over lhe lenn al the lease

The CorporaHons nal Investment in direct Hnanclal leases lscomptlood of lhe lollowtng elements minimum lease payments receivable the esllmated unguaranleed residual value ol the leased equipment at the lease lermnalon dates and unamortized lntiol dlrect costs less unearned Income Estimated guaranteed residual values are revlewed perodicolly to determine [ the cunent ttsthnalc of the equipments fotr value appears to be below Us recorded estlmue If rred )esldual vululS urn adjusted down word lo reflect adjusted estimates of fair market values Upward adjustments lo residual values me nol permitted

Unoomod lncomo fa tho amount bywhlch ho mlnmum caoo paymonts rccclvnblo plus tho osUmotcd unguarantood rosdual valua exceeds the cost of the leased equlpmanlo the inception of lhe lease Uneomed Income ts amortized aver the Initial lease term lo p1oduce a constant rote ol teum on Iha net Investment In lhe lease lnllol direct costs ol ocqultlng a lease are coptallzed when incurred and amortkedover the Ille of the lease consistent with the method used lo recognize Interest Income

The Corporallon evoluotes lhe colectablllly o[ Is leose receivables hosed upon carloln foclors such as hsforlcol colteclon I rends and aging categories Leose receivables ore wrUen of against the allowance or loan losses when the receivable Is determined to be uncollectlbe

AllniulllllU The allovance or loan losses ls a valuaton ollowonce or probable Incurred credit losses Increased by the provislon lor loon losses and decreased by charge ols less rncovetlttS Munogemcnt estltnates the ulowonce bulome requited using past loon loss experience the nature and volume of the portfolio Information aboul specific borrower sluatlons and estimated collateral values economiccondltions and other factors Allocatons o the allowance may be made for specific loons bul ho onllro alowonco Ill ovoilobla or any loan hot Jn monogomonfs judgment should be charged off Loan losses aro charged against the allowance when management believes the uncollectlbllty of a loon balance Is confirmed

The allowance consists al specific and general components The specific oomponent relates lo loons hot ore Individually clossifed os lmpJlred or loans otherwise closslfledos substandard or doubtful The generalcomporenl covers rcgtn dassilled loons and Is based on hlslorleol loss experience odusled for current Iocors

A loon Is lmpored when full payment under he loon terms Is no expected Nonbullhomogeneous loan classes such as commercial and commercial real estate loons and homogeneous loan segments such as mortgage and consumer loons modified as troubled debt restructu1lngs or loons ossocloled with non-homogtineous relationships are lndivkluolly evolualed for lmpomamt 1pound a

loon Is Im poi red o portion of the ullowonce Is allocated so hot Iha loon Is tepo1led net at the p1eoont volue o estimated futurn cash flows using the loans exlstlnQ role orot the fair value ocolloterol ii repay men ls expected solely from the collo1eral Lorge

All dollar amounts In thousands except per shore do1o Unaudited

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

groups of smoler balance homogeneous loons such as consumer and residential real es tale loons are collectively evaluated for impalnoont and accorrlngly they are rot sepomtely identified for lmponnenl disclosures Loans for which the terms have been modiled resulting In o concession and for whch the borrower s experiencing flnorcial difficulties are considmed troubled debt resructurtngs and classified os Impaired

Factors consdurod by manogomonl In dolor mining lmpnlrmont lncluda payment status collatora value and tho prohohUty of collecting scheduled principal ond Interest payments when due Uxlns hat experience lnslgnllloont payment delays and payment shortolls generoly are not clossled as impaired Management determines the significance o payment delays and payment shortfalls on a case-by-case basis toking lnlo consideration all of the cl1cumstancas surrounding the loon and the borrower Including Iha length of the delay the reasons for the delay the borrowers prior payment record and the amount al the shottfoll In re lo lion to lhe prlnclpo ond lnleresl owed

Troubled debt restructurlngs me sepmotely Identified poundor lmpormen disclosures and ore measured at the preoon volue ol estmoed future cash flows using the loons effective rote at Inception lpound a troubled debt restructuring Is considered to be a collateral dependent loan the loon ls reported net o the oir value of the collateral For lroubleddebt restructurlngs that subsequently default thti Corporcton dete1mh1cs the amount a( reserve In occordancu wilh the accounting pollcy for the ollowonce for loon losses

Tho gonorril componontcovots non lmpahcd l=ns ond la hosed rm hsloricol loss oxporlanco adjuod for currant factors Tho hlstorlcol loss experience is de1ermlned by portfolio segment and Is hosed on the actual loss history experienced by the Co1po1alon over the most recent five years For all segments he actual loss experience Is supplemented wlthother economic facto is hosed on the risks present for each porIollo segment These economic foclots Include consideration of the folio wing levels of and trends In delinquances ond lmpored loons levels or and trends In charge-offs and recoveries trends ln volume and terms of loons effects ol any changes In risk selecon and underwrllng slondords olher changes in lending pollces proeedures ond praclkes eperienca oblty ond depth of lending managemonland other relevant staff national and loco economic trends and conditions industry conditions ond efects ol changes In credl ooncanrolions The following portfolio SPgments have been Identified

Comrnerdol - Loons to businesses hat Ole sole proprietorships partnerships limited liobllty companies and corporations These loons ore for commercial Industrial or p1ofessionul purposes The riskcharactctlstics of these loons vory based on the borrowersmiddot business and industry as repoyrent is typically dependent on cash flows gene ruled from the underlying business Within this loon segment the Corporation has identified loon classes of commercial and industrial commercial realestole and commerca kmd devolopmant

Real Estate - Loons to purchase or rellnance single omlly residences The risksassocated vi th this oogmenl ore generally dependent on the ovomU real estate volue environment and Individual payment oblgalons Real estate Is subject to changes In market valuation and can be unsloble fora variety of reasons Within this segment the Corporation hos idenUIJed classes of resldenllol ond home equly loons

Consumer-Term loans or lines olcredlt for the purchase ol consumer goods vehicles or home Improvement The risk characteristics of the loom1 In I his segment vary depending on the type of colateml but generally repayment Is expected from a customerconlnuinQ to generate o cash How I hot supports the calculoted poymentobllgaton Secondary support could involve llqudution o tOlulerol

Loosos-Dirtel Flnanca equipment loaoos Rislchamctoristcs vary hosed horn tho borrowers busnoss and lnduatty as tepaymenl Is typcallydependent upon cash Hows generated ram the bonowers operations Secondary support could Involve repossessing the lensed colloleral

FDIC lndomnjficu The FDIC lndemnlilcoUonosset results from the loss share aQreements In the FDCltzsslsted transocllon The ossel ls measured seporalely from Iha reloed covered osses as they are nol conlroctually embedded 1n lhe assets and ore no transferable wllh the asses should lhe Corpora Hon choose lo dispose of them and represenl the acqulslllon date fair value al expected reimbursements from the FDIC Puisuont lo the arms al the loss sharing ag1eemenl cove rad loons ore subject to a stated loss threshold whereby the FDIC will reimburse the Corporation for 80 of losses Incurred These expected reimbursements do not Include roimburroblo amounts related to future covered expendlures These oosh flows ore discounted to reflect a metric of uncertontyofthe Urning and receipt of the loss shoring reimbursement from the FDIC This asset decreases when losoos aie realized and clohns me submUled lo the FDIC or when customern repay their loons In full and expticOO l=cs do not occur This ossel also Increases when esllma1ed future lossea Increase and decreo6e3 when esttno1ed future losses dec1ease When ostlmotod futuro loon losses lncrcaoo ho Corpomton rccorrls a provision for loon lossos ond lncrcasos Its allowonco for loon lOS009 occordngly The resulting increase In the FDIC lndemnlfcollon ossel Is recorded os on offset to the provision for loon losses During 2Dl4 and 2013 lhe provision for loon losses was offset by S320and Sl266 teloed lo Increases In lhe FDIC lndemnIlcotion asset

All dollar amounts in thousands except per share data Unaudited

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Continued)

otbtH Reg y1qt1 Own ad OREOJmiddot Assets acquired through er IIllltead cf loan forocloouro ore inltlally recorded ot loir value less costs to mill whim ocqulredestabllshlngo llew cost lxms These assets are eubsequentlyoccounted for at lower cl cost or fair value )ass eitlmuled costs to sell 1pound fair value declines subsequent to lo1lltlosurn u valuation allowance is rncorded through expense Oparntna cosLI nfo1 ocqulslUonara expansed

OREO acquled by the Corporation lhtough loon defaults by customers oncove1ed loons or acquired by the Corpomllon as pail oI Its acquisition of New Uherty Banklsoo Note 2 Business Comblnotlonsl me covered under the loss shoring agreement discussed above Pursuant to the etms of the = shodng ag1aemen coveted assets ore subject lo a s lo led loss threshold whereby the FDIC will reimburse the Corporation or 60 of losses Incurred Any gains or losses realized at the time of disposal oro portlolly offset by tho FDIC toss shore and oro roloctcd In Income Al year-end 2JM ond 2013 SO omi$155 ol lha Gorporalions OREO wos subject lo the loss shoring agreement

qulpminl god 1ltauhold lmnroyemenlgbull Lond Is corrled at cosL Premises and equipment ore stoled ot cost less accumulated depreciation generally com puled on the straghtmiddotlne basis over the assets useful llves and over the terms of the lease or the esthnotm useful llves lor leasehold Improvements whichever is shortur

Qmb Surrnndqr Yaluo al J lfo Jnsumncebull ThoC01pornlon hos punhaood Hfohmurnnco pollclas on 001lain key oxccutivos Cash summdor voluo ol lfo Jnsuroncc Is 1ocordrnl ol lho amount thot can ba 1callzod under tho nsuronco controctot tho balonco sheet dole which Is the cash surrender value adjusted for other charges or other amounts due tho tore probable otseltlemenl

lampna-Term Assa1bull Premises and equpmen olher lnlongble assets and other long-term assets 01e rnvewed for Impairment when events indicate heir carrying amount may not be recoverable from future undisccunted cash flows If lmpolred the assets are recorded a fair value

Bepurchgee Agrccmgnj11bull SubsanlolyaI repurchase ng1eement UobiHUos represent amounts advanced by various customers These balances ore not deposits and ore no covered by Jederal deposit lnsuronce SecurUes ore pledged to cover theiie lablllles

Jrcrmfers gl Fingncgl AsGesbull Ifonsfers of financial osselsare accounted for as soles when control over the assets hos been rellnquisbed Control aver transferred ossels Is deerned lo be surrendered when the assets have been isolated from the Corpomlion tho tronsforco ahtolns tho dght U1no of conditions that constmln II Imm taling ad van logo of that right to pledge or cxchango tho tronsforrod assets end tho Corpo1otlon dOCll not maintain cifoctlvc control over tho hansfoncd assets hrough an agreement to repurchase them before their maturity

smck_Enenutllm Compensotlon cost is recognized for stock options and restricted stockawords issued lo employees bosed on the fair value o[ lhese awards at Iha dote 0pound gronL A BlackmiddotScboles model Is ullllzed fo eslmale the folr value cl sled opHons

GompensoUon cost ls recognized over the required service period generally defined as Iha vesting pedod For awards wllh graded veslng compensation cost is rncognlzad on o sralghlmiddotline bosls over the requisite service period for the en Ure award

lncomo TggeBbull Income twc expense fa the total of he current year income tax due or refundable and the chonge In deferwd tux 0sets andlobillties Ikfened toxossels and lobiUlei me he expected future ax amounts poundor the tempomry dUferences btitween cnnying amounts and tax hoses al ossots and lobilltles computed using onoctod lox mos A valuation allowanco IE ncodcd reduces delened tax assets to Iha amount expected o he realized

A tax position is recognized as a benefit only Ell ls more likely than not tho the tax position would be sustained In a lox exominolcn with o tax exomlnatlon beng presumed to occur The amount recognized is the largest amount of tax benellt tho Is grealer than 50 lilelyol being realized on exomnoUon For tax posllions no meellng he Mmore likely hon natM lest no lox benelll Is recorded

The Corpototon recognizes lnterestondor penalties related lo Income tax matters In Income tax expense

QfBglgpcemiddotShMI Ejpgpclgl Jostrumentw Financtol Instruments include off balance-sheet credit Instruments such us

commitments to make loons and stondby lettets cf credl Issued to meet customer Ilnomlng needs The face omoun for these items represents lhe exposure to loss before conslderlng customer collolerolcr oblllty lo repoy Such Iinoncol Instruments ore recorded whon they mo funded

Earnings Per Shattbull Bosc earnings per shorn ls net Income divided by lhe weighted overage number of common shores outslondlngdudng the pedod Diluted earnings per shore Include lhe dilutive effect cf oddltonol potential common shares tssuoble under equity hosed plans

All dollor amounts In thousands excepl per shore data Unaudited

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Conlinucdl

CQw1UUicnelyc Ineqmobull Comprehensive Income conslslll o[ net income and other comprehensivu Income Other comprehensive income ndudus unrealized gains and losses on suurlU avalablu or salu which ore also recognized as separate components ol equly

Lon Cantlngcociosbull Loss contingencies Including claims and Iago ocilons otlsng Jn the ordinary courso of husnass om rocordcd as llobllUes when the likelihood o loss is probable and on amount or long a cf loss con be reasonably estimated Management does not believe there now are such molters that will hove a material elfect on the fnonclol solements

Re1rclpps on Cruhl Cosh on hand or on deposit wllh he Federal Reserve Bonk cf Sl521 and $1312 was required to meal regulatory reserve end clearing requlrnmenls al year end 014 and 2013

fair Yalur cf Engncgl ipdltumenll Fair values o[ llnoncol Instruments ore estimated using relevant market lnFormoion and other assumptions as more fully disclosed In a sepuae note Fair value estimates Involve uncertain Iles orcl matters of sgnlllcont judgment regarding inerest rotes credit risk prepayments and other loctors especiolly ln he absence of brood rno1kets or particular Uems Changes In ossumptlons or In market conditions could sgnillcantly olecl the estimates

Diyjdnnd Bosricljanbull Banking toguotions require molnlainlngcolaln cnpla lovos and nay mil tho dvldonds paid by tho honk to tho holding company or by Iha hodina com pony ta rhmoholdnrs

Reclnsaificalionsbull Some Items In the prior year financial statements were reclassifed to conform lo he current presentation Reclassillcaons had no efec on prior year net Income or shareholdersmiddot equity

ampl9plion gl Nuw Aecgunlng Sgpdgrdsbull In Februory 20[3 lhe FASBomended exlsllng guidance reloled lo reporlng amounts rcclossUiOO out ol accumulated othorcomprohonsivo income Thoso amondmonts do not change tho current rcquiromons or reporting net Income or other comprehensive income In flnonclol statements These amendments require an entity lo provide lnformatlon about the amounts reclassified out of accumuloled olhercomprehenstve Income by componenL In addltlon on entty Is required to present eilher on the loce of the state men where net Income Is presented or In the notes signifconl amounts reclassified cul ol accumulated other comptebensve Income by the respective line Items of nel Income bu only j[ lhe amounl reclassified 1s required under US GAAP to be reclasslfied to ne Income In its entirety in the soma reporting pedod For other amounts that ore not requited under US GAAP to be redassfied In their entirety lo net Income on enlty Is required to crossmiddot mforonoo lo other dlsolosutcs roqutcd under US GAAP that provide addtonal dctals oboul thoso amounts These omondmcnts ore elfeclve prospectively for fiscal yeats and lntedm periods within those years beginning alter December 15 2013 Early adoption Is parmltled The elfecl ol adcptlng his sondard dd no hove a moterlal eleltt on the Corporatons opeioUng results or llnanclal condition

In Decombar 2013 lhu FASB omandcd ho Glossary of lhu Codilicotlon lo include a slnulu dollniton of o public buslnossantly for future uso in US GAAP Tho doFloUon ol a public business enlily will ho used in considodng tho scope of now finonciol gudonco and will identify whether lhe guidance does or does not apply to public business entitles The amendment does not allectexistlng lequ1ements and there Is no elfectlve date The adoption ol lhs sondo1d dld not hove a material effect on the CompanyS operotng rosuls or llnondol condition

lnJonuory2014 the FASB amended existing guidance lo dailfy when a creditor should be conside1ed lo hove tecelved phrJcal possession of rnsidonlol tool oatolo propaty collotomldng o crmsumcr mmtgogo loan such that tho loon should ho dcrccognlzod and tho 1001 estate rccognzcd Thcso amendments dorify that an in substance repossession or foreclosuro occurs end a creditor s considered to have received physcol possession of resldentol reol estate property coloterolldng a consumer morlgoge loon upon ether 11) the credlor oblonlng legal title to the residentlol 1eol estate properly upon completion of a foreclosure or (2) the borrower conveying oil lnlarest In the resldentol real eslae property lo tha credtor to sotsfy that loon through completion of a deed Jn lieu cf foreclosure or through o similar legal ogreemanl Addillonol disclosures ore required These amendmenls ore eHecllve for publc business enUles for annual perJods end Interim periods within those annual parcxls begtnnlngafler December 15 2014 Amendments In th ls stondord con be applied using a modified retrospecUva or prospective transition methcxI Early adoption ls permlted The adoption ol this standard ts not expected to hove a maedol effect on the Componys operating results or llnonciol condtlon

In Moy2014 the FASS amendOO existing guidance realOO la revenue from con1mcis with custame1s 111sumendment supersedes end replaces nearly all existing revenue recognition guidance Including lnduslrymiddotspeclflc gudonco establishes a new conltolshybosod ovonuo mccgnllon modal changos the basis for deciding whon rovonuo is rcccgnizod ovor limo er at a poln In Hrno provides new and more detailed guidance on speclflo epics and expmdsand Improves disclosures about 1evenue In oddllion his amendment specfes lhe accounting for some costs to obtain or fulfll a contract with a customer These omendmenls ore elfectlva for annual IeportJng periods beginning ofter December 15 2016 lncludng Interim periods within that reporting per Joel Early oppllcolonls net permitted The amendments should be applied retrospectively 1o all periods presented or retrospectively wllh lhe cumulaHve effect recognized ol lhe dole o[ lnllol oppllcotlon The Company Is currenlly evoluollng tho Im po cl of his new occaunUng standard on Iha consolidated financial solornonts

All dollar omounts In thousands except per shore data Unoudtted

Ervin Leasing Business Combination

On January l 2013 the Corporotonacquhed 100 of the outstanding common shares of Ervin Leosng Corporation In exchange for cash lo toling $4622 Under the erms of he acqulsltlon oll common shareholders rncelvtgtd cash equal ta tatul equity o Ervin Leoslng as of December31 2012 plus $600 Ervin Leosing Company results of operotlons ware Included In the Corpomlans rnsults bognnlng Janumy l 2013 As al July l 2014 Ervin Locmng Company ronamcd and rabmndod to Unifi Equlpmon Flnanco

The following able summarizes the consdetollon paid for Ervin Leosng Company ond Iha omounts ol lhe assets ocqulrnd and llobUias ossumad recognized al he ocqusUon dote

Consderalon Cabullh

For Value of Total Conslderollon Transferred

Recognized amounts of Identifiable assets acgulred and Uabllites assumed

Gosh and cash equivalents Direct llnoncng leases Noncompeta agreement Dlharossels

Tola assets a ired

Notes payoble Other labHUes

Totol lobllltcs assumed

Total idenlfloble net assets

4622 4622

366 11304

100 l098

12BSB

7514

732 8246

4622

No goodwill or olher lnlanglble ossels beyond lhe noncompale agreement above warn generoled as par of lhe Ervin Leosing business combinotlon

New Llbe1ty Business Combnaton

On May 14 2010 the Corporation enterecl into a purchaie nnd ossutnpton agreement (Naw Llbetty Agreement) with the Federal Deposit lnsuranco Corpomlion FDIC) as rncclvor purs1mnl to which tho Corpomton mqulrcd cctlan asts ondassumcd subslontaJy oll o[ the deposits and cetlan lobUtias of New Llbarty Bon(Naw Liberty) New Liberty ope roted one bonklngcanar In Plymouth Michigan

In connecton with the New Liberty ocquslon the Corporaton entered lnlo a loss shoring ograamenlwlth the FDIC that covers mos of New Llbarlys ossels hosed upon the sellers records Including single family resldental marlgoge loons commerciol rool es1ate and commercial and ndustriol loons and OREO (collectvely covered assets) The loss shoring agreements are subject lo certan servicing procedures as sped fled in agreements wllh the FDIC The loss shoring agreements opplicable to sngle family residential morigoge loons provide for FDIC loss sharing ond Corporation reimbursement to tho FDIC for ten years The Joss sharing agreemens oppllcoble to all other covered assets provide for FDIC loss shoring for llva years and Corporation ralmbursomonl of recove1les lo he FDIC far elght yeurs The eXpgtcted Jembursements under the loss sharing ug1eements were recorded us an lndemniUcoHonosset al an esHmated fair value of $15949 on the acqutsiliondote whch represented the present volue oI the oxpoctcd nelcnsh rohnbursomon rolalod lo tho lolS shoring ogmomonls

The CorpotoHon acquired cetlan olhar New Llbarty assets nolcova1ed by Iha loss shoring ogreemenl wlh Iha FDC includlng =sh and secutlles purchased ot lalrvolue At acqusUon lnogg1egole loons ocquled hod on unpaid principal balance oS9mand a lar volue o$69JXl9 and deposits assumed hod o bolo nee of $90l 17

Alldolloramounta In lhousands except par share dala Unaudled

ADDITIONAL INFORMATION

We hove Included ltnonciol inlormotion for Iha yaarendftd Decamber31 2014 Our full ftnancol statements Including noes wem audited by Crowe Horwath our independent publkaccountont ond Crowe Horwath goveon unquallfled oplnon The compeo audited flnondol stataments Including the oudUors opnlon and notes ore avoloble upon request

11 you would lile o copy of the audled financial stolemenls or If you have any quesUons concerning the annual meeting pease con la ct your bank pmsdonl TI mo thy G Marshall at 125 South Filth Avonuo PO Box 8009 Ann Arbor Michigan 4BID7

All dollar omounts In thousands except par share data Unaudited

Officers

Executive Management

Timothy G MarshoJI Presidentamp Chief Execulive Ofllcer

Charles E Crone fr Execullve Vice President amp Chief Revenue Officer

Pall H Jud11on ExecuUve Vice Presfdenl amp Chfef Opera Ung Officer

Lyle r Dahlberg First Vice President Trust amp Invesmenl Group Manarier

Cynlha Livesay Firs Vice Presidenl Credi Administration

Mark J Slade First Vice Presfdenl amp Chief Financial Ofllcer

Mortgage Retail amp Privatbull Banking Services

Patrlck A Tamblyn Senior Vice President Private Banking Manager

Klrsly E Haholan Vice Presldenl amp Mortgage De[Xlrlmenf Manager

Amnndo M Harl Vice Presden Administration amp Opemtfons

Kimberly A Clugston Vice President amp Senior Mortgage Loon Officer

Linda S Brewer Vice President amp Private Banking 0ffcer

Mary Hays Vice Presden Private Bonling Officer

Chmles W CracrcrH Vice President Befall Moitgage Soles Manager

Curl DEnt Vice President amp Morgaga Loan Officer

Christine G Hold Vice Presfdenl Cash Management

Krltlna L Moyer Vice Presden amp Plymoulh Branch Manager

Joan C Hendrlck1 Vice President amp Main Office Brandi Manager

Kevin M Kramer Vice Pzesidenl Pcivale Banking OWrer

Denise J Sialleld Vice Presden amp Marlgage Loon Officer

Dennis D Ticknor Esworh Ofnce Branch Manager amp Health Savings Account Specialist

David K Pote Ypsilanti OfJee Branch Manager

Shelley L Rankin Saline Office Branch Manager

foseph D Croigmile Motlgorc Loon OfJeer

Kevin C Salley Morgage Loan OfJeer

William E Smith fr Mortgage Loan OfJrer

Sondra L Bccver Deposit Operations Offirer

Stoey B fohnson Sr Relolionsl1ip Banking Ollicer

Kimberly K Snow Relalionship Banking amp Cash Management Oflfcer

FinanC9

Lha AMason Vice Presidenl amp Infernal Auditor

Jame$ A Miller Vice President amp Dfreclor Human Resources

Bmbcrro L Morrison VicePresiden

Bella MFemondez Assisan Vira President amp Accounting Oflicer

Trust amp Investment Monagemcnl

Thomas R Kalloword First Vice President amp Senior Trusl Olflror

Stephen J Seymour Senior Vice Presden amp Senior Investment Olflcer

Sonia S Perle Senior Vice Presidenl amp Investment 0[cer

Cothlcon L Savoie Senior Vice Prosldont amp nvestmenl Offrer

Margaret L Vogel Vice President amp Trusl OfJcer

Erin E Archambault Vice President Trust Operations

Eric P Helbm Vice Presidenl amp Director of Business Development

Deborah A Jones Vice President amp Business Developmen Officer

Jacqueline Jenkins Vira Presidenl Portfolio Manager amp Businoss Dovclopmcnl Ollcor

Mllzl J Talon Vice President amp Trust Offlrer

Diano S Winner Vice President amp Investment Officer

Sarah Dobson Campbell TrusOffcer

MarkA Sklfl lnveslmenl Oflicer

Commercial Lending

Walto r G Byes Presden Saline District

Michael L Michon President Plymouth Districl

Michael H Chotos President Ypsilanti Districl

Mlrhuel A Cole Group President Technology Industry Group

Sall sh B Jost Senior Vice President amp Senior Loon Officer

Hons W Maler Senior Vice President SpeclolY Banking

David A Guenther Vice President amp Sonier Loon Officer

Robert R Roiie Vice Prcsldenl amp Senior Loon Ofllcer

Mork D Bally Vice Presldenl amp Commercial LoonOfflrer

Jonathon P Bowdler Vico Prrsidcnl amp Commercial Real Estate Manager

Jomes J Plummer Vice President amp Cormnerciol Loon Olicer

Mork H Holtz VicePresidenl TechnoloQy Industry Group

Information System1

Jeffrey J Stanton Vice Presden I amp ChiefTechnalogyOficer

Marketing

Jonke M Ortbrlng Vice President amp Marketing Department Manager

Cwdil Administration

Dawn M Prescott Senior Vice President amp Managed Assets Offirer

Trina M VonNesl Vice Prellden amp Credi Manager

Stephania N Hnnigan Assistant Vire President Consumer Credll amp Compliance

Soro L Hoffman Assistant Vice President amp Small Business Lending Offirer

Pamela f Wetzel Credi Atlminislrolion Officer

Compliance

Susan E Wcrgnor Vice Presfden Compliance 01icer amp Compliance Department Manager

John E Fosler Vice Presden I BSA OFAC amp Security Olirer

Brion J Powers Asslstanl Vice Piesden BSA amp Security Special isl

Cynthia K Shacllor BSASecurity Admlnlstralve Oficer

Unifi Eq11ipmbullnl Finance

Raymond J Grimshaw President amp Chief Ixcculva Olliccr

Thomaii J Conzolmmm Secretary Treasurer amp Chief Financial Officer

Directors

Thomas P Bo1dere Ptesdenl Midtown Group Inc

Jan L Garfinkle founder amp Manarlng Director Arborelum Ventures

Isadore J King President amp Chief Executive Officer Synergy Partners LLC

Timolhy G Marshcrll President amp Chief Execulfve Olflcet Bank of Ann Arbor

Michael C Martin Vice Presidenl Firs MarUn Corporalon

William C Martin Chairman Athletic Director Emeritus University of Michigan

Erneel G Perich Presden Perich + Partnets Ltd

David R Sams Mcrnaging Partner 360 Advisors LLC

Joseph A Sos Owner Ses Moors Inc

Cynthia H Wilbanks Vice President for Government Relalons University of Micbfgan

Jelfrey S Williams Chairman amp Chief fxeculve Offfcer Tangent Medical Technologies NeuMoDx Molecular Tnc

Directors EmcritU6

Jomes WAndorson Jr President The Anderson Assodoles

Richard P Eldswick Foundfnrr Diteclor Arbor Partners

Jun Barney Newman Vice Presiden Ann Arbor Dlslrfcl Ubrary Bocrrd

Rlchord N Robb DDS Regan Emeritus Eastern Michigan University

Downtown Ann Arbor

125 South Fifth Avenue

Ann Arbor MI 48104 7346621600

Downtown Saline

1 79 East Michigan Avenue

Saline MI 48176 7344705001

Downtown Ypsilanti

7 West Michigan Avenue Ypsilanti MI 48197 7344859400

boa acom

Ellsworth Rd amp Airport Blvd

801 West Ellsworth Road Ann Arbor MI 48108 7346698900

Plymouth

1333 West Ann Arbor Road

Plymouth MI 48170 734455 1 5 1 1

Stadium Blvd amp Liberty St

2204 West Stadium Boulevard Ann Arbor MI 48103 734822 1 900

Traver Village Shopping Center

2601 Plymouth Road

Ann Arbor MI 48105 7346623800

EQUAl HOUSIMG LENDER

CREDIT QUALITY METRICS

BOAA US Banks MlBanks

Net chcuge-oUa to total loan1 002 049 025

Lo11 allowance to noocurrent loan1 47473 7286 S7B6

Noncurrant loans to total loan1 034 211 3SS

Our morlgage ending learn has also been working hard to help people purchase and refinance homes in our

community generating nearly $100 million in new mortgages in 2014 The fact that we can originate process

and underwrite loan applications locally is a competitive advantage in the highly regulated mortgage Industry

Most consumers are un[amiliar with the ever-increasing underwriting demands required by the regulatory

community We make swe we explain the process every step of lhe way

The revenue generated by our Trust and Investment Group also reached record levels nearly $43 million

an increa1e of approximately 10 over the year prior This was driven by continued growth in assets under

administration whlch were conHdenl will exceed $1 billion in 2015 More and more compelitors are moving

their client service personnel further and further away from our community As other institutions trend towards

satellite offices relying heavily on telephonic and inlemet communications we continue to use old-fashioned

but highly personal face-to-face meetlngs

Our combined bank assets and assets under administration in our trust area exceeded $2 billion at year-end

In 2014 we completed an intensive eight-month brand evaluation of the now former Ervin Leasing Company

In July we unveiled a new name logo tagllne and marketing materials The new name Unifi Equipment

Finance is meaningful because our only reason for being is to become unified with our clients Were

extremely excited with the progress the UnlFI team has already made In growing the business By summer

lease originations had exceeded originations for all of 2013 By year end they exceeded the prior low years

combined The small-ticket equipment finance market provides us with a significant amount of granularity

since our leases are spread out over a large number of companies With excellent leadership and an energetic

and passionate team the future for UniFI Is bright

Our net income continues to hit new record levels growing by 20 over the previous year and setting a

record for the lUth conbullecutive year Earnings In 2014 were $116 million nearly $2 million more than the

previous year

GROWTH IN EARNINGS AND EARNINGS PER SHARE

2014 2013 2012 2011 20to

Earnlnga Un mllllons) $11637 9674 8449 6583 S097

Earnings per share $ 1317 to93 962 7SS S90

Book value per share $ 8564 7200 6619 5700 4784

To you our valued ahareholders we paid a 30 higher dividend than last year Weve grown the bank by $535 million over the past five years without having lo roise additional funds lo maintain our Hwcllltapitalizcd

status the FDICs highest possible designation By year-end shareholder equity was $76 million With earnings

at $1317 per share we continue to be one of the top performing banks in the country

Nationcd rank

RETURN ON EQUITY

2014 2013 2012 201 I 2010

96 7 9S6 946 938 906

But at Bank of Ann Arbor Ifs not just about the numbers Our top priority Is to help our community thrive

through our time eHorl and financial resources

Supporting organizations that make our community better has always been vitally important to us We ure

our financial resources lo support over 200 nonprofits and a number of our team members serve on boards

committees and as volunleers at many of these nonprofits

One particularly successful effort in 2014 was the United Way Pacesetter campaign for

which we had record-level employee contributions and participation In fact 32 of our

colleagues contributed to the campaign at a leadership level of greater than $1000

For the seventh year Bank of Ann Arbors Sonic Lunch summer concert aeriebull brought

thousands o people to downtown for ree music by top international national and local

performers Sonic Lunch hos also helped spuk significant interest in revitalizing Liberty

Plaza in downtown Ann Arbor as a community gathering place

We continue to grow our social media presence - most notably Facebook Twitter and

YouTube - to support our brand highlight ow strong commitment to the community and

reach new potential customers Independent Community Bankers of America the top

community bank trade association ranked Banko( Ann Arbor 4 in its Top SO Community

Bank Leaders in Social Media and cited our lreh content thought leadership our

advice and our consistent touch points to ow brand In addition ICBA included Bank o[ Ann Arbor President and CEO lim Marshall Technology Industry Group President

Michael Cole and Social Media and Event Coordinator Matthew Altruda among its Top

20 Community Bank Influencers an Twitter

Our tweets and Facebook posts on Columbus Day and in welcoming new Michigan

football coach Jim Harbaugh back to town attracled local and national media attention Ow

Michigan bank celebrates Columbus Day by trolling Ohio State

--middot=

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combined Facebook likes for Bank of Ann Arbor and Sonic Lunch me approaching 28000 and our Twitter

followers are over 90 In 2014 we creoied nearly 15 million impressions with folks who saw our messages

f Welcome back Jim-Bo

t

The expansion and complete renovation of our

40-year-old downtown Ann Arbor office began in

the latter part of 2014 Consequently our mortgage

private banking commercial and marketing

teams are working out of temporary ofHces in the

City Center Building across the street The first

phase of construction wi11 be completed be(ore

the end o[ summer followed by the remodeling

of the lobby and the floor above which houses

our Trust and Investment Management Group Were confident that the long-term result will justify the

temporary inconvenience

As we set our sights on achieving a sixth consecutive year of record-level performance in 2015 we have

several other challenges facing ua

Continued low interest rates will negatively impact our net interest margin which was 27 basis points less in

2014 than the prior year Jn response to the lower margin we grew the bank grew earning assets generated

higher levels of lee income held operating expense growth to 2 and posted a lower loan-loss provision Until

rates begin to increase we will continue to do more of the same

Our lndubulltry remains under significant regulatory pressure Like most other banks we added staff lo satisfy

the Increased level of new regulations The additions In our compliance area put us in a good position to

continue to grow the bank and sotisfy the expeclations of regulators We will remain ever-vigilant of any new

challenges in the compliance and regulatory areas

We face these and any other challenges though from a position of strength

For example our credit quality remains very strong significantly outperforming industry trends Our

monthly provision for loan loss should remain at historically low levels for 2015 We will continue to closely

manage our loan portfolio to maintain our credl quality metrics which compares favorably to the highest

performing banks across the country

The projected loan and equipment financel1ease growth trust Income growth and morlgage and loon fee

income should allow for sufficient increases in revenue to bcost earnings in 2015

Opera ling expense management hos also been and will continue to be a primary area of focus

Our goal remains Grow revenue and minimize expense growth With an efficiency ratio of 56 we need only

$056 in expenses to generate $1 in revenue Our ratio like so many other metrics compares very favorably to our peer group of banks at approximately 68 and to all Michigan banks at 76

We extend a sincere and heartfelt thank you lo everyone who helps Bank of Ann Arbor succeed on a

dayto-day basis our employees directors shareholders clients and the community We look forward to

overcoming the challenges we face-and enjoying our successes-together in 2015

Timolhy G Marshall William C Martin

President amp CEO Chairman of the Board

ASSETS

CONSOUDATED BALANCE SHEETS

DECEMBER 31 2014 AND 2013

Cash and due from financial lnsli1utions

Interest-bearing balances in banks

Cash and cash equivalenls

Securities available-for-sale

Loans held for sale

Loans excluding covered loans net

Covered loons

Total loons

Federal Home Loan Bank stock al cost

Premises and equipment net

Cash surrender value of life insurance

Other real estate owned FDIC indemnification asset

Accrued interest receivable and other assets

UABILITIES AND SHAREHOLDERS EQUITY

Deposits

Noninterest-bearing

Interest-bearing

Total deposits

Other lxgtrrowings

Federal Home Loan Bank advances

Repurchase agreements Accrued expense and other liabUilles

Subordlnated debentures

Total liabilities

Shareholders equity Common stoclc no par value 2000000 shares authorized 887584 and

876396 shares issued and outstanding al December 31 2014 and 2013

Retained earnings

Accumulated other comprehensive income(lossl

Total shareholders equity

All dollar amounts in lhousands except por shoro data Unaudltad

2014

14329

183491

197820

146458

2476

667540

16417

683957

2548 12770

14311

521

153

13405

$ 1074419

s 262306

673343

935649

439

892

44744

11531

5 155

998410

4613

69736 l660

76009

$ 1074419

2013

15174

148563

163737

155015

1355

584760

21413

606173

2634 12277

12686

1546

1978

10610

968011

242975

603657

846632

881

1053

42333

8843

5155

904897

4966

58976

(8281

63 114

9680ll

Interest income

Loons including fees

Securllies

Taxable

Tax exempt Federal funds sold and other

Interest expense Deposits

CONSOLIDATED STATEMENTS OF INCOME

YEARS ENDED DECEMBER 31 2014 AND 2013

Federal Home Loan Bonk advances

Subordnaed debentures

Other borrowings

Repurchase ogreemcmts

Net interest income

Provision for loan losses

Net interest income alter provision for loan lasses

Nanineresl income

Service charges on deposit accounts

Income from fiduciary acliviles

Net gains on sales of loans Net gains on sales of securllles

Gain (ass) on sales of OREO

Other

Noninteresl expense

Salaries and employee benefits

Occupancy and equipment

Marke ling and business promoUon

FDIC expense

Provision for loan repurchase loblllty Other

Income beore income taxes

Income tax emense

Ne income

Basic earnings per share

Dlluted earnings per shore

All dollaromounlll In lhausands excap per share data Unaudited

2014

33979

l431

2081 352

37843

l521

24 172

42 149

1908

35935

l 587

34348

425

4259

l404

14

363

2291

8756

17598

2869

l156

510

5056

27 189

15915

4278

l l637

1317

1275

2013

32327

l430

2230

265 36252

l633 28

174

77

104

2016

34236

2 495

31741

441

3891

1427

27

534

1581

7901

16861

2282

1170

504

750

5061

26628

13014

3340

9674

1093

1036

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

YEARS ENDED DECEMBER 31 2014 AND 2013

Net income

Other comprehensive income

Unrealized gainslosses on securities

Unrealized holding goln(loss) arising during the period Reclassification adjustment for losses (gains) included

In net Income

Tax effect

Net of tax

Comprehensive Income

All dollar amounts In thousands except per share data Unaudited

2014

11637

3782

(14) 0280)

2488

14125

2013

9674

5845)

27) l996

(3876)

5798

bullbull

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY

YEARS ENDED DECEMBER 31 2014 AND 2013

Balance January l 2013

Net income

Other comprehensive Income (loss)

Deferred shares plan

Exercise of stock options (29028 shares)

Repurchase ol 40816 shares of common sleek

Issuance of common stock

(400 shares)

Stock based compensation expense

Balance December 31 2013

Net Income

Other comprehensive Income (Joss)

Deferred shores plan

Exercise of stock options (56 176 shares)

Repurchase of 44988 shores of common stock

Stock based compensallon expense

Cash Dlvidand ($100 per shore)

Balance December 31 2014

Common Stock

6410

30

1022

(969)

28

445

4966

32

3118

(4039)

536

4613

All dolar amounts In thousands except per shore data Unaudited

Retained Earnings

$ 49302

9674

58976

11637

1877)

$ 69736

Accumulated Other

Compiehensive Income (Loss)

$ 3048

(3876)

(828)

2488

1660

Tola Shamholderf

Equity

$ 58760

9674

(3876)

30

1022

(2969)

28

445

63114

11637

2488

32

3118

(4039)

536

(877)

$ 76009

SUMMARY Of SIGNIFICANT ACCOUNTING POLICIES

Nahnn gl Oogralppbull qnd Prlndplu gl ConsoldgtgP The consoUdoted flnoncial statements Include Arbor Bancorp Inc and Ila wholly owned suhstdkuy Banko AnnAtbor (Bank) logether referred lo os lhe Cotporallon On fanuaty l 2013 the Corporotion through a newly established Bank substdlmy Banko Ann Arbor leasing (leoslng Company) acqutedall oI the slock of the Ervin leasing Company an Ann Atbor Michigan based leasing company which provides business equipment dl1eci fioanclng leases lo companos ocross Iha United Slalos lnlorcompany tronsacllons and baamcs aro olinunolod In consoldollon

As of July I 2014 Ervin Leasing Companyienamed and rebronded to Unifi Equipment Finance

The Bank provides financial services through Its oUicas In Washtenaw and Wayne counties Its prlmorydepostt products ore checkinQ savings and lcrm certillcate accounts and Its primary lending prolucts ate residential mortgage commefCiaL and Installment loans Substantially all loons ore secured by specillc Items of collateral Including business assets consumer assets and oomrrercial and resldentol real estate Commercial loons ore expected lo be repaid from cash low from opemttons of businesses Other financial instruments which polentiolly represent concentroUons 0pound credit risk include deposit o=unts in other financial lnsUluUons and odoml funds sold

Subuquinl EycntrThe Corporation hos evaluated subsequen events for 1ecognltlon and dlsdosu10 through februory JO 2015 which Is the dote the flnonciol statements were available to be Issued

U1c o Es ti mg trbull Th prcpom linonciol stolamons m conlormlty wilh accounting prlnclplas ganorally occcplod in I ho United Solos of Amedeo management makes eatlmoes and ossumplons hosed on avoloble Information These estimates and ossumptlons ofect Iha amounts reporled In the financial sotemenls and the dsdosutes provided and future results cculd dlller The ollowame or loon losses the reserve for repurchase of sold loons the carrying amount cl the FDIC Indemnillootlon Asset lease resduol values and the folr values cl ftnandal Instruments ore particularly subject to change

Cash and cash equlvalenls includes cash deposits with other llnonciol lnsUtuUons under 90duys sho1Menn Investments and federal funds sold Net cash flows are reporled lor CUstomer loon and deposit transactions federal funds purchased and repurchase og1ccmonts

lncrnslmiddotBcmlng Dcposlts In Banhbull nterast beating deposits In bonis mature wllhn one year and ore co riled al cost The balance outstanding at year end 2014 and 2013 was held al the Federol Reserve Bank

Debt socuntics oro closslliod os ovolloblo lor solo when hoy mighl bo sold bororn mofurlly Securiliesovoilablo for sale ore corrled at fair value with umeatlzed holding gains and losses reported In other comprehensive Income net o( Ox Interest Income includes amortlzatlon of purchase premium or discount Gains and losses on soles are based on the amortized cost o the socurlly sold

Interest Income ndudes omo1ttzallon of purchuse p1emum or discount Premiums and discounts on oocurlles ate omorllred on Um levelmiddotyield method wlhoul nnticlpotng prepayments axceptfa1 mortgage backed secu1llles whettt ptepaymenlll are antlclpaed Goins and losses on soles ore recorded on the trade dote and determined using the spellc denlillcotlon mehocl

Management evoluoles sacurltles for olher-thonmiddotemporory lmpalrmen (QTnl on at least a quarte1ly basis and more frequently when economic or market condUons wormnt such on evaluation For securlties In an unrealized loss posltlon monagemenl considers the exenl and duration of the unreolzad loss and the llnonclal condUan and neormiddotlerm prospects of lhe Issuer ondolso assesses whelher ll Inlands lo sell or II ls more lkely lhan not thal II wlll be required lo selL a security In on unrealized OS11 poslllon before recovery of Its amortized cost basis li either of the crllerla regarding Intent or requirement to sell is met the en Ute difference between amortized cost and fair value Is recognized as lmpannent through earnings for debt securities hot do not meal the olmemenloned ctl1eria lhe amount of Impairment is split Into two components as follows ll orn ieloted lo credit Joss which mu11t be 1ecognlzed In the lncome 11tatement and 2) olhermiddotlhonmiddotlemporory Impairment (0111) related lo other faclors which ls recognlmd In other comprehensive Income The credit loss ls defined as the d1flerence between the presenl value of the cash flows expected to btt collected and the amottlied cart ba11is For equity aecudtes thu en Ure amount ol mpolnmm ls 11lCOQnlzed through earnings

fcdpral Homo Ipgp Bgpk FHI HI Stock- Tho Bank is a mamhorol lhafHtB sflilom Mambors ara roqurod oowna ca1tnlnamount of stock based on the level of borrowings and other faclors and may Invest ln oddlionol amounts FHLB stock ls cotrled at cost dossifted os o restrlcied security and perloclcoly evaluated hr Impairment based on ulllmoe ecoveryof par value Both cash and stock dividends ore 1epotled 01 Income

LoaruHildJiuSttlc Loons orlglnoled and lnlended or sale Jn the secondary morhl are corrled al Iha lower of cos or poundair value In the aggregate os determined by outslondlng commlments from Investors Net unreolzed losses ii ony ore recorded as o valuation ollowanoe and charged lo earnings Loons are sold with servicing released Buyeni do not hove recourse against Iha CorporoHon for subsequent loon OSlell However incerton sluoUons the buyer con require the Corporotlon to rnputchose loons

Loww Loons liiat monagemen has the In I en and abllty lo hold for tha loreseuabla future or unUI maturity or poyul are 1epo11ed at the principal balonett outstanding net o pure ho premiums and discounts and on allowance for loon losses In1e1est Income is roporlarl on tho tnterosl method and lndudas omotllrotion c[ not daforrcd loon foos and costa ovor tho kxm totm lnlerost incomo

All dolloramounll In lhousonds except per shore do lo Unaudled

SUMMARY OF SIGNIFICANT ACCOUNTING POLICJES Continued)

on all loans Is generally dllconUnued al the Ume the loan Is 90 days delinquent unless the credit Is well-secuted and Jn process ofcallecUon In all cases loans ore placed on nonaccrualor charged-oil at an oorUer dole JI collection ol prtncpa] or lnleresl Is considered doubtful All Inlet est occrued but no received for loans placed on nonoccruol Is reversed against Interns Income Inleresl received on such Joans ls occounled for on lhe ooshmiddotbosls or cos recovery melhod unlll qualllylng for return lo accrual

Loons ore rel urned to 0ccruol salus when oll lhe p1lnctpal ond interest amounts conlracluollydue me brought current and [ulure payments ore reasonably assured

Cpyornd Ipgnsbull Loans acquired in 2010 In a Federal Deposit Insurance Corporation (FD)C)-asslsted transaction are oovered under a loss sharing agreembullmtandore refoned lo as middotcovered loansmiddot Pursuant lo lhti trms or thti loss shoring agreem1mts covtired loons are subacl lo a stated loss threshold whereby Iha FDIC will reimburse the Corporaton [or BO of IOSStls incuned The Corporation will 1eimbursa he FDIC for Its share of recoverlm with respect lo losses poundor which the FDIC paid the Corporalon a mlmbmoomont undor tho loss sharing og1oomont Tho FDICs obllgolon to rolmhurso tho Cotpotc1lion for ]()SS()S with raspcct lo covered loon begins with the first dollar of loss incurred

Coveted loons warn recorded at far value al the time of acquston Fair values for covered loons are hosed on a dscounted cash flow methodology lhotconsdered various actors Including the type of loonond related collalerol dossflcatlon status fixed or votiobla inleresl role tlm10I loan and whehtir or nol lhe loan was omorlirlng and o discoun ralti reltJClin11 the Corporolionmiddots osoossmont of risk inhomnl in tho cosh llow cslmoos Covorcd loons woro gruupod tcuolhcr according to smilor choroccrisUcs

ond were treated in the aggregate when opplylng various voluaon technlques

AIJlurchose certain covered loons had evidence of credlt deterioration since orlgnolion These loons ore accounted lor lndMdually The Corporation estimates lhe amount and timing of expected cash flows for each purchased loan and the expected cash flows in excess olomount pold Is recorded as Interest Income over the remaining life of he loon or pool (occretable yield) The excess of the loons or pools contractual principal and Interest over expected cash Hows Is not recorded (nonocc1etoble dllerence) Over the life ol the loon or pool expected cash flows continue lo be estimated II he present volue oI expected cash flows is less than the carrying amount o loss is recorded ff the presen volue of expected co sh Hows Is greater lhon the carrying amount It ls rocognlzed as port o future Interest Income

Dire cl Dnqnclng klse Rrcynhln11middot The results of the Corpotolons equipment loosing acUvUes are recorded within loons on the consolidaled balance shtiel niese direct lino11cing leases provide for lull recovery ol the equipmenl cost over lhe lenn al the lease

The CorporaHons nal Investment in direct Hnanclal leases lscomptlood of lhe lollowtng elements minimum lease payments receivable the esllmated unguaranleed residual value ol the leased equipment at the lease lermnalon dates and unamortized lntiol dlrect costs less unearned Income Estimated guaranteed residual values are revlewed perodicolly to determine [ the cunent ttsthnalc of the equipments fotr value appears to be below Us recorded estlmue If rred )esldual vululS urn adjusted down word lo reflect adjusted estimates of fair market values Upward adjustments lo residual values me nol permitted

Unoomod lncomo fa tho amount bywhlch ho mlnmum caoo paymonts rccclvnblo plus tho osUmotcd unguarantood rosdual valua exceeds the cost of the leased equlpmanlo the inception of lhe lease Uneomed Income ts amortized aver the Initial lease term lo p1oduce a constant rote ol teum on Iha net Investment In lhe lease lnllol direct costs ol ocqultlng a lease are coptallzed when incurred and amortkedover the Ille of the lease consistent with the method used lo recognize Interest Income

The Corporallon evoluotes lhe colectablllly o[ Is leose receivables hosed upon carloln foclors such as hsforlcol colteclon I rends and aging categories Leose receivables ore wrUen of against the allowance or loan losses when the receivable Is determined to be uncollectlbe

AllniulllllU The allovance or loan losses ls a valuaton ollowonce or probable Incurred credit losses Increased by the provislon lor loon losses and decreased by charge ols less rncovetlttS Munogemcnt estltnates the ulowonce bulome requited using past loon loss experience the nature and volume of the portfolio Information aboul specific borrower sluatlons and estimated collateral values economiccondltions and other factors Allocatons o the allowance may be made for specific loons bul ho onllro alowonco Ill ovoilobla or any loan hot Jn monogomonfs judgment should be charged off Loan losses aro charged against the allowance when management believes the uncollectlbllty of a loon balance Is confirmed

The allowance consists al specific and general components The specific oomponent relates lo loons hot ore Individually clossifed os lmpJlred or loans otherwise closslfledos substandard or doubtful The generalcomporenl covers rcgtn dassilled loons and Is based on hlslorleol loss experience odusled for current Iocors

A loon Is lmpored when full payment under he loon terms Is no expected Nonbullhomogeneous loan classes such as commercial and commercial real estate loons and homogeneous loan segments such as mortgage and consumer loons modified as troubled debt restructu1lngs or loons ossocloled with non-homogtineous relationships are lndivkluolly evolualed for lmpomamt 1pound a

loon Is Im poi red o portion of the ullowonce Is allocated so hot Iha loon Is tepo1led net at the p1eoont volue o estimated futurn cash flows using the loans exlstlnQ role orot the fair value ocolloterol ii repay men ls expected solely from the collo1eral Lorge

All dollar amounts In thousands except per shore do1o Unaudited

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

groups of smoler balance homogeneous loons such as consumer and residential real es tale loons are collectively evaluated for impalnoont and accorrlngly they are rot sepomtely identified for lmponnenl disclosures Loans for which the terms have been modiled resulting In o concession and for whch the borrower s experiencing flnorcial difficulties are considmed troubled debt resructurtngs and classified os Impaired

Factors consdurod by manogomonl In dolor mining lmpnlrmont lncluda payment status collatora value and tho prohohUty of collecting scheduled principal ond Interest payments when due Uxlns hat experience lnslgnllloont payment delays and payment shortolls generoly are not clossled as impaired Management determines the significance o payment delays and payment shortfalls on a case-by-case basis toking lnlo consideration all of the cl1cumstancas surrounding the loon and the borrower Including Iha length of the delay the reasons for the delay the borrowers prior payment record and the amount al the shottfoll In re lo lion to lhe prlnclpo ond lnleresl owed

Troubled debt restructurlngs me sepmotely Identified poundor lmpormen disclosures and ore measured at the preoon volue ol estmoed future cash flows using the loons effective rote at Inception lpound a troubled debt restructuring Is considered to be a collateral dependent loan the loon ls reported net o the oir value of the collateral For lroubleddebt restructurlngs that subsequently default thti Corporcton dete1mh1cs the amount a( reserve In occordancu wilh the accounting pollcy for the ollowonce for loon losses

Tho gonorril componontcovots non lmpahcd l=ns ond la hosed rm hsloricol loss oxporlanco adjuod for currant factors Tho hlstorlcol loss experience is de1ermlned by portfolio segment and Is hosed on the actual loss history experienced by the Co1po1alon over the most recent five years For all segments he actual loss experience Is supplemented wlthother economic facto is hosed on the risks present for each porIollo segment These economic foclots Include consideration of the folio wing levels of and trends In delinquances ond lmpored loons levels or and trends In charge-offs and recoveries trends ln volume and terms of loons effects ol any changes In risk selecon and underwrllng slondords olher changes in lending pollces proeedures ond praclkes eperienca oblty ond depth of lending managemonland other relevant staff national and loco economic trends and conditions industry conditions ond efects ol changes In credl ooncanrolions The following portfolio SPgments have been Identified

Comrnerdol - Loons to businesses hat Ole sole proprietorships partnerships limited liobllty companies and corporations These loons ore for commercial Industrial or p1ofessionul purposes The riskcharactctlstics of these loons vory based on the borrowersmiddot business and industry as repoyrent is typically dependent on cash flows gene ruled from the underlying business Within this loon segment the Corporation has identified loon classes of commercial and industrial commercial realestole and commerca kmd devolopmant

Real Estate - Loons to purchase or rellnance single omlly residences The risksassocated vi th this oogmenl ore generally dependent on the ovomU real estate volue environment and Individual payment oblgalons Real estate Is subject to changes In market valuation and can be unsloble fora variety of reasons Within this segment the Corporation hos idenUIJed classes of resldenllol ond home equly loons

Consumer-Term loans or lines olcredlt for the purchase ol consumer goods vehicles or home Improvement The risk characteristics of the loom1 In I his segment vary depending on the type of colateml but generally repayment Is expected from a customerconlnuinQ to generate o cash How I hot supports the calculoted poymentobllgaton Secondary support could involve llqudution o tOlulerol

Loosos-Dirtel Flnanca equipment loaoos Rislchamctoristcs vary hosed horn tho borrowers busnoss and lnduatty as tepaymenl Is typcallydependent upon cash Hows generated ram the bonowers operations Secondary support could Involve repossessing the lensed colloleral

FDIC lndomnjficu The FDIC lndemnlilcoUonosset results from the loss share aQreements In the FDCltzsslsted transocllon The ossel ls measured seporalely from Iha reloed covered osses as they are nol conlroctually embedded 1n lhe assets and ore no transferable wllh the asses should lhe Corpora Hon choose lo dispose of them and represenl the acqulslllon date fair value al expected reimbursements from the FDIC Puisuont lo the arms al the loss sharing ag1eemenl cove rad loons ore subject to a stated loss threshold whereby the FDIC will reimburse the Corporation for 80 of losses Incurred These expected reimbursements do not Include roimburroblo amounts related to future covered expendlures These oosh flows ore discounted to reflect a metric of uncertontyofthe Urning and receipt of the loss shoring reimbursement from the FDIC This asset decreases when losoos aie realized and clohns me submUled lo the FDIC or when customern repay their loons In full and expticOO l=cs do not occur This ossel also Increases when esllma1ed future lossea Increase and decreo6e3 when esttno1ed future losses dec1ease When ostlmotod futuro loon losses lncrcaoo ho Corpomton rccorrls a provision for loon lossos ond lncrcasos Its allowonco for loon lOS009 occordngly The resulting increase In the FDIC lndemnlfcollon ossel Is recorded os on offset to the provision for loon losses During 2Dl4 and 2013 lhe provision for loon losses was offset by S320and Sl266 teloed lo Increases In lhe FDIC lndemnIlcotion asset

All dollar amounts in thousands except per share data Unaudited

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Continued)

otbtH Reg y1qt1 Own ad OREOJmiddot Assets acquired through er IIllltead cf loan forocloouro ore inltlally recorded ot loir value less costs to mill whim ocqulredestabllshlngo llew cost lxms These assets are eubsequentlyoccounted for at lower cl cost or fair value )ass eitlmuled costs to sell 1pound fair value declines subsequent to lo1lltlosurn u valuation allowance is rncorded through expense Oparntna cosLI nfo1 ocqulslUonara expansed

OREO acquled by the Corporation lhtough loon defaults by customers oncove1ed loons or acquired by the Corpomllon as pail oI Its acquisition of New Uherty Banklsoo Note 2 Business Comblnotlonsl me covered under the loss shoring agreement discussed above Pursuant to the etms of the = shodng ag1aemen coveted assets ore subject lo a s lo led loss threshold whereby the FDIC will reimburse the Corporation or 60 of losses Incurred Any gains or losses realized at the time of disposal oro portlolly offset by tho FDIC toss shore and oro roloctcd In Income Al year-end 2JM ond 2013 SO omi$155 ol lha Gorporalions OREO wos subject lo the loss shoring agreement

qulpminl god 1ltauhold lmnroyemenlgbull Lond Is corrled at cosL Premises and equipment ore stoled ot cost less accumulated depreciation generally com puled on the straghtmiddotlne basis over the assets useful llves and over the terms of the lease or the esthnotm useful llves lor leasehold Improvements whichever is shortur

Qmb Surrnndqr Yaluo al J lfo Jnsumncebull ThoC01pornlon hos punhaood Hfohmurnnco pollclas on 001lain key oxccutivos Cash summdor voluo ol lfo Jnsuroncc Is 1ocordrnl ol lho amount thot can ba 1callzod under tho nsuronco controctot tho balonco sheet dole which Is the cash surrender value adjusted for other charges or other amounts due tho tore probable otseltlemenl

lampna-Term Assa1bull Premises and equpmen olher lnlongble assets and other long-term assets 01e rnvewed for Impairment when events indicate heir carrying amount may not be recoverable from future undisccunted cash flows If lmpolred the assets are recorded a fair value

Bepurchgee Agrccmgnj11bull SubsanlolyaI repurchase ng1eement UobiHUos represent amounts advanced by various customers These balances ore not deposits and ore no covered by Jederal deposit lnsuronce SecurUes ore pledged to cover theiie lablllles

Jrcrmfers gl Fingncgl AsGesbull Ifonsfers of financial osselsare accounted for as soles when control over the assets hos been rellnquisbed Control aver transferred ossels Is deerned lo be surrendered when the assets have been isolated from the Corpomlion tho tronsforco ahtolns tho dght U1no of conditions that constmln II Imm taling ad van logo of that right to pledge or cxchango tho tronsforrod assets end tho Corpo1otlon dOCll not maintain cifoctlvc control over tho hansfoncd assets hrough an agreement to repurchase them before their maturity

smck_Enenutllm Compensotlon cost is recognized for stock options and restricted stockawords issued lo employees bosed on the fair value o[ lhese awards at Iha dote 0pound gronL A BlackmiddotScboles model Is ullllzed fo eslmale the folr value cl sled opHons

GompensoUon cost ls recognized over the required service period generally defined as Iha vesting pedod For awards wllh graded veslng compensation cost is rncognlzad on o sralghlmiddotline bosls over the requisite service period for the en Ure award

lncomo TggeBbull Income twc expense fa the total of he current year income tax due or refundable and the chonge In deferwd tux 0sets andlobillties Ikfened toxossels and lobiUlei me he expected future ax amounts poundor the tempomry dUferences btitween cnnying amounts and tax hoses al ossots and lobilltles computed using onoctod lox mos A valuation allowanco IE ncodcd reduces delened tax assets to Iha amount expected o he realized

A tax position is recognized as a benefit only Ell ls more likely than not tho the tax position would be sustained In a lox exominolcn with o tax exomlnatlon beng presumed to occur The amount recognized is the largest amount of tax benellt tho Is grealer than 50 lilelyol being realized on exomnoUon For tax posllions no meellng he Mmore likely hon natM lest no lox benelll Is recorded

The Corpototon recognizes lnterestondor penalties related lo Income tax matters In Income tax expense

QfBglgpcemiddotShMI Ejpgpclgl Jostrumentw Financtol Instruments include off balance-sheet credit Instruments such us

commitments to make loons and stondby lettets cf credl Issued to meet customer Ilnomlng needs The face omoun for these items represents lhe exposure to loss before conslderlng customer collolerolcr oblllty lo repoy Such Iinoncol Instruments ore recorded whon they mo funded

Earnings Per Shattbull Bosc earnings per shorn ls net Income divided by lhe weighted overage number of common shores outslondlngdudng the pedod Diluted earnings per shore Include lhe dilutive effect cf oddltonol potential common shares tssuoble under equity hosed plans

All dollor amounts In thousands excepl per shore data Unaudited

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Conlinucdl

CQw1UUicnelyc Ineqmobull Comprehensive Income conslslll o[ net income and other comprehensivu Income Other comprehensive income ndudus unrealized gains and losses on suurlU avalablu or salu which ore also recognized as separate components ol equly

Lon Cantlngcociosbull Loss contingencies Including claims and Iago ocilons otlsng Jn the ordinary courso of husnass om rocordcd as llobllUes when the likelihood o loss is probable and on amount or long a cf loss con be reasonably estimated Management does not believe there now are such molters that will hove a material elfect on the fnonclol solements

Re1rclpps on Cruhl Cosh on hand or on deposit wllh he Federal Reserve Bonk cf Sl521 and $1312 was required to meal regulatory reserve end clearing requlrnmenls al year end 014 and 2013

fair Yalur cf Engncgl ipdltumenll Fair values o[ llnoncol Instruments ore estimated using relevant market lnFormoion and other assumptions as more fully disclosed In a sepuae note Fair value estimates Involve uncertain Iles orcl matters of sgnlllcont judgment regarding inerest rotes credit risk prepayments and other loctors especiolly ln he absence of brood rno1kets or particular Uems Changes In ossumptlons or In market conditions could sgnillcantly olecl the estimates

Diyjdnnd Bosricljanbull Banking toguotions require molnlainlngcolaln cnpla lovos and nay mil tho dvldonds paid by tho honk to tho holding company or by Iha hodina com pony ta rhmoholdnrs

Reclnsaificalionsbull Some Items In the prior year financial statements were reclassifed to conform lo he current presentation Reclassillcaons had no efec on prior year net Income or shareholdersmiddot equity

ampl9plion gl Nuw Aecgunlng Sgpdgrdsbull In Februory 20[3 lhe FASBomended exlsllng guidance reloled lo reporlng amounts rcclossUiOO out ol accumulated othorcomprohonsivo income Thoso amondmonts do not change tho current rcquiromons or reporting net Income or other comprehensive income In flnonclol statements These amendments require an entity lo provide lnformatlon about the amounts reclassified out of accumuloled olhercomprehenstve Income by componenL In addltlon on entty Is required to present eilher on the loce of the state men where net Income Is presented or In the notes signifconl amounts reclassified cul ol accumulated other comptebensve Income by the respective line Items of nel Income bu only j[ lhe amounl reclassified 1s required under US GAAP to be reclasslfied to ne Income In its entirety in the soma reporting pedod For other amounts that ore not requited under US GAAP to be redassfied In their entirety lo net Income on enlty Is required to crossmiddot mforonoo lo other dlsolosutcs roqutcd under US GAAP that provide addtonal dctals oboul thoso amounts These omondmcnts ore elfeclve prospectively for fiscal yeats and lntedm periods within those years beginning alter December 15 2013 Early adoption Is parmltled The elfecl ol adcptlng his sondard dd no hove a moterlal eleltt on the Corporatons opeioUng results or llnanclal condition

In Decombar 2013 lhu FASB omandcd ho Glossary of lhu Codilicotlon lo include a slnulu dollniton of o public buslnossantly for future uso in US GAAP Tho doFloUon ol a public business enlily will ho used in considodng tho scope of now finonciol gudonco and will identify whether lhe guidance does or does not apply to public business entitles The amendment does not allectexistlng lequ1ements and there Is no elfectlve date The adoption ol lhs sondo1d dld not hove a material effect on the CompanyS operotng rosuls or llnondol condition

lnJonuory2014 the FASB amended existing guidance lo dailfy when a creditor should be conside1ed lo hove tecelved phrJcal possession of rnsidonlol tool oatolo propaty collotomldng o crmsumcr mmtgogo loan such that tho loon should ho dcrccognlzod and tho 1001 estate rccognzcd Thcso amendments dorify that an in substance repossession or foreclosuro occurs end a creditor s considered to have received physcol possession of resldentol reol estate property coloterolldng a consumer morlgoge loon upon ether 11) the credlor oblonlng legal title to the residentlol 1eol estate properly upon completion of a foreclosure or (2) the borrower conveying oil lnlarest In the resldentol real eslae property lo tha credtor to sotsfy that loon through completion of a deed Jn lieu cf foreclosure or through o similar legal ogreemanl Addillonol disclosures ore required These amendmenls ore eHecllve for publc business enUles for annual perJods end Interim periods within those annual parcxls begtnnlngafler December 15 2014 Amendments In th ls stondord con be applied using a modified retrospecUva or prospective transition methcxI Early adoption ls permlted The adoption ol this standard ts not expected to hove a maedol effect on the Componys operating results or llnonciol condtlon

In Moy2014 the FASS amendOO existing guidance realOO la revenue from con1mcis with custame1s 111sumendment supersedes end replaces nearly all existing revenue recognition guidance Including lnduslrymiddotspeclflc gudonco establishes a new conltolshybosod ovonuo mccgnllon modal changos the basis for deciding whon rovonuo is rcccgnizod ovor limo er at a poln In Hrno provides new and more detailed guidance on speclflo epics and expmdsand Improves disclosures about 1evenue In oddllion his amendment specfes lhe accounting for some costs to obtain or fulfll a contract with a customer These omendmenls ore elfectlva for annual IeportJng periods beginning ofter December 15 2016 lncludng Interim periods within that reporting per Joel Early oppllcolonls net permitted The amendments should be applied retrospectively 1o all periods presented or retrospectively wllh lhe cumulaHve effect recognized ol lhe dole o[ lnllol oppllcotlon The Company Is currenlly evoluollng tho Im po cl of his new occaunUng standard on Iha consolidated financial solornonts

All dollar omounts In thousands except per shore data Unoudtted

Ervin Leasing Business Combination

On January l 2013 the Corporotonacquhed 100 of the outstanding common shares of Ervin Leosng Corporation In exchange for cash lo toling $4622 Under the erms of he acqulsltlon oll common shareholders rncelvtgtd cash equal ta tatul equity o Ervin Leoslng as of December31 2012 plus $600 Ervin Leosing Company results of operotlons ware Included In the Corpomlans rnsults bognnlng Janumy l 2013 As al July l 2014 Ervin Locmng Company ronamcd and rabmndod to Unifi Equlpmon Flnanco

The following able summarizes the consdetollon paid for Ervin Leosng Company ond Iha omounts ol lhe assets ocqulrnd and llobUias ossumad recognized al he ocqusUon dote

Consderalon Cabullh

For Value of Total Conslderollon Transferred

Recognized amounts of Identifiable assets acgulred and Uabllites assumed

Gosh and cash equivalents Direct llnoncng leases Noncompeta agreement Dlharossels

Tola assets a ired

Notes payoble Other labHUes

Totol lobllltcs assumed

Total idenlfloble net assets

4622 4622

366 11304

100 l098

12BSB

7514

732 8246

4622

No goodwill or olher lnlanglble ossels beyond lhe noncompale agreement above warn generoled as par of lhe Ervin Leosing business combinotlon

New Llbe1ty Business Combnaton

On May 14 2010 the Corporation enterecl into a purchaie nnd ossutnpton agreement (Naw Llbetty Agreement) with the Federal Deposit lnsuranco Corpomlion FDIC) as rncclvor purs1mnl to which tho Corpomton mqulrcd cctlan asts ondassumcd subslontaJy oll o[ the deposits and cetlan lobUtias of New Llbarty Bon(Naw Liberty) New Liberty ope roted one bonklngcanar In Plymouth Michigan

In connecton with the New Liberty ocquslon the Corporaton entered lnlo a loss shoring ograamenlwlth the FDIC that covers mos of New Llbarlys ossels hosed upon the sellers records Including single family resldental marlgoge loons commerciol rool es1ate and commercial and ndustriol loons and OREO (collectvely covered assets) The loss shoring agreements are subject lo certan servicing procedures as sped fled in agreements wllh the FDIC The loss shoring agreements opplicable to sngle family residential morigoge loons provide for FDIC loss sharing ond Corporation reimbursement to tho FDIC for ten years The Joss sharing agreemens oppllcoble to all other covered assets provide for FDIC loss shoring for llva years and Corporation ralmbursomonl of recove1les lo he FDIC far elght yeurs The eXpgtcted Jembursements under the loss sharing ug1eements were recorded us an lndemniUcoHonosset al an esHmated fair value of $15949 on the acqutsiliondote whch represented the present volue oI the oxpoctcd nelcnsh rohnbursomon rolalod lo tho lolS shoring ogmomonls

The CorpotoHon acquired cetlan olhar New Llbarty assets nolcova1ed by Iha loss shoring ogreemenl wlh Iha FDC includlng =sh and secutlles purchased ot lalrvolue At acqusUon lnogg1egole loons ocquled hod on unpaid principal balance oS9mand a lar volue o$69JXl9 and deposits assumed hod o bolo nee of $90l 17

Alldolloramounta In lhousands except par share dala Unaudled

ADDITIONAL INFORMATION

We hove Included ltnonciol inlormotion for Iha yaarendftd Decamber31 2014 Our full ftnancol statements Including noes wem audited by Crowe Horwath our independent publkaccountont ond Crowe Horwath goveon unquallfled oplnon The compeo audited flnondol stataments Including the oudUors opnlon and notes ore avoloble upon request

11 you would lile o copy of the audled financial stolemenls or If you have any quesUons concerning the annual meeting pease con la ct your bank pmsdonl TI mo thy G Marshall at 125 South Filth Avonuo PO Box 8009 Ann Arbor Michigan 4BID7

All dollar omounts In thousands except par share data Unaudited

Officers

Executive Management

Timothy G MarshoJI Presidentamp Chief Execulive Ofllcer

Charles E Crone fr Execullve Vice President amp Chief Revenue Officer

Pall H Jud11on ExecuUve Vice Presfdenl amp Chfef Opera Ung Officer

Lyle r Dahlberg First Vice President Trust amp Invesmenl Group Manarier

Cynlha Livesay Firs Vice Presidenl Credi Administration

Mark J Slade First Vice Presfdenl amp Chief Financial Ofllcer

Mortgage Retail amp Privatbull Banking Services

Patrlck A Tamblyn Senior Vice President Private Banking Manager

Klrsly E Haholan Vice Presldenl amp Mortgage De[Xlrlmenf Manager

Amnndo M Harl Vice Presden Administration amp Opemtfons

Kimberly A Clugston Vice President amp Senior Mortgage Loon Officer

Linda S Brewer Vice President amp Private Banking 0ffcer

Mary Hays Vice Presden Private Bonling Officer

Chmles W CracrcrH Vice President Befall Moitgage Soles Manager

Curl DEnt Vice President amp Morgaga Loan Officer

Christine G Hold Vice Presfdenl Cash Management

Krltlna L Moyer Vice Presden amp Plymoulh Branch Manager

Joan C Hendrlck1 Vice President amp Main Office Brandi Manager

Kevin M Kramer Vice Pzesidenl Pcivale Banking OWrer

Denise J Sialleld Vice Presden amp Marlgage Loon Officer

Dennis D Ticknor Esworh Ofnce Branch Manager amp Health Savings Account Specialist

David K Pote Ypsilanti OfJee Branch Manager

Shelley L Rankin Saline Office Branch Manager

foseph D Croigmile Motlgorc Loon OfJeer

Kevin C Salley Morgage Loan OfJeer

William E Smith fr Mortgage Loan OfJrer

Sondra L Bccver Deposit Operations Offirer

Stoey B fohnson Sr Relolionsl1ip Banking Ollicer

Kimberly K Snow Relalionship Banking amp Cash Management Oflfcer

FinanC9

Lha AMason Vice Presidenl amp Infernal Auditor

Jame$ A Miller Vice President amp Dfreclor Human Resources

Bmbcrro L Morrison VicePresiden

Bella MFemondez Assisan Vira President amp Accounting Oflicer

Trust amp Investment Monagemcnl

Thomas R Kalloword First Vice President amp Senior Trusl Olflror

Stephen J Seymour Senior Vice Presden amp Senior Investment Olflcer

Sonia S Perle Senior Vice Presidenl amp Investment 0[cer

Cothlcon L Savoie Senior Vice Prosldont amp nvestmenl Offrer

Margaret L Vogel Vice President amp Trusl OfJcer

Erin E Archambault Vice President Trust Operations

Eric P Helbm Vice Presidenl amp Director of Business Development

Deborah A Jones Vice President amp Business Developmen Officer

Jacqueline Jenkins Vira Presidenl Portfolio Manager amp Businoss Dovclopmcnl Ollcor

Mllzl J Talon Vice President amp Trust Offlrer

Diano S Winner Vice President amp Investment Officer

Sarah Dobson Campbell TrusOffcer

MarkA Sklfl lnveslmenl Oflicer

Commercial Lending

Walto r G Byes Presden Saline District

Michael L Michon President Plymouth Districl

Michael H Chotos President Ypsilanti Districl

Mlrhuel A Cole Group President Technology Industry Group

Sall sh B Jost Senior Vice President amp Senior Loon Officer

Hons W Maler Senior Vice President SpeclolY Banking

David A Guenther Vice President amp Sonier Loon Officer

Robert R Roiie Vice Prcsldenl amp Senior Loon Ofllcer

Mork D Bally Vice Presldenl amp Commercial LoonOfflrer

Jonathon P Bowdler Vico Prrsidcnl amp Commercial Real Estate Manager

Jomes J Plummer Vice President amp Cormnerciol Loon Olicer

Mork H Holtz VicePresidenl TechnoloQy Industry Group

Information System1

Jeffrey J Stanton Vice Presden I amp ChiefTechnalogyOficer

Marketing

Jonke M Ortbrlng Vice President amp Marketing Department Manager

Cwdil Administration

Dawn M Prescott Senior Vice President amp Managed Assets Offirer

Trina M VonNesl Vice Prellden amp Credi Manager

Stephania N Hnnigan Assistant Vire President Consumer Credll amp Compliance

Soro L Hoffman Assistant Vice President amp Small Business Lending Offirer

Pamela f Wetzel Credi Atlminislrolion Officer

Compliance

Susan E Wcrgnor Vice Presfden Compliance 01icer amp Compliance Department Manager

John E Fosler Vice Presden I BSA OFAC amp Security Olirer

Brion J Powers Asslstanl Vice Piesden BSA amp Security Special isl

Cynthia K Shacllor BSASecurity Admlnlstralve Oficer

Unifi Eq11ipmbullnl Finance

Raymond J Grimshaw President amp Chief Ixcculva Olliccr

Thomaii J Conzolmmm Secretary Treasurer amp Chief Financial Officer

Directors

Thomas P Bo1dere Ptesdenl Midtown Group Inc

Jan L Garfinkle founder amp Manarlng Director Arborelum Ventures

Isadore J King President amp Chief Executive Officer Synergy Partners LLC

Timolhy G Marshcrll President amp Chief Execulfve Olflcet Bank of Ann Arbor

Michael C Martin Vice Presidenl Firs MarUn Corporalon

William C Martin Chairman Athletic Director Emeritus University of Michigan

Erneel G Perich Presden Perich + Partnets Ltd

David R Sams Mcrnaging Partner 360 Advisors LLC

Joseph A Sos Owner Ses Moors Inc

Cynthia H Wilbanks Vice President for Government Relalons University of Micbfgan

Jelfrey S Williams Chairman amp Chief fxeculve Offfcer Tangent Medical Technologies NeuMoDx Molecular Tnc

Directors EmcritU6

Jomes WAndorson Jr President The Anderson Assodoles

Richard P Eldswick Foundfnrr Diteclor Arbor Partners

Jun Barney Newman Vice Presiden Ann Arbor Dlslrfcl Ubrary Bocrrd

Rlchord N Robb DDS Regan Emeritus Eastern Michigan University

Downtown Ann Arbor

125 South Fifth Avenue

Ann Arbor MI 48104 7346621600

Downtown Saline

1 79 East Michigan Avenue

Saline MI 48176 7344705001

Downtown Ypsilanti

7 West Michigan Avenue Ypsilanti MI 48197 7344859400

boa acom

Ellsworth Rd amp Airport Blvd

801 West Ellsworth Road Ann Arbor MI 48108 7346698900

Plymouth

1333 West Ann Arbor Road

Plymouth MI 48170 734455 1 5 1 1

Stadium Blvd amp Liberty St

2204 West Stadium Boulevard Ann Arbor MI 48103 734822 1 900

Traver Village Shopping Center

2601 Plymouth Road

Ann Arbor MI 48105 7346623800

EQUAl HOUSIMG LENDER

our Trust and Investment Management Group Were confident that the long-term result will justify the

temporary inconvenience

As we set our sights on achieving a sixth consecutive year of record-level performance in 2015 we have

several other challenges facing ua

Continued low interest rates will negatively impact our net interest margin which was 27 basis points less in

2014 than the prior year Jn response to the lower margin we grew the bank grew earning assets generated

higher levels of lee income held operating expense growth to 2 and posted a lower loan-loss provision Until

rates begin to increase we will continue to do more of the same

Our lndubulltry remains under significant regulatory pressure Like most other banks we added staff lo satisfy

the Increased level of new regulations The additions In our compliance area put us in a good position to

continue to grow the bank and sotisfy the expeclations of regulators We will remain ever-vigilant of any new

challenges in the compliance and regulatory areas

We face these and any other challenges though from a position of strength

For example our credit quality remains very strong significantly outperforming industry trends Our

monthly provision for loan loss should remain at historically low levels for 2015 We will continue to closely

manage our loan portfolio to maintain our credl quality metrics which compares favorably to the highest

performing banks across the country

The projected loan and equipment financel1ease growth trust Income growth and morlgage and loon fee

income should allow for sufficient increases in revenue to bcost earnings in 2015

Opera ling expense management hos also been and will continue to be a primary area of focus

Our goal remains Grow revenue and minimize expense growth With an efficiency ratio of 56 we need only

$056 in expenses to generate $1 in revenue Our ratio like so many other metrics compares very favorably to our peer group of banks at approximately 68 and to all Michigan banks at 76

We extend a sincere and heartfelt thank you lo everyone who helps Bank of Ann Arbor succeed on a

dayto-day basis our employees directors shareholders clients and the community We look forward to

overcoming the challenges we face-and enjoying our successes-together in 2015

Timolhy G Marshall William C Martin

President amp CEO Chairman of the Board

ASSETS

CONSOUDATED BALANCE SHEETS

DECEMBER 31 2014 AND 2013

Cash and due from financial lnsli1utions

Interest-bearing balances in banks

Cash and cash equivalenls

Securities available-for-sale

Loans held for sale

Loans excluding covered loans net

Covered loons

Total loons

Federal Home Loan Bank stock al cost

Premises and equipment net

Cash surrender value of life insurance

Other real estate owned FDIC indemnification asset

Accrued interest receivable and other assets

UABILITIES AND SHAREHOLDERS EQUITY

Deposits

Noninterest-bearing

Interest-bearing

Total deposits

Other lxgtrrowings

Federal Home Loan Bank advances

Repurchase agreements Accrued expense and other liabUilles

Subordlnated debentures

Total liabilities

Shareholders equity Common stoclc no par value 2000000 shares authorized 887584 and

876396 shares issued and outstanding al December 31 2014 and 2013

Retained earnings

Accumulated other comprehensive income(lossl

Total shareholders equity

All dollar amounts in lhousands except por shoro data Unaudltad

2014

14329

183491

197820

146458

2476

667540

16417

683957

2548 12770

14311

521

153

13405

$ 1074419

s 262306

673343

935649

439

892

44744

11531

5 155

998410

4613

69736 l660

76009

$ 1074419

2013

15174

148563

163737

155015

1355

584760

21413

606173

2634 12277

12686

1546

1978

10610

968011

242975

603657

846632

881

1053

42333

8843

5155

904897

4966

58976

(8281

63 114

9680ll

Interest income

Loons including fees

Securllies

Taxable

Tax exempt Federal funds sold and other

Interest expense Deposits

CONSOLIDATED STATEMENTS OF INCOME

YEARS ENDED DECEMBER 31 2014 AND 2013

Federal Home Loan Bonk advances

Subordnaed debentures

Other borrowings

Repurchase ogreemcmts

Net interest income

Provision for loan losses

Net interest income alter provision for loan lasses

Nanineresl income

Service charges on deposit accounts

Income from fiduciary acliviles

Net gains on sales of loans Net gains on sales of securllles

Gain (ass) on sales of OREO

Other

Noninteresl expense

Salaries and employee benefits

Occupancy and equipment

Marke ling and business promoUon

FDIC expense

Provision for loan repurchase loblllty Other

Income beore income taxes

Income tax emense

Ne income

Basic earnings per share

Dlluted earnings per shore

All dollaromounlll In lhausands excap per share data Unaudited

2014

33979

l431

2081 352

37843

l521

24 172

42 149

1908

35935

l 587

34348

425

4259

l404

14

363

2291

8756

17598

2869

l156

510

5056

27 189

15915

4278

l l637

1317

1275

2013

32327

l430

2230

265 36252

l633 28

174

77

104

2016

34236

2 495

31741

441

3891

1427

27

534

1581

7901

16861

2282

1170

504

750

5061

26628

13014

3340

9674

1093

1036

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

YEARS ENDED DECEMBER 31 2014 AND 2013

Net income

Other comprehensive income

Unrealized gainslosses on securities

Unrealized holding goln(loss) arising during the period Reclassification adjustment for losses (gains) included

In net Income

Tax effect

Net of tax

Comprehensive Income

All dollar amounts In thousands except per share data Unaudited

2014

11637

3782

(14) 0280)

2488

14125

2013

9674

5845)

27) l996

(3876)

5798

bullbull

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY

YEARS ENDED DECEMBER 31 2014 AND 2013

Balance January l 2013

Net income

Other comprehensive Income (loss)

Deferred shares plan

Exercise of stock options (29028 shares)

Repurchase ol 40816 shares of common sleek

Issuance of common stock

(400 shares)

Stock based compensation expense

Balance December 31 2013

Net Income

Other comprehensive Income (Joss)

Deferred shores plan

Exercise of stock options (56 176 shares)

Repurchase of 44988 shores of common stock

Stock based compensallon expense

Cash Dlvidand ($100 per shore)

Balance December 31 2014

Common Stock

6410

30

1022

(969)

28

445

4966

32

3118

(4039)

536

4613

All dolar amounts In thousands except per shore data Unaudited

Retained Earnings

$ 49302

9674

58976

11637

1877)

$ 69736

Accumulated Other

Compiehensive Income (Loss)

$ 3048

(3876)

(828)

2488

1660

Tola Shamholderf

Equity

$ 58760

9674

(3876)

30

1022

(2969)

28

445

63114

11637

2488

32

3118

(4039)

536

(877)

$ 76009

SUMMARY Of SIGNIFICANT ACCOUNTING POLICIES

Nahnn gl Oogralppbull qnd Prlndplu gl ConsoldgtgP The consoUdoted flnoncial statements Include Arbor Bancorp Inc and Ila wholly owned suhstdkuy Banko AnnAtbor (Bank) logether referred lo os lhe Cotporallon On fanuaty l 2013 the Corporotion through a newly established Bank substdlmy Banko Ann Arbor leasing (leoslng Company) acqutedall oI the slock of the Ervin leasing Company an Ann Atbor Michigan based leasing company which provides business equipment dl1eci fioanclng leases lo companos ocross Iha United Slalos lnlorcompany tronsacllons and baamcs aro olinunolod In consoldollon

As of July I 2014 Ervin Leasing Companyienamed and rebronded to Unifi Equipment Finance

The Bank provides financial services through Its oUicas In Washtenaw and Wayne counties Its prlmorydepostt products ore checkinQ savings and lcrm certillcate accounts and Its primary lending prolucts ate residential mortgage commefCiaL and Installment loans Substantially all loons ore secured by specillc Items of collateral Including business assets consumer assets and oomrrercial and resldentol real estate Commercial loons ore expected lo be repaid from cash low from opemttons of businesses Other financial instruments which polentiolly represent concentroUons 0pound credit risk include deposit o=unts in other financial lnsUluUons and odoml funds sold

Subuquinl EycntrThe Corporation hos evaluated subsequen events for 1ecognltlon and dlsdosu10 through februory JO 2015 which Is the dote the flnonciol statements were available to be Issued

U1c o Es ti mg trbull Th prcpom linonciol stolamons m conlormlty wilh accounting prlnclplas ganorally occcplod in I ho United Solos of Amedeo management makes eatlmoes and ossumplons hosed on avoloble Information These estimates and ossumptlons ofect Iha amounts reporled In the financial sotemenls and the dsdosutes provided and future results cculd dlller The ollowame or loon losses the reserve for repurchase of sold loons the carrying amount cl the FDIC Indemnillootlon Asset lease resduol values and the folr values cl ftnandal Instruments ore particularly subject to change

Cash and cash equlvalenls includes cash deposits with other llnonciol lnsUtuUons under 90duys sho1Menn Investments and federal funds sold Net cash flows are reporled lor CUstomer loon and deposit transactions federal funds purchased and repurchase og1ccmonts

lncrnslmiddotBcmlng Dcposlts In Banhbull nterast beating deposits In bonis mature wllhn one year and ore co riled al cost The balance outstanding at year end 2014 and 2013 was held al the Federol Reserve Bank

Debt socuntics oro closslliod os ovolloblo lor solo when hoy mighl bo sold bororn mofurlly Securiliesovoilablo for sale ore corrled at fair value with umeatlzed holding gains and losses reported In other comprehensive Income net o( Ox Interest Income includes amortlzatlon of purchase premium or discount Gains and losses on soles are based on the amortized cost o the socurlly sold

Interest Income ndudes omo1ttzallon of purchuse p1emum or discount Premiums and discounts on oocurlles ate omorllred on Um levelmiddotyield method wlhoul nnticlpotng prepayments axceptfa1 mortgage backed secu1llles whettt ptepaymenlll are antlclpaed Goins and losses on soles ore recorded on the trade dote and determined using the spellc denlillcotlon mehocl

Management evoluoles sacurltles for olher-thonmiddotemporory lmpalrmen (QTnl on at least a quarte1ly basis and more frequently when economic or market condUons wormnt such on evaluation For securlties In an unrealized loss posltlon monagemenl considers the exenl and duration of the unreolzad loss and the llnonclal condUan and neormiddotlerm prospects of lhe Issuer ondolso assesses whelher ll Inlands lo sell or II ls more lkely lhan not thal II wlll be required lo selL a security In on unrealized OS11 poslllon before recovery of Its amortized cost basis li either of the crllerla regarding Intent or requirement to sell is met the en Ute difference between amortized cost and fair value Is recognized as lmpannent through earnings for debt securities hot do not meal the olmemenloned ctl1eria lhe amount of Impairment is split Into two components as follows ll orn ieloted lo credit Joss which mu11t be 1ecognlzed In the lncome 11tatement and 2) olhermiddotlhonmiddotlemporory Impairment (0111) related lo other faclors which ls recognlmd In other comprehensive Income The credit loss ls defined as the d1flerence between the presenl value of the cash flows expected to btt collected and the amottlied cart ba11is For equity aecudtes thu en Ure amount ol mpolnmm ls 11lCOQnlzed through earnings

fcdpral Homo Ipgp Bgpk FHI HI Stock- Tho Bank is a mamhorol lhafHtB sflilom Mambors ara roqurod oowna ca1tnlnamount of stock based on the level of borrowings and other faclors and may Invest ln oddlionol amounts FHLB stock ls cotrled at cost dossifted os o restrlcied security and perloclcoly evaluated hr Impairment based on ulllmoe ecoveryof par value Both cash and stock dividends ore 1epotled 01 Income

LoaruHildJiuSttlc Loons orlglnoled and lnlended or sale Jn the secondary morhl are corrled al Iha lower of cos or poundair value In the aggregate os determined by outslondlng commlments from Investors Net unreolzed losses ii ony ore recorded as o valuation ollowanoe and charged lo earnings Loons are sold with servicing released Buyeni do not hove recourse against Iha CorporoHon for subsequent loon OSlell However incerton sluoUons the buyer con require the Corporotlon to rnputchose loons

Loww Loons liiat monagemen has the In I en and abllty lo hold for tha loreseuabla future or unUI maturity or poyul are 1epo11ed at the principal balonett outstanding net o pure ho premiums and discounts and on allowance for loon losses In1e1est Income is roporlarl on tho tnterosl method and lndudas omotllrotion c[ not daforrcd loon foos and costa ovor tho kxm totm lnlerost incomo

All dolloramounll In lhousonds except per shore do lo Unaudled

SUMMARY OF SIGNIFICANT ACCOUNTING POLICJES Continued)

on all loans Is generally dllconUnued al the Ume the loan Is 90 days delinquent unless the credit Is well-secuted and Jn process ofcallecUon In all cases loans ore placed on nonaccrualor charged-oil at an oorUer dole JI collection ol prtncpa] or lnleresl Is considered doubtful All Inlet est occrued but no received for loans placed on nonoccruol Is reversed against Interns Income Inleresl received on such Joans ls occounled for on lhe ooshmiddotbosls or cos recovery melhod unlll qualllylng for return lo accrual

Loons ore rel urned to 0ccruol salus when oll lhe p1lnctpal ond interest amounts conlracluollydue me brought current and [ulure payments ore reasonably assured

Cpyornd Ipgnsbull Loans acquired in 2010 In a Federal Deposit Insurance Corporation (FD)C)-asslsted transaction are oovered under a loss sharing agreembullmtandore refoned lo as middotcovered loansmiddot Pursuant lo lhti trms or thti loss shoring agreem1mts covtired loons are subacl lo a stated loss threshold whereby Iha FDIC will reimburse the Corporaton [or BO of IOSStls incuned The Corporation will 1eimbursa he FDIC for Its share of recoverlm with respect lo losses poundor which the FDIC paid the Corporalon a mlmbmoomont undor tho loss sharing og1oomont Tho FDICs obllgolon to rolmhurso tho Cotpotc1lion for ]()SS()S with raspcct lo covered loon begins with the first dollar of loss incurred

Coveted loons warn recorded at far value al the time of acquston Fair values for covered loons are hosed on a dscounted cash flow methodology lhotconsdered various actors Including the type of loonond related collalerol dossflcatlon status fixed or votiobla inleresl role tlm10I loan and whehtir or nol lhe loan was omorlirlng and o discoun ralti reltJClin11 the Corporolionmiddots osoossmont of risk inhomnl in tho cosh llow cslmoos Covorcd loons woro gruupod tcuolhcr according to smilor choroccrisUcs

ond were treated in the aggregate when opplylng various voluaon technlques

AIJlurchose certain covered loons had evidence of credlt deterioration since orlgnolion These loons ore accounted lor lndMdually The Corporation estimates lhe amount and timing of expected cash flows for each purchased loan and the expected cash flows in excess olomount pold Is recorded as Interest Income over the remaining life of he loon or pool (occretable yield) The excess of the loons or pools contractual principal and Interest over expected cash Hows Is not recorded (nonocc1etoble dllerence) Over the life ol the loon or pool expected cash flows continue lo be estimated II he present volue oI expected cash flows is less than the carrying amount o loss is recorded ff the presen volue of expected co sh Hows Is greater lhon the carrying amount It ls rocognlzed as port o future Interest Income

Dire cl Dnqnclng klse Rrcynhln11middot The results of the Corpotolons equipment loosing acUvUes are recorded within loons on the consolidaled balance shtiel niese direct lino11cing leases provide for lull recovery ol the equipmenl cost over lhe lenn al the lease

The CorporaHons nal Investment in direct Hnanclal leases lscomptlood of lhe lollowtng elements minimum lease payments receivable the esllmated unguaranleed residual value ol the leased equipment at the lease lermnalon dates and unamortized lntiol dlrect costs less unearned Income Estimated guaranteed residual values are revlewed perodicolly to determine [ the cunent ttsthnalc of the equipments fotr value appears to be below Us recorded estlmue If rred )esldual vululS urn adjusted down word lo reflect adjusted estimates of fair market values Upward adjustments lo residual values me nol permitted

Unoomod lncomo fa tho amount bywhlch ho mlnmum caoo paymonts rccclvnblo plus tho osUmotcd unguarantood rosdual valua exceeds the cost of the leased equlpmanlo the inception of lhe lease Uneomed Income ts amortized aver the Initial lease term lo p1oduce a constant rote ol teum on Iha net Investment In lhe lease lnllol direct costs ol ocqultlng a lease are coptallzed when incurred and amortkedover the Ille of the lease consistent with the method used lo recognize Interest Income

The Corporallon evoluotes lhe colectablllly o[ Is leose receivables hosed upon carloln foclors such as hsforlcol colteclon I rends and aging categories Leose receivables ore wrUen of against the allowance or loan losses when the receivable Is determined to be uncollectlbe

AllniulllllU The allovance or loan losses ls a valuaton ollowonce or probable Incurred credit losses Increased by the provislon lor loon losses and decreased by charge ols less rncovetlttS Munogemcnt estltnates the ulowonce bulome requited using past loon loss experience the nature and volume of the portfolio Information aboul specific borrower sluatlons and estimated collateral values economiccondltions and other factors Allocatons o the allowance may be made for specific loons bul ho onllro alowonco Ill ovoilobla or any loan hot Jn monogomonfs judgment should be charged off Loan losses aro charged against the allowance when management believes the uncollectlbllty of a loon balance Is confirmed

The allowance consists al specific and general components The specific oomponent relates lo loons hot ore Individually clossifed os lmpJlred or loans otherwise closslfledos substandard or doubtful The generalcomporenl covers rcgtn dassilled loons and Is based on hlslorleol loss experience odusled for current Iocors

A loon Is lmpored when full payment under he loon terms Is no expected Nonbullhomogeneous loan classes such as commercial and commercial real estate loons and homogeneous loan segments such as mortgage and consumer loons modified as troubled debt restructu1lngs or loons ossocloled with non-homogtineous relationships are lndivkluolly evolualed for lmpomamt 1pound a

loon Is Im poi red o portion of the ullowonce Is allocated so hot Iha loon Is tepo1led net at the p1eoont volue o estimated futurn cash flows using the loans exlstlnQ role orot the fair value ocolloterol ii repay men ls expected solely from the collo1eral Lorge

All dollar amounts In thousands except per shore do1o Unaudited

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

groups of smoler balance homogeneous loons such as consumer and residential real es tale loons are collectively evaluated for impalnoont and accorrlngly they are rot sepomtely identified for lmponnenl disclosures Loans for which the terms have been modiled resulting In o concession and for whch the borrower s experiencing flnorcial difficulties are considmed troubled debt resructurtngs and classified os Impaired

Factors consdurod by manogomonl In dolor mining lmpnlrmont lncluda payment status collatora value and tho prohohUty of collecting scheduled principal ond Interest payments when due Uxlns hat experience lnslgnllloont payment delays and payment shortolls generoly are not clossled as impaired Management determines the significance o payment delays and payment shortfalls on a case-by-case basis toking lnlo consideration all of the cl1cumstancas surrounding the loon and the borrower Including Iha length of the delay the reasons for the delay the borrowers prior payment record and the amount al the shottfoll In re lo lion to lhe prlnclpo ond lnleresl owed

Troubled debt restructurlngs me sepmotely Identified poundor lmpormen disclosures and ore measured at the preoon volue ol estmoed future cash flows using the loons effective rote at Inception lpound a troubled debt restructuring Is considered to be a collateral dependent loan the loon ls reported net o the oir value of the collateral For lroubleddebt restructurlngs that subsequently default thti Corporcton dete1mh1cs the amount a( reserve In occordancu wilh the accounting pollcy for the ollowonce for loon losses

Tho gonorril componontcovots non lmpahcd l=ns ond la hosed rm hsloricol loss oxporlanco adjuod for currant factors Tho hlstorlcol loss experience is de1ermlned by portfolio segment and Is hosed on the actual loss history experienced by the Co1po1alon over the most recent five years For all segments he actual loss experience Is supplemented wlthother economic facto is hosed on the risks present for each porIollo segment These economic foclots Include consideration of the folio wing levels of and trends In delinquances ond lmpored loons levels or and trends In charge-offs and recoveries trends ln volume and terms of loons effects ol any changes In risk selecon and underwrllng slondords olher changes in lending pollces proeedures ond praclkes eperienca oblty ond depth of lending managemonland other relevant staff national and loco economic trends and conditions industry conditions ond efects ol changes In credl ooncanrolions The following portfolio SPgments have been Identified

Comrnerdol - Loons to businesses hat Ole sole proprietorships partnerships limited liobllty companies and corporations These loons ore for commercial Industrial or p1ofessionul purposes The riskcharactctlstics of these loons vory based on the borrowersmiddot business and industry as repoyrent is typically dependent on cash flows gene ruled from the underlying business Within this loon segment the Corporation has identified loon classes of commercial and industrial commercial realestole and commerca kmd devolopmant

Real Estate - Loons to purchase or rellnance single omlly residences The risksassocated vi th this oogmenl ore generally dependent on the ovomU real estate volue environment and Individual payment oblgalons Real estate Is subject to changes In market valuation and can be unsloble fora variety of reasons Within this segment the Corporation hos idenUIJed classes of resldenllol ond home equly loons

Consumer-Term loans or lines olcredlt for the purchase ol consumer goods vehicles or home Improvement The risk characteristics of the loom1 In I his segment vary depending on the type of colateml but generally repayment Is expected from a customerconlnuinQ to generate o cash How I hot supports the calculoted poymentobllgaton Secondary support could involve llqudution o tOlulerol

Loosos-Dirtel Flnanca equipment loaoos Rislchamctoristcs vary hosed horn tho borrowers busnoss and lnduatty as tepaymenl Is typcallydependent upon cash Hows generated ram the bonowers operations Secondary support could Involve repossessing the lensed colloleral

FDIC lndomnjficu The FDIC lndemnlilcoUonosset results from the loss share aQreements In the FDCltzsslsted transocllon The ossel ls measured seporalely from Iha reloed covered osses as they are nol conlroctually embedded 1n lhe assets and ore no transferable wllh the asses should lhe Corpora Hon choose lo dispose of them and represenl the acqulslllon date fair value al expected reimbursements from the FDIC Puisuont lo the arms al the loss sharing ag1eemenl cove rad loons ore subject to a stated loss threshold whereby the FDIC will reimburse the Corporation for 80 of losses Incurred These expected reimbursements do not Include roimburroblo amounts related to future covered expendlures These oosh flows ore discounted to reflect a metric of uncertontyofthe Urning and receipt of the loss shoring reimbursement from the FDIC This asset decreases when losoos aie realized and clohns me submUled lo the FDIC or when customern repay their loons In full and expticOO l=cs do not occur This ossel also Increases when esllma1ed future lossea Increase and decreo6e3 when esttno1ed future losses dec1ease When ostlmotod futuro loon losses lncrcaoo ho Corpomton rccorrls a provision for loon lossos ond lncrcasos Its allowonco for loon lOS009 occordngly The resulting increase In the FDIC lndemnlfcollon ossel Is recorded os on offset to the provision for loon losses During 2Dl4 and 2013 lhe provision for loon losses was offset by S320and Sl266 teloed lo Increases In lhe FDIC lndemnIlcotion asset

All dollar amounts in thousands except per share data Unaudited

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Continued)

otbtH Reg y1qt1 Own ad OREOJmiddot Assets acquired through er IIllltead cf loan forocloouro ore inltlally recorded ot loir value less costs to mill whim ocqulredestabllshlngo llew cost lxms These assets are eubsequentlyoccounted for at lower cl cost or fair value )ass eitlmuled costs to sell 1pound fair value declines subsequent to lo1lltlosurn u valuation allowance is rncorded through expense Oparntna cosLI nfo1 ocqulslUonara expansed

OREO acquled by the Corporation lhtough loon defaults by customers oncove1ed loons or acquired by the Corpomllon as pail oI Its acquisition of New Uherty Banklsoo Note 2 Business Comblnotlonsl me covered under the loss shoring agreement discussed above Pursuant to the etms of the = shodng ag1aemen coveted assets ore subject lo a s lo led loss threshold whereby the FDIC will reimburse the Corporation or 60 of losses Incurred Any gains or losses realized at the time of disposal oro portlolly offset by tho FDIC toss shore and oro roloctcd In Income Al year-end 2JM ond 2013 SO omi$155 ol lha Gorporalions OREO wos subject lo the loss shoring agreement

qulpminl god 1ltauhold lmnroyemenlgbull Lond Is corrled at cosL Premises and equipment ore stoled ot cost less accumulated depreciation generally com puled on the straghtmiddotlne basis over the assets useful llves and over the terms of the lease or the esthnotm useful llves lor leasehold Improvements whichever is shortur

Qmb Surrnndqr Yaluo al J lfo Jnsumncebull ThoC01pornlon hos punhaood Hfohmurnnco pollclas on 001lain key oxccutivos Cash summdor voluo ol lfo Jnsuroncc Is 1ocordrnl ol lho amount thot can ba 1callzod under tho nsuronco controctot tho balonco sheet dole which Is the cash surrender value adjusted for other charges or other amounts due tho tore probable otseltlemenl

lampna-Term Assa1bull Premises and equpmen olher lnlongble assets and other long-term assets 01e rnvewed for Impairment when events indicate heir carrying amount may not be recoverable from future undisccunted cash flows If lmpolred the assets are recorded a fair value

Bepurchgee Agrccmgnj11bull SubsanlolyaI repurchase ng1eement UobiHUos represent amounts advanced by various customers These balances ore not deposits and ore no covered by Jederal deposit lnsuronce SecurUes ore pledged to cover theiie lablllles

Jrcrmfers gl Fingncgl AsGesbull Ifonsfers of financial osselsare accounted for as soles when control over the assets hos been rellnquisbed Control aver transferred ossels Is deerned lo be surrendered when the assets have been isolated from the Corpomlion tho tronsforco ahtolns tho dght U1no of conditions that constmln II Imm taling ad van logo of that right to pledge or cxchango tho tronsforrod assets end tho Corpo1otlon dOCll not maintain cifoctlvc control over tho hansfoncd assets hrough an agreement to repurchase them before their maturity

smck_Enenutllm Compensotlon cost is recognized for stock options and restricted stockawords issued lo employees bosed on the fair value o[ lhese awards at Iha dote 0pound gronL A BlackmiddotScboles model Is ullllzed fo eslmale the folr value cl sled opHons

GompensoUon cost ls recognized over the required service period generally defined as Iha vesting pedod For awards wllh graded veslng compensation cost is rncognlzad on o sralghlmiddotline bosls over the requisite service period for the en Ure award

lncomo TggeBbull Income twc expense fa the total of he current year income tax due or refundable and the chonge In deferwd tux 0sets andlobillties Ikfened toxossels and lobiUlei me he expected future ax amounts poundor the tempomry dUferences btitween cnnying amounts and tax hoses al ossots and lobilltles computed using onoctod lox mos A valuation allowanco IE ncodcd reduces delened tax assets to Iha amount expected o he realized

A tax position is recognized as a benefit only Ell ls more likely than not tho the tax position would be sustained In a lox exominolcn with o tax exomlnatlon beng presumed to occur The amount recognized is the largest amount of tax benellt tho Is grealer than 50 lilelyol being realized on exomnoUon For tax posllions no meellng he Mmore likely hon natM lest no lox benelll Is recorded

The Corpototon recognizes lnterestondor penalties related lo Income tax matters In Income tax expense

QfBglgpcemiddotShMI Ejpgpclgl Jostrumentw Financtol Instruments include off balance-sheet credit Instruments such us

commitments to make loons and stondby lettets cf credl Issued to meet customer Ilnomlng needs The face omoun for these items represents lhe exposure to loss before conslderlng customer collolerolcr oblllty lo repoy Such Iinoncol Instruments ore recorded whon they mo funded

Earnings Per Shattbull Bosc earnings per shorn ls net Income divided by lhe weighted overage number of common shores outslondlngdudng the pedod Diluted earnings per shore Include lhe dilutive effect cf oddltonol potential common shares tssuoble under equity hosed plans

All dollor amounts In thousands excepl per shore data Unaudited

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Conlinucdl

CQw1UUicnelyc Ineqmobull Comprehensive Income conslslll o[ net income and other comprehensivu Income Other comprehensive income ndudus unrealized gains and losses on suurlU avalablu or salu which ore also recognized as separate components ol equly

Lon Cantlngcociosbull Loss contingencies Including claims and Iago ocilons otlsng Jn the ordinary courso of husnass om rocordcd as llobllUes when the likelihood o loss is probable and on amount or long a cf loss con be reasonably estimated Management does not believe there now are such molters that will hove a material elfect on the fnonclol solements

Re1rclpps on Cruhl Cosh on hand or on deposit wllh he Federal Reserve Bonk cf Sl521 and $1312 was required to meal regulatory reserve end clearing requlrnmenls al year end 014 and 2013

fair Yalur cf Engncgl ipdltumenll Fair values o[ llnoncol Instruments ore estimated using relevant market lnFormoion and other assumptions as more fully disclosed In a sepuae note Fair value estimates Involve uncertain Iles orcl matters of sgnlllcont judgment regarding inerest rotes credit risk prepayments and other loctors especiolly ln he absence of brood rno1kets or particular Uems Changes In ossumptlons or In market conditions could sgnillcantly olecl the estimates

Diyjdnnd Bosricljanbull Banking toguotions require molnlainlngcolaln cnpla lovos and nay mil tho dvldonds paid by tho honk to tho holding company or by Iha hodina com pony ta rhmoholdnrs

Reclnsaificalionsbull Some Items In the prior year financial statements were reclassifed to conform lo he current presentation Reclassillcaons had no efec on prior year net Income or shareholdersmiddot equity

ampl9plion gl Nuw Aecgunlng Sgpdgrdsbull In Februory 20[3 lhe FASBomended exlsllng guidance reloled lo reporlng amounts rcclossUiOO out ol accumulated othorcomprohonsivo income Thoso amondmonts do not change tho current rcquiromons or reporting net Income or other comprehensive income In flnonclol statements These amendments require an entity lo provide lnformatlon about the amounts reclassified out of accumuloled olhercomprehenstve Income by componenL In addltlon on entty Is required to present eilher on the loce of the state men where net Income Is presented or In the notes signifconl amounts reclassified cul ol accumulated other comptebensve Income by the respective line Items of nel Income bu only j[ lhe amounl reclassified 1s required under US GAAP to be reclasslfied to ne Income In its entirety in the soma reporting pedod For other amounts that ore not requited under US GAAP to be redassfied In their entirety lo net Income on enlty Is required to crossmiddot mforonoo lo other dlsolosutcs roqutcd under US GAAP that provide addtonal dctals oboul thoso amounts These omondmcnts ore elfeclve prospectively for fiscal yeats and lntedm periods within those years beginning alter December 15 2013 Early adoption Is parmltled The elfecl ol adcptlng his sondard dd no hove a moterlal eleltt on the Corporatons opeioUng results or llnanclal condition

In Decombar 2013 lhu FASB omandcd ho Glossary of lhu Codilicotlon lo include a slnulu dollniton of o public buslnossantly for future uso in US GAAP Tho doFloUon ol a public business enlily will ho used in considodng tho scope of now finonciol gudonco and will identify whether lhe guidance does or does not apply to public business entitles The amendment does not allectexistlng lequ1ements and there Is no elfectlve date The adoption ol lhs sondo1d dld not hove a material effect on the CompanyS operotng rosuls or llnondol condition

lnJonuory2014 the FASB amended existing guidance lo dailfy when a creditor should be conside1ed lo hove tecelved phrJcal possession of rnsidonlol tool oatolo propaty collotomldng o crmsumcr mmtgogo loan such that tho loon should ho dcrccognlzod and tho 1001 estate rccognzcd Thcso amendments dorify that an in substance repossession or foreclosuro occurs end a creditor s considered to have received physcol possession of resldentol reol estate property coloterolldng a consumer morlgoge loon upon ether 11) the credlor oblonlng legal title to the residentlol 1eol estate properly upon completion of a foreclosure or (2) the borrower conveying oil lnlarest In the resldentol real eslae property lo tha credtor to sotsfy that loon through completion of a deed Jn lieu cf foreclosure or through o similar legal ogreemanl Addillonol disclosures ore required These amendmenls ore eHecllve for publc business enUles for annual perJods end Interim periods within those annual parcxls begtnnlngafler December 15 2014 Amendments In th ls stondord con be applied using a modified retrospecUva or prospective transition methcxI Early adoption ls permlted The adoption ol this standard ts not expected to hove a maedol effect on the Componys operating results or llnonciol condtlon

In Moy2014 the FASS amendOO existing guidance realOO la revenue from con1mcis with custame1s 111sumendment supersedes end replaces nearly all existing revenue recognition guidance Including lnduslrymiddotspeclflc gudonco establishes a new conltolshybosod ovonuo mccgnllon modal changos the basis for deciding whon rovonuo is rcccgnizod ovor limo er at a poln In Hrno provides new and more detailed guidance on speclflo epics and expmdsand Improves disclosures about 1evenue In oddllion his amendment specfes lhe accounting for some costs to obtain or fulfll a contract with a customer These omendmenls ore elfectlva for annual IeportJng periods beginning ofter December 15 2016 lncludng Interim periods within that reporting per Joel Early oppllcolonls net permitted The amendments should be applied retrospectively 1o all periods presented or retrospectively wllh lhe cumulaHve effect recognized ol lhe dole o[ lnllol oppllcotlon The Company Is currenlly evoluollng tho Im po cl of his new occaunUng standard on Iha consolidated financial solornonts

All dollar omounts In thousands except per shore data Unoudtted

Ervin Leasing Business Combination

On January l 2013 the Corporotonacquhed 100 of the outstanding common shares of Ervin Leosng Corporation In exchange for cash lo toling $4622 Under the erms of he acqulsltlon oll common shareholders rncelvtgtd cash equal ta tatul equity o Ervin Leoslng as of December31 2012 plus $600 Ervin Leosing Company results of operotlons ware Included In the Corpomlans rnsults bognnlng Janumy l 2013 As al July l 2014 Ervin Locmng Company ronamcd and rabmndod to Unifi Equlpmon Flnanco

The following able summarizes the consdetollon paid for Ervin Leosng Company ond Iha omounts ol lhe assets ocqulrnd and llobUias ossumad recognized al he ocqusUon dote

Consderalon Cabullh

For Value of Total Conslderollon Transferred

Recognized amounts of Identifiable assets acgulred and Uabllites assumed

Gosh and cash equivalents Direct llnoncng leases Noncompeta agreement Dlharossels

Tola assets a ired

Notes payoble Other labHUes

Totol lobllltcs assumed

Total idenlfloble net assets

4622 4622

366 11304

100 l098

12BSB

7514

732 8246

4622

No goodwill or olher lnlanglble ossels beyond lhe noncompale agreement above warn generoled as par of lhe Ervin Leosing business combinotlon

New Llbe1ty Business Combnaton

On May 14 2010 the Corporation enterecl into a purchaie nnd ossutnpton agreement (Naw Llbetty Agreement) with the Federal Deposit lnsuranco Corpomlion FDIC) as rncclvor purs1mnl to which tho Corpomton mqulrcd cctlan asts ondassumcd subslontaJy oll o[ the deposits and cetlan lobUtias of New Llbarty Bon(Naw Liberty) New Liberty ope roted one bonklngcanar In Plymouth Michigan

In connecton with the New Liberty ocquslon the Corporaton entered lnlo a loss shoring ograamenlwlth the FDIC that covers mos of New Llbarlys ossels hosed upon the sellers records Including single family resldental marlgoge loons commerciol rool es1ate and commercial and ndustriol loons and OREO (collectvely covered assets) The loss shoring agreements are subject lo certan servicing procedures as sped fled in agreements wllh the FDIC The loss shoring agreements opplicable to sngle family residential morigoge loons provide for FDIC loss sharing ond Corporation reimbursement to tho FDIC for ten years The Joss sharing agreemens oppllcoble to all other covered assets provide for FDIC loss shoring for llva years and Corporation ralmbursomonl of recove1les lo he FDIC far elght yeurs The eXpgtcted Jembursements under the loss sharing ug1eements were recorded us an lndemniUcoHonosset al an esHmated fair value of $15949 on the acqutsiliondote whch represented the present volue oI the oxpoctcd nelcnsh rohnbursomon rolalod lo tho lolS shoring ogmomonls

The CorpotoHon acquired cetlan olhar New Llbarty assets nolcova1ed by Iha loss shoring ogreemenl wlh Iha FDC includlng =sh and secutlles purchased ot lalrvolue At acqusUon lnogg1egole loons ocquled hod on unpaid principal balance oS9mand a lar volue o$69JXl9 and deposits assumed hod o bolo nee of $90l 17

Alldolloramounta In lhousands except par share dala Unaudled

ADDITIONAL INFORMATION

We hove Included ltnonciol inlormotion for Iha yaarendftd Decamber31 2014 Our full ftnancol statements Including noes wem audited by Crowe Horwath our independent publkaccountont ond Crowe Horwath goveon unquallfled oplnon The compeo audited flnondol stataments Including the oudUors opnlon and notes ore avoloble upon request

11 you would lile o copy of the audled financial stolemenls or If you have any quesUons concerning the annual meeting pease con la ct your bank pmsdonl TI mo thy G Marshall at 125 South Filth Avonuo PO Box 8009 Ann Arbor Michigan 4BID7

All dollar omounts In thousands except par share data Unaudited

Officers

Executive Management

Timothy G MarshoJI Presidentamp Chief Execulive Ofllcer

Charles E Crone fr Execullve Vice President amp Chief Revenue Officer

Pall H Jud11on ExecuUve Vice Presfdenl amp Chfef Opera Ung Officer

Lyle r Dahlberg First Vice President Trust amp Invesmenl Group Manarier

Cynlha Livesay Firs Vice Presidenl Credi Administration

Mark J Slade First Vice Presfdenl amp Chief Financial Ofllcer

Mortgage Retail amp Privatbull Banking Services

Patrlck A Tamblyn Senior Vice President Private Banking Manager

Klrsly E Haholan Vice Presldenl amp Mortgage De[Xlrlmenf Manager

Amnndo M Harl Vice Presden Administration amp Opemtfons

Kimberly A Clugston Vice President amp Senior Mortgage Loon Officer

Linda S Brewer Vice President amp Private Banking 0ffcer

Mary Hays Vice Presden Private Bonling Officer

Chmles W CracrcrH Vice President Befall Moitgage Soles Manager

Curl DEnt Vice President amp Morgaga Loan Officer

Christine G Hold Vice Presfdenl Cash Management

Krltlna L Moyer Vice Presden amp Plymoulh Branch Manager

Joan C Hendrlck1 Vice President amp Main Office Brandi Manager

Kevin M Kramer Vice Pzesidenl Pcivale Banking OWrer

Denise J Sialleld Vice Presden amp Marlgage Loon Officer

Dennis D Ticknor Esworh Ofnce Branch Manager amp Health Savings Account Specialist

David K Pote Ypsilanti OfJee Branch Manager

Shelley L Rankin Saline Office Branch Manager

foseph D Croigmile Motlgorc Loon OfJeer

Kevin C Salley Morgage Loan OfJeer

William E Smith fr Mortgage Loan OfJrer

Sondra L Bccver Deposit Operations Offirer

Stoey B fohnson Sr Relolionsl1ip Banking Ollicer

Kimberly K Snow Relalionship Banking amp Cash Management Oflfcer

FinanC9

Lha AMason Vice Presidenl amp Infernal Auditor

Jame$ A Miller Vice President amp Dfreclor Human Resources

Bmbcrro L Morrison VicePresiden

Bella MFemondez Assisan Vira President amp Accounting Oflicer

Trust amp Investment Monagemcnl

Thomas R Kalloword First Vice President amp Senior Trusl Olflror

Stephen J Seymour Senior Vice Presden amp Senior Investment Olflcer

Sonia S Perle Senior Vice Presidenl amp Investment 0[cer

Cothlcon L Savoie Senior Vice Prosldont amp nvestmenl Offrer

Margaret L Vogel Vice President amp Trusl OfJcer

Erin E Archambault Vice President Trust Operations

Eric P Helbm Vice Presidenl amp Director of Business Development

Deborah A Jones Vice President amp Business Developmen Officer

Jacqueline Jenkins Vira Presidenl Portfolio Manager amp Businoss Dovclopmcnl Ollcor

Mllzl J Talon Vice President amp Trust Offlrer

Diano S Winner Vice President amp Investment Officer

Sarah Dobson Campbell TrusOffcer

MarkA Sklfl lnveslmenl Oflicer

Commercial Lending

Walto r G Byes Presden Saline District

Michael L Michon President Plymouth Districl

Michael H Chotos President Ypsilanti Districl

Mlrhuel A Cole Group President Technology Industry Group

Sall sh B Jost Senior Vice President amp Senior Loon Officer

Hons W Maler Senior Vice President SpeclolY Banking

David A Guenther Vice President amp Sonier Loon Officer

Robert R Roiie Vice Prcsldenl amp Senior Loon Ofllcer

Mork D Bally Vice Presldenl amp Commercial LoonOfflrer

Jonathon P Bowdler Vico Prrsidcnl amp Commercial Real Estate Manager

Jomes J Plummer Vice President amp Cormnerciol Loon Olicer

Mork H Holtz VicePresidenl TechnoloQy Industry Group

Information System1

Jeffrey J Stanton Vice Presden I amp ChiefTechnalogyOficer

Marketing

Jonke M Ortbrlng Vice President amp Marketing Department Manager

Cwdil Administration

Dawn M Prescott Senior Vice President amp Managed Assets Offirer

Trina M VonNesl Vice Prellden amp Credi Manager

Stephania N Hnnigan Assistant Vire President Consumer Credll amp Compliance

Soro L Hoffman Assistant Vice President amp Small Business Lending Offirer

Pamela f Wetzel Credi Atlminislrolion Officer

Compliance

Susan E Wcrgnor Vice Presfden Compliance 01icer amp Compliance Department Manager

John E Fosler Vice Presden I BSA OFAC amp Security Olirer

Brion J Powers Asslstanl Vice Piesden BSA amp Security Special isl

Cynthia K Shacllor BSASecurity Admlnlstralve Oficer

Unifi Eq11ipmbullnl Finance

Raymond J Grimshaw President amp Chief Ixcculva Olliccr

Thomaii J Conzolmmm Secretary Treasurer amp Chief Financial Officer

Directors

Thomas P Bo1dere Ptesdenl Midtown Group Inc

Jan L Garfinkle founder amp Manarlng Director Arborelum Ventures

Isadore J King President amp Chief Executive Officer Synergy Partners LLC

Timolhy G Marshcrll President amp Chief Execulfve Olflcet Bank of Ann Arbor

Michael C Martin Vice Presidenl Firs MarUn Corporalon

William C Martin Chairman Athletic Director Emeritus University of Michigan

Erneel G Perich Presden Perich + Partnets Ltd

David R Sams Mcrnaging Partner 360 Advisors LLC

Joseph A Sos Owner Ses Moors Inc

Cynthia H Wilbanks Vice President for Government Relalons University of Micbfgan

Jelfrey S Williams Chairman amp Chief fxeculve Offfcer Tangent Medical Technologies NeuMoDx Molecular Tnc

Directors EmcritU6

Jomes WAndorson Jr President The Anderson Assodoles

Richard P Eldswick Foundfnrr Diteclor Arbor Partners

Jun Barney Newman Vice Presiden Ann Arbor Dlslrfcl Ubrary Bocrrd

Rlchord N Robb DDS Regan Emeritus Eastern Michigan University

Downtown Ann Arbor

125 South Fifth Avenue

Ann Arbor MI 48104 7346621600

Downtown Saline

1 79 East Michigan Avenue

Saline MI 48176 7344705001

Downtown Ypsilanti

7 West Michigan Avenue Ypsilanti MI 48197 7344859400

boa acom

Ellsworth Rd amp Airport Blvd

801 West Ellsworth Road Ann Arbor MI 48108 7346698900

Plymouth

1333 West Ann Arbor Road

Plymouth MI 48170 734455 1 5 1 1

Stadium Blvd amp Liberty St

2204 West Stadium Boulevard Ann Arbor MI 48103 734822 1 900

Traver Village Shopping Center

2601 Plymouth Road

Ann Arbor MI 48105 7346623800

EQUAl HOUSIMG LENDER

Interest income

Loons including fees

Securllies

Taxable

Tax exempt Federal funds sold and other

Interest expense Deposits

CONSOLIDATED STATEMENTS OF INCOME

YEARS ENDED DECEMBER 31 2014 AND 2013

Federal Home Loan Bonk advances

Subordnaed debentures

Other borrowings

Repurchase ogreemcmts

Net interest income

Provision for loan losses

Net interest income alter provision for loan lasses

Nanineresl income

Service charges on deposit accounts

Income from fiduciary acliviles

Net gains on sales of loans Net gains on sales of securllles

Gain (ass) on sales of OREO

Other

Noninteresl expense

Salaries and employee benefits

Occupancy and equipment

Marke ling and business promoUon

FDIC expense

Provision for loan repurchase loblllty Other

Income beore income taxes

Income tax emense

Ne income

Basic earnings per share

Dlluted earnings per shore

All dollaromounlll In lhausands excap per share data Unaudited

2014

33979

l431

2081 352

37843

l521

24 172

42 149

1908

35935

l 587

34348

425

4259

l404

14

363

2291

8756

17598

2869

l156

510

5056

27 189

15915

4278

l l637

1317

1275

2013

32327

l430

2230

265 36252

l633 28

174

77

104

2016

34236

2 495

31741

441

3891

1427

27

534

1581

7901

16861

2282

1170

504

750

5061

26628

13014

3340

9674

1093

1036

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

YEARS ENDED DECEMBER 31 2014 AND 2013

Net income

Other comprehensive income

Unrealized gainslosses on securities

Unrealized holding goln(loss) arising during the period Reclassification adjustment for losses (gains) included

In net Income

Tax effect

Net of tax

Comprehensive Income

All dollar amounts In thousands except per share data Unaudited

2014

11637

3782

(14) 0280)

2488

14125

2013

9674

5845)

27) l996

(3876)

5798

bullbull

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY

YEARS ENDED DECEMBER 31 2014 AND 2013

Balance January l 2013

Net income

Other comprehensive Income (loss)

Deferred shares plan

Exercise of stock options (29028 shares)

Repurchase ol 40816 shares of common sleek

Issuance of common stock

(400 shares)

Stock based compensation expense

Balance December 31 2013

Net Income

Other comprehensive Income (Joss)

Deferred shores plan

Exercise of stock options (56 176 shares)

Repurchase of 44988 shores of common stock

Stock based compensallon expense

Cash Dlvidand ($100 per shore)

Balance December 31 2014

Common Stock

6410

30

1022

(969)

28

445

4966

32

3118

(4039)

536

4613

All dolar amounts In thousands except per shore data Unaudited

Retained Earnings

$ 49302

9674

58976

11637

1877)

$ 69736

Accumulated Other

Compiehensive Income (Loss)

$ 3048

(3876)

(828)

2488

1660

Tola Shamholderf

Equity

$ 58760

9674

(3876)

30

1022

(2969)

28

445

63114

11637

2488

32

3118

(4039)

536

(877)

$ 76009

SUMMARY Of SIGNIFICANT ACCOUNTING POLICIES

Nahnn gl Oogralppbull qnd Prlndplu gl ConsoldgtgP The consoUdoted flnoncial statements Include Arbor Bancorp Inc and Ila wholly owned suhstdkuy Banko AnnAtbor (Bank) logether referred lo os lhe Cotporallon On fanuaty l 2013 the Corporotion through a newly established Bank substdlmy Banko Ann Arbor leasing (leoslng Company) acqutedall oI the slock of the Ervin leasing Company an Ann Atbor Michigan based leasing company which provides business equipment dl1eci fioanclng leases lo companos ocross Iha United Slalos lnlorcompany tronsacllons and baamcs aro olinunolod In consoldollon

As of July I 2014 Ervin Leasing Companyienamed and rebronded to Unifi Equipment Finance

The Bank provides financial services through Its oUicas In Washtenaw and Wayne counties Its prlmorydepostt products ore checkinQ savings and lcrm certillcate accounts and Its primary lending prolucts ate residential mortgage commefCiaL and Installment loans Substantially all loons ore secured by specillc Items of collateral Including business assets consumer assets and oomrrercial and resldentol real estate Commercial loons ore expected lo be repaid from cash low from opemttons of businesses Other financial instruments which polentiolly represent concentroUons 0pound credit risk include deposit o=unts in other financial lnsUluUons and odoml funds sold

Subuquinl EycntrThe Corporation hos evaluated subsequen events for 1ecognltlon and dlsdosu10 through februory JO 2015 which Is the dote the flnonciol statements were available to be Issued

U1c o Es ti mg trbull Th prcpom linonciol stolamons m conlormlty wilh accounting prlnclplas ganorally occcplod in I ho United Solos of Amedeo management makes eatlmoes and ossumplons hosed on avoloble Information These estimates and ossumptlons ofect Iha amounts reporled In the financial sotemenls and the dsdosutes provided and future results cculd dlller The ollowame or loon losses the reserve for repurchase of sold loons the carrying amount cl the FDIC Indemnillootlon Asset lease resduol values and the folr values cl ftnandal Instruments ore particularly subject to change

Cash and cash equlvalenls includes cash deposits with other llnonciol lnsUtuUons under 90duys sho1Menn Investments and federal funds sold Net cash flows are reporled lor CUstomer loon and deposit transactions federal funds purchased and repurchase og1ccmonts

lncrnslmiddotBcmlng Dcposlts In Banhbull nterast beating deposits In bonis mature wllhn one year and ore co riled al cost The balance outstanding at year end 2014 and 2013 was held al the Federol Reserve Bank

Debt socuntics oro closslliod os ovolloblo lor solo when hoy mighl bo sold bororn mofurlly Securiliesovoilablo for sale ore corrled at fair value with umeatlzed holding gains and losses reported In other comprehensive Income net o( Ox Interest Income includes amortlzatlon of purchase premium or discount Gains and losses on soles are based on the amortized cost o the socurlly sold

Interest Income ndudes omo1ttzallon of purchuse p1emum or discount Premiums and discounts on oocurlles ate omorllred on Um levelmiddotyield method wlhoul nnticlpotng prepayments axceptfa1 mortgage backed secu1llles whettt ptepaymenlll are antlclpaed Goins and losses on soles ore recorded on the trade dote and determined using the spellc denlillcotlon mehocl

Management evoluoles sacurltles for olher-thonmiddotemporory lmpalrmen (QTnl on at least a quarte1ly basis and more frequently when economic or market condUons wormnt such on evaluation For securlties In an unrealized loss posltlon monagemenl considers the exenl and duration of the unreolzad loss and the llnonclal condUan and neormiddotlerm prospects of lhe Issuer ondolso assesses whelher ll Inlands lo sell or II ls more lkely lhan not thal II wlll be required lo selL a security In on unrealized OS11 poslllon before recovery of Its amortized cost basis li either of the crllerla regarding Intent or requirement to sell is met the en Ute difference between amortized cost and fair value Is recognized as lmpannent through earnings for debt securities hot do not meal the olmemenloned ctl1eria lhe amount of Impairment is split Into two components as follows ll orn ieloted lo credit Joss which mu11t be 1ecognlzed In the lncome 11tatement and 2) olhermiddotlhonmiddotlemporory Impairment (0111) related lo other faclors which ls recognlmd In other comprehensive Income The credit loss ls defined as the d1flerence between the presenl value of the cash flows expected to btt collected and the amottlied cart ba11is For equity aecudtes thu en Ure amount ol mpolnmm ls 11lCOQnlzed through earnings

fcdpral Homo Ipgp Bgpk FHI HI Stock- Tho Bank is a mamhorol lhafHtB sflilom Mambors ara roqurod oowna ca1tnlnamount of stock based on the level of borrowings and other faclors and may Invest ln oddlionol amounts FHLB stock ls cotrled at cost dossifted os o restrlcied security and perloclcoly evaluated hr Impairment based on ulllmoe ecoveryof par value Both cash and stock dividends ore 1epotled 01 Income

LoaruHildJiuSttlc Loons orlglnoled and lnlended or sale Jn the secondary morhl are corrled al Iha lower of cos or poundair value In the aggregate os determined by outslondlng commlments from Investors Net unreolzed losses ii ony ore recorded as o valuation ollowanoe and charged lo earnings Loons are sold with servicing released Buyeni do not hove recourse against Iha CorporoHon for subsequent loon OSlell However incerton sluoUons the buyer con require the Corporotlon to rnputchose loons

Loww Loons liiat monagemen has the In I en and abllty lo hold for tha loreseuabla future or unUI maturity or poyul are 1epo11ed at the principal balonett outstanding net o pure ho premiums and discounts and on allowance for loon losses In1e1est Income is roporlarl on tho tnterosl method and lndudas omotllrotion c[ not daforrcd loon foos and costa ovor tho kxm totm lnlerost incomo

All dolloramounll In lhousonds except per shore do lo Unaudled

SUMMARY OF SIGNIFICANT ACCOUNTING POLICJES Continued)

on all loans Is generally dllconUnued al the Ume the loan Is 90 days delinquent unless the credit Is well-secuted and Jn process ofcallecUon In all cases loans ore placed on nonaccrualor charged-oil at an oorUer dole JI collection ol prtncpa] or lnleresl Is considered doubtful All Inlet est occrued but no received for loans placed on nonoccruol Is reversed against Interns Income Inleresl received on such Joans ls occounled for on lhe ooshmiddotbosls or cos recovery melhod unlll qualllylng for return lo accrual

Loons ore rel urned to 0ccruol salus when oll lhe p1lnctpal ond interest amounts conlracluollydue me brought current and [ulure payments ore reasonably assured

Cpyornd Ipgnsbull Loans acquired in 2010 In a Federal Deposit Insurance Corporation (FD)C)-asslsted transaction are oovered under a loss sharing agreembullmtandore refoned lo as middotcovered loansmiddot Pursuant lo lhti trms or thti loss shoring agreem1mts covtired loons are subacl lo a stated loss threshold whereby Iha FDIC will reimburse the Corporaton [or BO of IOSStls incuned The Corporation will 1eimbursa he FDIC for Its share of recoverlm with respect lo losses poundor which the FDIC paid the Corporalon a mlmbmoomont undor tho loss sharing og1oomont Tho FDICs obllgolon to rolmhurso tho Cotpotc1lion for ]()SS()S with raspcct lo covered loon begins with the first dollar of loss incurred

Coveted loons warn recorded at far value al the time of acquston Fair values for covered loons are hosed on a dscounted cash flow methodology lhotconsdered various actors Including the type of loonond related collalerol dossflcatlon status fixed or votiobla inleresl role tlm10I loan and whehtir or nol lhe loan was omorlirlng and o discoun ralti reltJClin11 the Corporolionmiddots osoossmont of risk inhomnl in tho cosh llow cslmoos Covorcd loons woro gruupod tcuolhcr according to smilor choroccrisUcs

ond were treated in the aggregate when opplylng various voluaon technlques

AIJlurchose certain covered loons had evidence of credlt deterioration since orlgnolion These loons ore accounted lor lndMdually The Corporation estimates lhe amount and timing of expected cash flows for each purchased loan and the expected cash flows in excess olomount pold Is recorded as Interest Income over the remaining life of he loon or pool (occretable yield) The excess of the loons or pools contractual principal and Interest over expected cash Hows Is not recorded (nonocc1etoble dllerence) Over the life ol the loon or pool expected cash flows continue lo be estimated II he present volue oI expected cash flows is less than the carrying amount o loss is recorded ff the presen volue of expected co sh Hows Is greater lhon the carrying amount It ls rocognlzed as port o future Interest Income

Dire cl Dnqnclng klse Rrcynhln11middot The results of the Corpotolons equipment loosing acUvUes are recorded within loons on the consolidaled balance shtiel niese direct lino11cing leases provide for lull recovery ol the equipmenl cost over lhe lenn al the lease

The CorporaHons nal Investment in direct Hnanclal leases lscomptlood of lhe lollowtng elements minimum lease payments receivable the esllmated unguaranleed residual value ol the leased equipment at the lease lermnalon dates and unamortized lntiol dlrect costs less unearned Income Estimated guaranteed residual values are revlewed perodicolly to determine [ the cunent ttsthnalc of the equipments fotr value appears to be below Us recorded estlmue If rred )esldual vululS urn adjusted down word lo reflect adjusted estimates of fair market values Upward adjustments lo residual values me nol permitted

Unoomod lncomo fa tho amount bywhlch ho mlnmum caoo paymonts rccclvnblo plus tho osUmotcd unguarantood rosdual valua exceeds the cost of the leased equlpmanlo the inception of lhe lease Uneomed Income ts amortized aver the Initial lease term lo p1oduce a constant rote ol teum on Iha net Investment In lhe lease lnllol direct costs ol ocqultlng a lease are coptallzed when incurred and amortkedover the Ille of the lease consistent with the method used lo recognize Interest Income

The Corporallon evoluotes lhe colectablllly o[ Is leose receivables hosed upon carloln foclors such as hsforlcol colteclon I rends and aging categories Leose receivables ore wrUen of against the allowance or loan losses when the receivable Is determined to be uncollectlbe

AllniulllllU The allovance or loan losses ls a valuaton ollowonce or probable Incurred credit losses Increased by the provislon lor loon losses and decreased by charge ols less rncovetlttS Munogemcnt estltnates the ulowonce bulome requited using past loon loss experience the nature and volume of the portfolio Information aboul specific borrower sluatlons and estimated collateral values economiccondltions and other factors Allocatons o the allowance may be made for specific loons bul ho onllro alowonco Ill ovoilobla or any loan hot Jn monogomonfs judgment should be charged off Loan losses aro charged against the allowance when management believes the uncollectlbllty of a loon balance Is confirmed

The allowance consists al specific and general components The specific oomponent relates lo loons hot ore Individually clossifed os lmpJlred or loans otherwise closslfledos substandard or doubtful The generalcomporenl covers rcgtn dassilled loons and Is based on hlslorleol loss experience odusled for current Iocors

A loon Is lmpored when full payment under he loon terms Is no expected Nonbullhomogeneous loan classes such as commercial and commercial real estate loons and homogeneous loan segments such as mortgage and consumer loons modified as troubled debt restructu1lngs or loons ossocloled with non-homogtineous relationships are lndivkluolly evolualed for lmpomamt 1pound a

loon Is Im poi red o portion of the ullowonce Is allocated so hot Iha loon Is tepo1led net at the p1eoont volue o estimated futurn cash flows using the loans exlstlnQ role orot the fair value ocolloterol ii repay men ls expected solely from the collo1eral Lorge

All dollar amounts In thousands except per shore do1o Unaudited

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

groups of smoler balance homogeneous loons such as consumer and residential real es tale loons are collectively evaluated for impalnoont and accorrlngly they are rot sepomtely identified for lmponnenl disclosures Loans for which the terms have been modiled resulting In o concession and for whch the borrower s experiencing flnorcial difficulties are considmed troubled debt resructurtngs and classified os Impaired

Factors consdurod by manogomonl In dolor mining lmpnlrmont lncluda payment status collatora value and tho prohohUty of collecting scheduled principal ond Interest payments when due Uxlns hat experience lnslgnllloont payment delays and payment shortolls generoly are not clossled as impaired Management determines the significance o payment delays and payment shortfalls on a case-by-case basis toking lnlo consideration all of the cl1cumstancas surrounding the loon and the borrower Including Iha length of the delay the reasons for the delay the borrowers prior payment record and the amount al the shottfoll In re lo lion to lhe prlnclpo ond lnleresl owed

Troubled debt restructurlngs me sepmotely Identified poundor lmpormen disclosures and ore measured at the preoon volue ol estmoed future cash flows using the loons effective rote at Inception lpound a troubled debt restructuring Is considered to be a collateral dependent loan the loon ls reported net o the oir value of the collateral For lroubleddebt restructurlngs that subsequently default thti Corporcton dete1mh1cs the amount a( reserve In occordancu wilh the accounting pollcy for the ollowonce for loon losses

Tho gonorril componontcovots non lmpahcd l=ns ond la hosed rm hsloricol loss oxporlanco adjuod for currant factors Tho hlstorlcol loss experience is de1ermlned by portfolio segment and Is hosed on the actual loss history experienced by the Co1po1alon over the most recent five years For all segments he actual loss experience Is supplemented wlthother economic facto is hosed on the risks present for each porIollo segment These economic foclots Include consideration of the folio wing levels of and trends In delinquances ond lmpored loons levels or and trends In charge-offs and recoveries trends ln volume and terms of loons effects ol any changes In risk selecon and underwrllng slondords olher changes in lending pollces proeedures ond praclkes eperienca oblty ond depth of lending managemonland other relevant staff national and loco economic trends and conditions industry conditions ond efects ol changes In credl ooncanrolions The following portfolio SPgments have been Identified

Comrnerdol - Loons to businesses hat Ole sole proprietorships partnerships limited liobllty companies and corporations These loons ore for commercial Industrial or p1ofessionul purposes The riskcharactctlstics of these loons vory based on the borrowersmiddot business and industry as repoyrent is typically dependent on cash flows gene ruled from the underlying business Within this loon segment the Corporation has identified loon classes of commercial and industrial commercial realestole and commerca kmd devolopmant

Real Estate - Loons to purchase or rellnance single omlly residences The risksassocated vi th this oogmenl ore generally dependent on the ovomU real estate volue environment and Individual payment oblgalons Real estate Is subject to changes In market valuation and can be unsloble fora variety of reasons Within this segment the Corporation hos idenUIJed classes of resldenllol ond home equly loons

Consumer-Term loans or lines olcredlt for the purchase ol consumer goods vehicles or home Improvement The risk characteristics of the loom1 In I his segment vary depending on the type of colateml but generally repayment Is expected from a customerconlnuinQ to generate o cash How I hot supports the calculoted poymentobllgaton Secondary support could involve llqudution o tOlulerol

Loosos-Dirtel Flnanca equipment loaoos Rislchamctoristcs vary hosed horn tho borrowers busnoss and lnduatty as tepaymenl Is typcallydependent upon cash Hows generated ram the bonowers operations Secondary support could Involve repossessing the lensed colloleral

FDIC lndomnjficu The FDIC lndemnlilcoUonosset results from the loss share aQreements In the FDCltzsslsted transocllon The ossel ls measured seporalely from Iha reloed covered osses as they are nol conlroctually embedded 1n lhe assets and ore no transferable wllh the asses should lhe Corpora Hon choose lo dispose of them and represenl the acqulslllon date fair value al expected reimbursements from the FDIC Puisuont lo the arms al the loss sharing ag1eemenl cove rad loons ore subject to a stated loss threshold whereby the FDIC will reimburse the Corporation for 80 of losses Incurred These expected reimbursements do not Include roimburroblo amounts related to future covered expendlures These oosh flows ore discounted to reflect a metric of uncertontyofthe Urning and receipt of the loss shoring reimbursement from the FDIC This asset decreases when losoos aie realized and clohns me submUled lo the FDIC or when customern repay their loons In full and expticOO l=cs do not occur This ossel also Increases when esllma1ed future lossea Increase and decreo6e3 when esttno1ed future losses dec1ease When ostlmotod futuro loon losses lncrcaoo ho Corpomton rccorrls a provision for loon lossos ond lncrcasos Its allowonco for loon lOS009 occordngly The resulting increase In the FDIC lndemnlfcollon ossel Is recorded os on offset to the provision for loon losses During 2Dl4 and 2013 lhe provision for loon losses was offset by S320and Sl266 teloed lo Increases In lhe FDIC lndemnIlcotion asset

All dollar amounts in thousands except per share data Unaudited

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Continued)

otbtH Reg y1qt1 Own ad OREOJmiddot Assets acquired through er IIllltead cf loan forocloouro ore inltlally recorded ot loir value less costs to mill whim ocqulredestabllshlngo llew cost lxms These assets are eubsequentlyoccounted for at lower cl cost or fair value )ass eitlmuled costs to sell 1pound fair value declines subsequent to lo1lltlosurn u valuation allowance is rncorded through expense Oparntna cosLI nfo1 ocqulslUonara expansed

OREO acquled by the Corporation lhtough loon defaults by customers oncove1ed loons or acquired by the Corpomllon as pail oI Its acquisition of New Uherty Banklsoo Note 2 Business Comblnotlonsl me covered under the loss shoring agreement discussed above Pursuant to the etms of the = shodng ag1aemen coveted assets ore subject lo a s lo led loss threshold whereby the FDIC will reimburse the Corporation or 60 of losses Incurred Any gains or losses realized at the time of disposal oro portlolly offset by tho FDIC toss shore and oro roloctcd In Income Al year-end 2JM ond 2013 SO omi$155 ol lha Gorporalions OREO wos subject lo the loss shoring agreement

qulpminl god 1ltauhold lmnroyemenlgbull Lond Is corrled at cosL Premises and equipment ore stoled ot cost less accumulated depreciation generally com puled on the straghtmiddotlne basis over the assets useful llves and over the terms of the lease or the esthnotm useful llves lor leasehold Improvements whichever is shortur

Qmb Surrnndqr Yaluo al J lfo Jnsumncebull ThoC01pornlon hos punhaood Hfohmurnnco pollclas on 001lain key oxccutivos Cash summdor voluo ol lfo Jnsuroncc Is 1ocordrnl ol lho amount thot can ba 1callzod under tho nsuronco controctot tho balonco sheet dole which Is the cash surrender value adjusted for other charges or other amounts due tho tore probable otseltlemenl

lampna-Term Assa1bull Premises and equpmen olher lnlongble assets and other long-term assets 01e rnvewed for Impairment when events indicate heir carrying amount may not be recoverable from future undisccunted cash flows If lmpolred the assets are recorded a fair value

Bepurchgee Agrccmgnj11bull SubsanlolyaI repurchase ng1eement UobiHUos represent amounts advanced by various customers These balances ore not deposits and ore no covered by Jederal deposit lnsuronce SecurUes ore pledged to cover theiie lablllles

Jrcrmfers gl Fingncgl AsGesbull Ifonsfers of financial osselsare accounted for as soles when control over the assets hos been rellnquisbed Control aver transferred ossels Is deerned lo be surrendered when the assets have been isolated from the Corpomlion tho tronsforco ahtolns tho dght U1no of conditions that constmln II Imm taling ad van logo of that right to pledge or cxchango tho tronsforrod assets end tho Corpo1otlon dOCll not maintain cifoctlvc control over tho hansfoncd assets hrough an agreement to repurchase them before their maturity

smck_Enenutllm Compensotlon cost is recognized for stock options and restricted stockawords issued lo employees bosed on the fair value o[ lhese awards at Iha dote 0pound gronL A BlackmiddotScboles model Is ullllzed fo eslmale the folr value cl sled opHons

GompensoUon cost ls recognized over the required service period generally defined as Iha vesting pedod For awards wllh graded veslng compensation cost is rncognlzad on o sralghlmiddotline bosls over the requisite service period for the en Ure award

lncomo TggeBbull Income twc expense fa the total of he current year income tax due or refundable and the chonge In deferwd tux 0sets andlobillties Ikfened toxossels and lobiUlei me he expected future ax amounts poundor the tempomry dUferences btitween cnnying amounts and tax hoses al ossots and lobilltles computed using onoctod lox mos A valuation allowanco IE ncodcd reduces delened tax assets to Iha amount expected o he realized

A tax position is recognized as a benefit only Ell ls more likely than not tho the tax position would be sustained In a lox exominolcn with o tax exomlnatlon beng presumed to occur The amount recognized is the largest amount of tax benellt tho Is grealer than 50 lilelyol being realized on exomnoUon For tax posllions no meellng he Mmore likely hon natM lest no lox benelll Is recorded

The Corpototon recognizes lnterestondor penalties related lo Income tax matters In Income tax expense

QfBglgpcemiddotShMI Ejpgpclgl Jostrumentw Financtol Instruments include off balance-sheet credit Instruments such us

commitments to make loons and stondby lettets cf credl Issued to meet customer Ilnomlng needs The face omoun for these items represents lhe exposure to loss before conslderlng customer collolerolcr oblllty lo repoy Such Iinoncol Instruments ore recorded whon they mo funded

Earnings Per Shattbull Bosc earnings per shorn ls net Income divided by lhe weighted overage number of common shores outslondlngdudng the pedod Diluted earnings per shore Include lhe dilutive effect cf oddltonol potential common shares tssuoble under equity hosed plans

All dollor amounts In thousands excepl per shore data Unaudited

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Conlinucdl

CQw1UUicnelyc Ineqmobull Comprehensive Income conslslll o[ net income and other comprehensivu Income Other comprehensive income ndudus unrealized gains and losses on suurlU avalablu or salu which ore also recognized as separate components ol equly

Lon Cantlngcociosbull Loss contingencies Including claims and Iago ocilons otlsng Jn the ordinary courso of husnass om rocordcd as llobllUes when the likelihood o loss is probable and on amount or long a cf loss con be reasonably estimated Management does not believe there now are such molters that will hove a material elfect on the fnonclol solements

Re1rclpps on Cruhl Cosh on hand or on deposit wllh he Federal Reserve Bonk cf Sl521 and $1312 was required to meal regulatory reserve end clearing requlrnmenls al year end 014 and 2013

fair Yalur cf Engncgl ipdltumenll Fair values o[ llnoncol Instruments ore estimated using relevant market lnFormoion and other assumptions as more fully disclosed In a sepuae note Fair value estimates Involve uncertain Iles orcl matters of sgnlllcont judgment regarding inerest rotes credit risk prepayments and other loctors especiolly ln he absence of brood rno1kets or particular Uems Changes In ossumptlons or In market conditions could sgnillcantly olecl the estimates

Diyjdnnd Bosricljanbull Banking toguotions require molnlainlngcolaln cnpla lovos and nay mil tho dvldonds paid by tho honk to tho holding company or by Iha hodina com pony ta rhmoholdnrs

Reclnsaificalionsbull Some Items In the prior year financial statements were reclassifed to conform lo he current presentation Reclassillcaons had no efec on prior year net Income or shareholdersmiddot equity

ampl9plion gl Nuw Aecgunlng Sgpdgrdsbull In Februory 20[3 lhe FASBomended exlsllng guidance reloled lo reporlng amounts rcclossUiOO out ol accumulated othorcomprohonsivo income Thoso amondmonts do not change tho current rcquiromons or reporting net Income or other comprehensive income In flnonclol statements These amendments require an entity lo provide lnformatlon about the amounts reclassified out of accumuloled olhercomprehenstve Income by componenL In addltlon on entty Is required to present eilher on the loce of the state men where net Income Is presented or In the notes signifconl amounts reclassified cul ol accumulated other comptebensve Income by the respective line Items of nel Income bu only j[ lhe amounl reclassified 1s required under US GAAP to be reclasslfied to ne Income In its entirety in the soma reporting pedod For other amounts that ore not requited under US GAAP to be redassfied In their entirety lo net Income on enlty Is required to crossmiddot mforonoo lo other dlsolosutcs roqutcd under US GAAP that provide addtonal dctals oboul thoso amounts These omondmcnts ore elfeclve prospectively for fiscal yeats and lntedm periods within those years beginning alter December 15 2013 Early adoption Is parmltled The elfecl ol adcptlng his sondard dd no hove a moterlal eleltt on the Corporatons opeioUng results or llnanclal condition

In Decombar 2013 lhu FASB omandcd ho Glossary of lhu Codilicotlon lo include a slnulu dollniton of o public buslnossantly for future uso in US GAAP Tho doFloUon ol a public business enlily will ho used in considodng tho scope of now finonciol gudonco and will identify whether lhe guidance does or does not apply to public business entitles The amendment does not allectexistlng lequ1ements and there Is no elfectlve date The adoption ol lhs sondo1d dld not hove a material effect on the CompanyS operotng rosuls or llnondol condition

lnJonuory2014 the FASB amended existing guidance lo dailfy when a creditor should be conside1ed lo hove tecelved phrJcal possession of rnsidonlol tool oatolo propaty collotomldng o crmsumcr mmtgogo loan such that tho loon should ho dcrccognlzod and tho 1001 estate rccognzcd Thcso amendments dorify that an in substance repossession or foreclosuro occurs end a creditor s considered to have received physcol possession of resldentol reol estate property coloterolldng a consumer morlgoge loon upon ether 11) the credlor oblonlng legal title to the residentlol 1eol estate properly upon completion of a foreclosure or (2) the borrower conveying oil lnlarest In the resldentol real eslae property lo tha credtor to sotsfy that loon through completion of a deed Jn lieu cf foreclosure or through o similar legal ogreemanl Addillonol disclosures ore required These amendmenls ore eHecllve for publc business enUles for annual perJods end Interim periods within those annual parcxls begtnnlngafler December 15 2014 Amendments In th ls stondord con be applied using a modified retrospecUva or prospective transition methcxI Early adoption ls permlted The adoption ol this standard ts not expected to hove a maedol effect on the Componys operating results or llnonciol condtlon

In Moy2014 the FASS amendOO existing guidance realOO la revenue from con1mcis with custame1s 111sumendment supersedes end replaces nearly all existing revenue recognition guidance Including lnduslrymiddotspeclflc gudonco establishes a new conltolshybosod ovonuo mccgnllon modal changos the basis for deciding whon rovonuo is rcccgnizod ovor limo er at a poln In Hrno provides new and more detailed guidance on speclflo epics and expmdsand Improves disclosures about 1evenue In oddllion his amendment specfes lhe accounting for some costs to obtain or fulfll a contract with a customer These omendmenls ore elfectlva for annual IeportJng periods beginning ofter December 15 2016 lncludng Interim periods within that reporting per Joel Early oppllcolonls net permitted The amendments should be applied retrospectively 1o all periods presented or retrospectively wllh lhe cumulaHve effect recognized ol lhe dole o[ lnllol oppllcotlon The Company Is currenlly evoluollng tho Im po cl of his new occaunUng standard on Iha consolidated financial solornonts

All dollar omounts In thousands except per shore data Unoudtted

Ervin Leasing Business Combination

On January l 2013 the Corporotonacquhed 100 of the outstanding common shares of Ervin Leosng Corporation In exchange for cash lo toling $4622 Under the erms of he acqulsltlon oll common shareholders rncelvtgtd cash equal ta tatul equity o Ervin Leoslng as of December31 2012 plus $600 Ervin Leosing Company results of operotlons ware Included In the Corpomlans rnsults bognnlng Janumy l 2013 As al July l 2014 Ervin Locmng Company ronamcd and rabmndod to Unifi Equlpmon Flnanco

The following able summarizes the consdetollon paid for Ervin Leosng Company ond Iha omounts ol lhe assets ocqulrnd and llobUias ossumad recognized al he ocqusUon dote

Consderalon Cabullh

For Value of Total Conslderollon Transferred

Recognized amounts of Identifiable assets acgulred and Uabllites assumed

Gosh and cash equivalents Direct llnoncng leases Noncompeta agreement Dlharossels

Tola assets a ired

Notes payoble Other labHUes

Totol lobllltcs assumed

Total idenlfloble net assets

4622 4622

366 11304

100 l098

12BSB

7514

732 8246

4622

No goodwill or olher lnlanglble ossels beyond lhe noncompale agreement above warn generoled as par of lhe Ervin Leosing business combinotlon

New Llbe1ty Business Combnaton

On May 14 2010 the Corporation enterecl into a purchaie nnd ossutnpton agreement (Naw Llbetty Agreement) with the Federal Deposit lnsuranco Corpomlion FDIC) as rncclvor purs1mnl to which tho Corpomton mqulrcd cctlan asts ondassumcd subslontaJy oll o[ the deposits and cetlan lobUtias of New Llbarty Bon(Naw Liberty) New Liberty ope roted one bonklngcanar In Plymouth Michigan

In connecton with the New Liberty ocquslon the Corporaton entered lnlo a loss shoring ograamenlwlth the FDIC that covers mos of New Llbarlys ossels hosed upon the sellers records Including single family resldental marlgoge loons commerciol rool es1ate and commercial and ndustriol loons and OREO (collectvely covered assets) The loss shoring agreements are subject lo certan servicing procedures as sped fled in agreements wllh the FDIC The loss shoring agreements opplicable to sngle family residential morigoge loons provide for FDIC loss sharing ond Corporation reimbursement to tho FDIC for ten years The Joss sharing agreemens oppllcoble to all other covered assets provide for FDIC loss shoring for llva years and Corporation ralmbursomonl of recove1les lo he FDIC far elght yeurs The eXpgtcted Jembursements under the loss sharing ug1eements were recorded us an lndemniUcoHonosset al an esHmated fair value of $15949 on the acqutsiliondote whch represented the present volue oI the oxpoctcd nelcnsh rohnbursomon rolalod lo tho lolS shoring ogmomonls

The CorpotoHon acquired cetlan olhar New Llbarty assets nolcova1ed by Iha loss shoring ogreemenl wlh Iha FDC includlng =sh and secutlles purchased ot lalrvolue At acqusUon lnogg1egole loons ocquled hod on unpaid principal balance oS9mand a lar volue o$69JXl9 and deposits assumed hod o bolo nee of $90l 17

Alldolloramounta In lhousands except par share dala Unaudled

ADDITIONAL INFORMATION

We hove Included ltnonciol inlormotion for Iha yaarendftd Decamber31 2014 Our full ftnancol statements Including noes wem audited by Crowe Horwath our independent publkaccountont ond Crowe Horwath goveon unquallfled oplnon The compeo audited flnondol stataments Including the oudUors opnlon and notes ore avoloble upon request

11 you would lile o copy of the audled financial stolemenls or If you have any quesUons concerning the annual meeting pease con la ct your bank pmsdonl TI mo thy G Marshall at 125 South Filth Avonuo PO Box 8009 Ann Arbor Michigan 4BID7

All dollar omounts In thousands except par share data Unaudited

Officers

Executive Management

Timothy G MarshoJI Presidentamp Chief Execulive Ofllcer

Charles E Crone fr Execullve Vice President amp Chief Revenue Officer

Pall H Jud11on ExecuUve Vice Presfdenl amp Chfef Opera Ung Officer

Lyle r Dahlberg First Vice President Trust amp Invesmenl Group Manarier

Cynlha Livesay Firs Vice Presidenl Credi Administration

Mark J Slade First Vice Presfdenl amp Chief Financial Ofllcer

Mortgage Retail amp Privatbull Banking Services

Patrlck A Tamblyn Senior Vice President Private Banking Manager

Klrsly E Haholan Vice Presldenl amp Mortgage De[Xlrlmenf Manager

Amnndo M Harl Vice Presden Administration amp Opemtfons

Kimberly A Clugston Vice President amp Senior Mortgage Loon Officer

Linda S Brewer Vice President amp Private Banking 0ffcer

Mary Hays Vice Presden Private Bonling Officer

Chmles W CracrcrH Vice President Befall Moitgage Soles Manager

Curl DEnt Vice President amp Morgaga Loan Officer

Christine G Hold Vice Presfdenl Cash Management

Krltlna L Moyer Vice Presden amp Plymoulh Branch Manager

Joan C Hendrlck1 Vice President amp Main Office Brandi Manager

Kevin M Kramer Vice Pzesidenl Pcivale Banking OWrer

Denise J Sialleld Vice Presden amp Marlgage Loon Officer

Dennis D Ticknor Esworh Ofnce Branch Manager amp Health Savings Account Specialist

David K Pote Ypsilanti OfJee Branch Manager

Shelley L Rankin Saline Office Branch Manager

foseph D Croigmile Motlgorc Loon OfJeer

Kevin C Salley Morgage Loan OfJeer

William E Smith fr Mortgage Loan OfJrer

Sondra L Bccver Deposit Operations Offirer

Stoey B fohnson Sr Relolionsl1ip Banking Ollicer

Kimberly K Snow Relalionship Banking amp Cash Management Oflfcer

FinanC9

Lha AMason Vice Presidenl amp Infernal Auditor

Jame$ A Miller Vice President amp Dfreclor Human Resources

Bmbcrro L Morrison VicePresiden

Bella MFemondez Assisan Vira President amp Accounting Oflicer

Trust amp Investment Monagemcnl

Thomas R Kalloword First Vice President amp Senior Trusl Olflror

Stephen J Seymour Senior Vice Presden amp Senior Investment Olflcer

Sonia S Perle Senior Vice Presidenl amp Investment 0[cer

Cothlcon L Savoie Senior Vice Prosldont amp nvestmenl Offrer

Margaret L Vogel Vice President amp Trusl OfJcer

Erin E Archambault Vice President Trust Operations

Eric P Helbm Vice Presidenl amp Director of Business Development

Deborah A Jones Vice President amp Business Developmen Officer

Jacqueline Jenkins Vira Presidenl Portfolio Manager amp Businoss Dovclopmcnl Ollcor

Mllzl J Talon Vice President amp Trust Offlrer

Diano S Winner Vice President amp Investment Officer

Sarah Dobson Campbell TrusOffcer

MarkA Sklfl lnveslmenl Oflicer

Commercial Lending

Walto r G Byes Presden Saline District

Michael L Michon President Plymouth Districl

Michael H Chotos President Ypsilanti Districl

Mlrhuel A Cole Group President Technology Industry Group

Sall sh B Jost Senior Vice President amp Senior Loon Officer

Hons W Maler Senior Vice President SpeclolY Banking

David A Guenther Vice President amp Sonier Loon Officer

Robert R Roiie Vice Prcsldenl amp Senior Loon Ofllcer

Mork D Bally Vice Presldenl amp Commercial LoonOfflrer

Jonathon P Bowdler Vico Prrsidcnl amp Commercial Real Estate Manager

Jomes J Plummer Vice President amp Cormnerciol Loon Olicer

Mork H Holtz VicePresidenl TechnoloQy Industry Group

Information System1

Jeffrey J Stanton Vice Presden I amp ChiefTechnalogyOficer

Marketing

Jonke M Ortbrlng Vice President amp Marketing Department Manager

Cwdil Administration

Dawn M Prescott Senior Vice President amp Managed Assets Offirer

Trina M VonNesl Vice Prellden amp Credi Manager

Stephania N Hnnigan Assistant Vire President Consumer Credll amp Compliance

Soro L Hoffman Assistant Vice President amp Small Business Lending Offirer

Pamela f Wetzel Credi Atlminislrolion Officer

Compliance

Susan E Wcrgnor Vice Presfden Compliance 01icer amp Compliance Department Manager

John E Fosler Vice Presden I BSA OFAC amp Security Olirer

Brion J Powers Asslstanl Vice Piesden BSA amp Security Special isl

Cynthia K Shacllor BSASecurity Admlnlstralve Oficer

Unifi Eq11ipmbullnl Finance

Raymond J Grimshaw President amp Chief Ixcculva Olliccr

Thomaii J Conzolmmm Secretary Treasurer amp Chief Financial Officer

Directors

Thomas P Bo1dere Ptesdenl Midtown Group Inc

Jan L Garfinkle founder amp Manarlng Director Arborelum Ventures

Isadore J King President amp Chief Executive Officer Synergy Partners LLC

Timolhy G Marshcrll President amp Chief Execulfve Olflcet Bank of Ann Arbor

Michael C Martin Vice Presidenl Firs MarUn Corporalon

William C Martin Chairman Athletic Director Emeritus University of Michigan

Erneel G Perich Presden Perich + Partnets Ltd

David R Sams Mcrnaging Partner 360 Advisors LLC

Joseph A Sos Owner Ses Moors Inc

Cynthia H Wilbanks Vice President for Government Relalons University of Micbfgan

Jelfrey S Williams Chairman amp Chief fxeculve Offfcer Tangent Medical Technologies NeuMoDx Molecular Tnc

Directors EmcritU6

Jomes WAndorson Jr President The Anderson Assodoles

Richard P Eldswick Foundfnrr Diteclor Arbor Partners

Jun Barney Newman Vice Presiden Ann Arbor Dlslrfcl Ubrary Bocrrd

Rlchord N Robb DDS Regan Emeritus Eastern Michigan University

Downtown Ann Arbor

125 South Fifth Avenue

Ann Arbor MI 48104 7346621600

Downtown Saline

1 79 East Michigan Avenue

Saline MI 48176 7344705001

Downtown Ypsilanti

7 West Michigan Avenue Ypsilanti MI 48197 7344859400

boa acom

Ellsworth Rd amp Airport Blvd

801 West Ellsworth Road Ann Arbor MI 48108 7346698900

Plymouth

1333 West Ann Arbor Road

Plymouth MI 48170 734455 1 5 1 1

Stadium Blvd amp Liberty St

2204 West Stadium Boulevard Ann Arbor MI 48103 734822 1 900

Traver Village Shopping Center

2601 Plymouth Road

Ann Arbor MI 48105 7346623800

EQUAl HOUSIMG LENDER

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY

YEARS ENDED DECEMBER 31 2014 AND 2013

Balance January l 2013

Net income

Other comprehensive Income (loss)

Deferred shares plan

Exercise of stock options (29028 shares)

Repurchase ol 40816 shares of common sleek

Issuance of common stock

(400 shares)

Stock based compensation expense

Balance December 31 2013

Net Income

Other comprehensive Income (Joss)

Deferred shores plan

Exercise of stock options (56 176 shares)

Repurchase of 44988 shores of common stock

Stock based compensallon expense

Cash Dlvidand ($100 per shore)

Balance December 31 2014

Common Stock

6410

30

1022

(969)

28

445

4966

32

3118

(4039)

536

4613

All dolar amounts In thousands except per shore data Unaudited

Retained Earnings

$ 49302

9674

58976

11637

1877)

$ 69736

Accumulated Other

Compiehensive Income (Loss)

$ 3048

(3876)

(828)

2488

1660

Tola Shamholderf

Equity

$ 58760

9674

(3876)

30

1022

(2969)

28

445

63114

11637

2488

32

3118

(4039)

536

(877)

$ 76009

SUMMARY Of SIGNIFICANT ACCOUNTING POLICIES

Nahnn gl Oogralppbull qnd Prlndplu gl ConsoldgtgP The consoUdoted flnoncial statements Include Arbor Bancorp Inc and Ila wholly owned suhstdkuy Banko AnnAtbor (Bank) logether referred lo os lhe Cotporallon On fanuaty l 2013 the Corporotion through a newly established Bank substdlmy Banko Ann Arbor leasing (leoslng Company) acqutedall oI the slock of the Ervin leasing Company an Ann Atbor Michigan based leasing company which provides business equipment dl1eci fioanclng leases lo companos ocross Iha United Slalos lnlorcompany tronsacllons and baamcs aro olinunolod In consoldollon

As of July I 2014 Ervin Leasing Companyienamed and rebronded to Unifi Equipment Finance

The Bank provides financial services through Its oUicas In Washtenaw and Wayne counties Its prlmorydepostt products ore checkinQ savings and lcrm certillcate accounts and Its primary lending prolucts ate residential mortgage commefCiaL and Installment loans Substantially all loons ore secured by specillc Items of collateral Including business assets consumer assets and oomrrercial and resldentol real estate Commercial loons ore expected lo be repaid from cash low from opemttons of businesses Other financial instruments which polentiolly represent concentroUons 0pound credit risk include deposit o=unts in other financial lnsUluUons and odoml funds sold

Subuquinl EycntrThe Corporation hos evaluated subsequen events for 1ecognltlon and dlsdosu10 through februory JO 2015 which Is the dote the flnonciol statements were available to be Issued

U1c o Es ti mg trbull Th prcpom linonciol stolamons m conlormlty wilh accounting prlnclplas ganorally occcplod in I ho United Solos of Amedeo management makes eatlmoes and ossumplons hosed on avoloble Information These estimates and ossumptlons ofect Iha amounts reporled In the financial sotemenls and the dsdosutes provided and future results cculd dlller The ollowame or loon losses the reserve for repurchase of sold loons the carrying amount cl the FDIC Indemnillootlon Asset lease resduol values and the folr values cl ftnandal Instruments ore particularly subject to change

Cash and cash equlvalenls includes cash deposits with other llnonciol lnsUtuUons under 90duys sho1Menn Investments and federal funds sold Net cash flows are reporled lor CUstomer loon and deposit transactions federal funds purchased and repurchase og1ccmonts

lncrnslmiddotBcmlng Dcposlts In Banhbull nterast beating deposits In bonis mature wllhn one year and ore co riled al cost The balance outstanding at year end 2014 and 2013 was held al the Federol Reserve Bank

Debt socuntics oro closslliod os ovolloblo lor solo when hoy mighl bo sold bororn mofurlly Securiliesovoilablo for sale ore corrled at fair value with umeatlzed holding gains and losses reported In other comprehensive Income net o( Ox Interest Income includes amortlzatlon of purchase premium or discount Gains and losses on soles are based on the amortized cost o the socurlly sold

Interest Income ndudes omo1ttzallon of purchuse p1emum or discount Premiums and discounts on oocurlles ate omorllred on Um levelmiddotyield method wlhoul nnticlpotng prepayments axceptfa1 mortgage backed secu1llles whettt ptepaymenlll are antlclpaed Goins and losses on soles ore recorded on the trade dote and determined using the spellc denlillcotlon mehocl

Management evoluoles sacurltles for olher-thonmiddotemporory lmpalrmen (QTnl on at least a quarte1ly basis and more frequently when economic or market condUons wormnt such on evaluation For securlties In an unrealized loss posltlon monagemenl considers the exenl and duration of the unreolzad loss and the llnonclal condUan and neormiddotlerm prospects of lhe Issuer ondolso assesses whelher ll Inlands lo sell or II ls more lkely lhan not thal II wlll be required lo selL a security In on unrealized OS11 poslllon before recovery of Its amortized cost basis li either of the crllerla regarding Intent or requirement to sell is met the en Ute difference between amortized cost and fair value Is recognized as lmpannent through earnings for debt securities hot do not meal the olmemenloned ctl1eria lhe amount of Impairment is split Into two components as follows ll orn ieloted lo credit Joss which mu11t be 1ecognlzed In the lncome 11tatement and 2) olhermiddotlhonmiddotlemporory Impairment (0111) related lo other faclors which ls recognlmd In other comprehensive Income The credit loss ls defined as the d1flerence between the presenl value of the cash flows expected to btt collected and the amottlied cart ba11is For equity aecudtes thu en Ure amount ol mpolnmm ls 11lCOQnlzed through earnings

fcdpral Homo Ipgp Bgpk FHI HI Stock- Tho Bank is a mamhorol lhafHtB sflilom Mambors ara roqurod oowna ca1tnlnamount of stock based on the level of borrowings and other faclors and may Invest ln oddlionol amounts FHLB stock ls cotrled at cost dossifted os o restrlcied security and perloclcoly evaluated hr Impairment based on ulllmoe ecoveryof par value Both cash and stock dividends ore 1epotled 01 Income

LoaruHildJiuSttlc Loons orlglnoled and lnlended or sale Jn the secondary morhl are corrled al Iha lower of cos or poundair value In the aggregate os determined by outslondlng commlments from Investors Net unreolzed losses ii ony ore recorded as o valuation ollowanoe and charged lo earnings Loons are sold with servicing released Buyeni do not hove recourse against Iha CorporoHon for subsequent loon OSlell However incerton sluoUons the buyer con require the Corporotlon to rnputchose loons

Loww Loons liiat monagemen has the In I en and abllty lo hold for tha loreseuabla future or unUI maturity or poyul are 1epo11ed at the principal balonett outstanding net o pure ho premiums and discounts and on allowance for loon losses In1e1est Income is roporlarl on tho tnterosl method and lndudas omotllrotion c[ not daforrcd loon foos and costa ovor tho kxm totm lnlerost incomo

All dolloramounll In lhousonds except per shore do lo Unaudled

SUMMARY OF SIGNIFICANT ACCOUNTING POLICJES Continued)

on all loans Is generally dllconUnued al the Ume the loan Is 90 days delinquent unless the credit Is well-secuted and Jn process ofcallecUon In all cases loans ore placed on nonaccrualor charged-oil at an oorUer dole JI collection ol prtncpa] or lnleresl Is considered doubtful All Inlet est occrued but no received for loans placed on nonoccruol Is reversed against Interns Income Inleresl received on such Joans ls occounled for on lhe ooshmiddotbosls or cos recovery melhod unlll qualllylng for return lo accrual

Loons ore rel urned to 0ccruol salus when oll lhe p1lnctpal ond interest amounts conlracluollydue me brought current and [ulure payments ore reasonably assured

Cpyornd Ipgnsbull Loans acquired in 2010 In a Federal Deposit Insurance Corporation (FD)C)-asslsted transaction are oovered under a loss sharing agreembullmtandore refoned lo as middotcovered loansmiddot Pursuant lo lhti trms or thti loss shoring agreem1mts covtired loons are subacl lo a stated loss threshold whereby Iha FDIC will reimburse the Corporaton [or BO of IOSStls incuned The Corporation will 1eimbursa he FDIC for Its share of recoverlm with respect lo losses poundor which the FDIC paid the Corporalon a mlmbmoomont undor tho loss sharing og1oomont Tho FDICs obllgolon to rolmhurso tho Cotpotc1lion for ]()SS()S with raspcct lo covered loon begins with the first dollar of loss incurred

Coveted loons warn recorded at far value al the time of acquston Fair values for covered loons are hosed on a dscounted cash flow methodology lhotconsdered various actors Including the type of loonond related collalerol dossflcatlon status fixed or votiobla inleresl role tlm10I loan and whehtir or nol lhe loan was omorlirlng and o discoun ralti reltJClin11 the Corporolionmiddots osoossmont of risk inhomnl in tho cosh llow cslmoos Covorcd loons woro gruupod tcuolhcr according to smilor choroccrisUcs

ond were treated in the aggregate when opplylng various voluaon technlques

AIJlurchose certain covered loons had evidence of credlt deterioration since orlgnolion These loons ore accounted lor lndMdually The Corporation estimates lhe amount and timing of expected cash flows for each purchased loan and the expected cash flows in excess olomount pold Is recorded as Interest Income over the remaining life of he loon or pool (occretable yield) The excess of the loons or pools contractual principal and Interest over expected cash Hows Is not recorded (nonocc1etoble dllerence) Over the life ol the loon or pool expected cash flows continue lo be estimated II he present volue oI expected cash flows is less than the carrying amount o loss is recorded ff the presen volue of expected co sh Hows Is greater lhon the carrying amount It ls rocognlzed as port o future Interest Income

Dire cl Dnqnclng klse Rrcynhln11middot The results of the Corpotolons equipment loosing acUvUes are recorded within loons on the consolidaled balance shtiel niese direct lino11cing leases provide for lull recovery ol the equipmenl cost over lhe lenn al the lease

The CorporaHons nal Investment in direct Hnanclal leases lscomptlood of lhe lollowtng elements minimum lease payments receivable the esllmated unguaranleed residual value ol the leased equipment at the lease lermnalon dates and unamortized lntiol dlrect costs less unearned Income Estimated guaranteed residual values are revlewed perodicolly to determine [ the cunent ttsthnalc of the equipments fotr value appears to be below Us recorded estlmue If rred )esldual vululS urn adjusted down word lo reflect adjusted estimates of fair market values Upward adjustments lo residual values me nol permitted

Unoomod lncomo fa tho amount bywhlch ho mlnmum caoo paymonts rccclvnblo plus tho osUmotcd unguarantood rosdual valua exceeds the cost of the leased equlpmanlo the inception of lhe lease Uneomed Income ts amortized aver the Initial lease term lo p1oduce a constant rote ol teum on Iha net Investment In lhe lease lnllol direct costs ol ocqultlng a lease are coptallzed when incurred and amortkedover the Ille of the lease consistent with the method used lo recognize Interest Income

The Corporallon evoluotes lhe colectablllly o[ Is leose receivables hosed upon carloln foclors such as hsforlcol colteclon I rends and aging categories Leose receivables ore wrUen of against the allowance or loan losses when the receivable Is determined to be uncollectlbe

AllniulllllU The allovance or loan losses ls a valuaton ollowonce or probable Incurred credit losses Increased by the provislon lor loon losses and decreased by charge ols less rncovetlttS Munogemcnt estltnates the ulowonce bulome requited using past loon loss experience the nature and volume of the portfolio Information aboul specific borrower sluatlons and estimated collateral values economiccondltions and other factors Allocatons o the allowance may be made for specific loons bul ho onllro alowonco Ill ovoilobla or any loan hot Jn monogomonfs judgment should be charged off Loan losses aro charged against the allowance when management believes the uncollectlbllty of a loon balance Is confirmed

The allowance consists al specific and general components The specific oomponent relates lo loons hot ore Individually clossifed os lmpJlred or loans otherwise closslfledos substandard or doubtful The generalcomporenl covers rcgtn dassilled loons and Is based on hlslorleol loss experience odusled for current Iocors

A loon Is lmpored when full payment under he loon terms Is no expected Nonbullhomogeneous loan classes such as commercial and commercial real estate loons and homogeneous loan segments such as mortgage and consumer loons modified as troubled debt restructu1lngs or loons ossocloled with non-homogtineous relationships are lndivkluolly evolualed for lmpomamt 1pound a

loon Is Im poi red o portion of the ullowonce Is allocated so hot Iha loon Is tepo1led net at the p1eoont volue o estimated futurn cash flows using the loans exlstlnQ role orot the fair value ocolloterol ii repay men ls expected solely from the collo1eral Lorge

All dollar amounts In thousands except per shore do1o Unaudited

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

groups of smoler balance homogeneous loons such as consumer and residential real es tale loons are collectively evaluated for impalnoont and accorrlngly they are rot sepomtely identified for lmponnenl disclosures Loans for which the terms have been modiled resulting In o concession and for whch the borrower s experiencing flnorcial difficulties are considmed troubled debt resructurtngs and classified os Impaired

Factors consdurod by manogomonl In dolor mining lmpnlrmont lncluda payment status collatora value and tho prohohUty of collecting scheduled principal ond Interest payments when due Uxlns hat experience lnslgnllloont payment delays and payment shortolls generoly are not clossled as impaired Management determines the significance o payment delays and payment shortfalls on a case-by-case basis toking lnlo consideration all of the cl1cumstancas surrounding the loon and the borrower Including Iha length of the delay the reasons for the delay the borrowers prior payment record and the amount al the shottfoll In re lo lion to lhe prlnclpo ond lnleresl owed

Troubled debt restructurlngs me sepmotely Identified poundor lmpormen disclosures and ore measured at the preoon volue ol estmoed future cash flows using the loons effective rote at Inception lpound a troubled debt restructuring Is considered to be a collateral dependent loan the loon ls reported net o the oir value of the collateral For lroubleddebt restructurlngs that subsequently default thti Corporcton dete1mh1cs the amount a( reserve In occordancu wilh the accounting pollcy for the ollowonce for loon losses

Tho gonorril componontcovots non lmpahcd l=ns ond la hosed rm hsloricol loss oxporlanco adjuod for currant factors Tho hlstorlcol loss experience is de1ermlned by portfolio segment and Is hosed on the actual loss history experienced by the Co1po1alon over the most recent five years For all segments he actual loss experience Is supplemented wlthother economic facto is hosed on the risks present for each porIollo segment These economic foclots Include consideration of the folio wing levels of and trends In delinquances ond lmpored loons levels or and trends In charge-offs and recoveries trends ln volume and terms of loons effects ol any changes In risk selecon and underwrllng slondords olher changes in lending pollces proeedures ond praclkes eperienca oblty ond depth of lending managemonland other relevant staff national and loco economic trends and conditions industry conditions ond efects ol changes In credl ooncanrolions The following portfolio SPgments have been Identified

Comrnerdol - Loons to businesses hat Ole sole proprietorships partnerships limited liobllty companies and corporations These loons ore for commercial Industrial or p1ofessionul purposes The riskcharactctlstics of these loons vory based on the borrowersmiddot business and industry as repoyrent is typically dependent on cash flows gene ruled from the underlying business Within this loon segment the Corporation has identified loon classes of commercial and industrial commercial realestole and commerca kmd devolopmant

Real Estate - Loons to purchase or rellnance single omlly residences The risksassocated vi th this oogmenl ore generally dependent on the ovomU real estate volue environment and Individual payment oblgalons Real estate Is subject to changes In market valuation and can be unsloble fora variety of reasons Within this segment the Corporation hos idenUIJed classes of resldenllol ond home equly loons

Consumer-Term loans or lines olcredlt for the purchase ol consumer goods vehicles or home Improvement The risk characteristics of the loom1 In I his segment vary depending on the type of colateml but generally repayment Is expected from a customerconlnuinQ to generate o cash How I hot supports the calculoted poymentobllgaton Secondary support could involve llqudution o tOlulerol

Loosos-Dirtel Flnanca equipment loaoos Rislchamctoristcs vary hosed horn tho borrowers busnoss and lnduatty as tepaymenl Is typcallydependent upon cash Hows generated ram the bonowers operations Secondary support could Involve repossessing the lensed colloleral

FDIC lndomnjficu The FDIC lndemnlilcoUonosset results from the loss share aQreements In the FDCltzsslsted transocllon The ossel ls measured seporalely from Iha reloed covered osses as they are nol conlroctually embedded 1n lhe assets and ore no transferable wllh the asses should lhe Corpora Hon choose lo dispose of them and represenl the acqulslllon date fair value al expected reimbursements from the FDIC Puisuont lo the arms al the loss sharing ag1eemenl cove rad loons ore subject to a stated loss threshold whereby the FDIC will reimburse the Corporation for 80 of losses Incurred These expected reimbursements do not Include roimburroblo amounts related to future covered expendlures These oosh flows ore discounted to reflect a metric of uncertontyofthe Urning and receipt of the loss shoring reimbursement from the FDIC This asset decreases when losoos aie realized and clohns me submUled lo the FDIC or when customern repay their loons In full and expticOO l=cs do not occur This ossel also Increases when esllma1ed future lossea Increase and decreo6e3 when esttno1ed future losses dec1ease When ostlmotod futuro loon losses lncrcaoo ho Corpomton rccorrls a provision for loon lossos ond lncrcasos Its allowonco for loon lOS009 occordngly The resulting increase In the FDIC lndemnlfcollon ossel Is recorded os on offset to the provision for loon losses During 2Dl4 and 2013 lhe provision for loon losses was offset by S320and Sl266 teloed lo Increases In lhe FDIC lndemnIlcotion asset

All dollar amounts in thousands except per share data Unaudited

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Continued)

otbtH Reg y1qt1 Own ad OREOJmiddot Assets acquired through er IIllltead cf loan forocloouro ore inltlally recorded ot loir value less costs to mill whim ocqulredestabllshlngo llew cost lxms These assets are eubsequentlyoccounted for at lower cl cost or fair value )ass eitlmuled costs to sell 1pound fair value declines subsequent to lo1lltlosurn u valuation allowance is rncorded through expense Oparntna cosLI nfo1 ocqulslUonara expansed

OREO acquled by the Corporation lhtough loon defaults by customers oncove1ed loons or acquired by the Corpomllon as pail oI Its acquisition of New Uherty Banklsoo Note 2 Business Comblnotlonsl me covered under the loss shoring agreement discussed above Pursuant to the etms of the = shodng ag1aemen coveted assets ore subject lo a s lo led loss threshold whereby the FDIC will reimburse the Corporation or 60 of losses Incurred Any gains or losses realized at the time of disposal oro portlolly offset by tho FDIC toss shore and oro roloctcd In Income Al year-end 2JM ond 2013 SO omi$155 ol lha Gorporalions OREO wos subject lo the loss shoring agreement

qulpminl god 1ltauhold lmnroyemenlgbull Lond Is corrled at cosL Premises and equipment ore stoled ot cost less accumulated depreciation generally com puled on the straghtmiddotlne basis over the assets useful llves and over the terms of the lease or the esthnotm useful llves lor leasehold Improvements whichever is shortur

Qmb Surrnndqr Yaluo al J lfo Jnsumncebull ThoC01pornlon hos punhaood Hfohmurnnco pollclas on 001lain key oxccutivos Cash summdor voluo ol lfo Jnsuroncc Is 1ocordrnl ol lho amount thot can ba 1callzod under tho nsuronco controctot tho balonco sheet dole which Is the cash surrender value adjusted for other charges or other amounts due tho tore probable otseltlemenl

lampna-Term Assa1bull Premises and equpmen olher lnlongble assets and other long-term assets 01e rnvewed for Impairment when events indicate heir carrying amount may not be recoverable from future undisccunted cash flows If lmpolred the assets are recorded a fair value

Bepurchgee Agrccmgnj11bull SubsanlolyaI repurchase ng1eement UobiHUos represent amounts advanced by various customers These balances ore not deposits and ore no covered by Jederal deposit lnsuronce SecurUes ore pledged to cover theiie lablllles

Jrcrmfers gl Fingncgl AsGesbull Ifonsfers of financial osselsare accounted for as soles when control over the assets hos been rellnquisbed Control aver transferred ossels Is deerned lo be surrendered when the assets have been isolated from the Corpomlion tho tronsforco ahtolns tho dght U1no of conditions that constmln II Imm taling ad van logo of that right to pledge or cxchango tho tronsforrod assets end tho Corpo1otlon dOCll not maintain cifoctlvc control over tho hansfoncd assets hrough an agreement to repurchase them before their maturity

smck_Enenutllm Compensotlon cost is recognized for stock options and restricted stockawords issued lo employees bosed on the fair value o[ lhese awards at Iha dote 0pound gronL A BlackmiddotScboles model Is ullllzed fo eslmale the folr value cl sled opHons

GompensoUon cost ls recognized over the required service period generally defined as Iha vesting pedod For awards wllh graded veslng compensation cost is rncognlzad on o sralghlmiddotline bosls over the requisite service period for the en Ure award

lncomo TggeBbull Income twc expense fa the total of he current year income tax due or refundable and the chonge In deferwd tux 0sets andlobillties Ikfened toxossels and lobiUlei me he expected future ax amounts poundor the tempomry dUferences btitween cnnying amounts and tax hoses al ossots and lobilltles computed using onoctod lox mos A valuation allowanco IE ncodcd reduces delened tax assets to Iha amount expected o he realized

A tax position is recognized as a benefit only Ell ls more likely than not tho the tax position would be sustained In a lox exominolcn with o tax exomlnatlon beng presumed to occur The amount recognized is the largest amount of tax benellt tho Is grealer than 50 lilelyol being realized on exomnoUon For tax posllions no meellng he Mmore likely hon natM lest no lox benelll Is recorded

The Corpototon recognizes lnterestondor penalties related lo Income tax matters In Income tax expense

QfBglgpcemiddotShMI Ejpgpclgl Jostrumentw Financtol Instruments include off balance-sheet credit Instruments such us

commitments to make loons and stondby lettets cf credl Issued to meet customer Ilnomlng needs The face omoun for these items represents lhe exposure to loss before conslderlng customer collolerolcr oblllty lo repoy Such Iinoncol Instruments ore recorded whon they mo funded

Earnings Per Shattbull Bosc earnings per shorn ls net Income divided by lhe weighted overage number of common shores outslondlngdudng the pedod Diluted earnings per shore Include lhe dilutive effect cf oddltonol potential common shares tssuoble under equity hosed plans

All dollor amounts In thousands excepl per shore data Unaudited

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Conlinucdl

CQw1UUicnelyc Ineqmobull Comprehensive Income conslslll o[ net income and other comprehensivu Income Other comprehensive income ndudus unrealized gains and losses on suurlU avalablu or salu which ore also recognized as separate components ol equly

Lon Cantlngcociosbull Loss contingencies Including claims and Iago ocilons otlsng Jn the ordinary courso of husnass om rocordcd as llobllUes when the likelihood o loss is probable and on amount or long a cf loss con be reasonably estimated Management does not believe there now are such molters that will hove a material elfect on the fnonclol solements

Re1rclpps on Cruhl Cosh on hand or on deposit wllh he Federal Reserve Bonk cf Sl521 and $1312 was required to meal regulatory reserve end clearing requlrnmenls al year end 014 and 2013

fair Yalur cf Engncgl ipdltumenll Fair values o[ llnoncol Instruments ore estimated using relevant market lnFormoion and other assumptions as more fully disclosed In a sepuae note Fair value estimates Involve uncertain Iles orcl matters of sgnlllcont judgment regarding inerest rotes credit risk prepayments and other loctors especiolly ln he absence of brood rno1kets or particular Uems Changes In ossumptlons or In market conditions could sgnillcantly olecl the estimates

Diyjdnnd Bosricljanbull Banking toguotions require molnlainlngcolaln cnpla lovos and nay mil tho dvldonds paid by tho honk to tho holding company or by Iha hodina com pony ta rhmoholdnrs

Reclnsaificalionsbull Some Items In the prior year financial statements were reclassifed to conform lo he current presentation Reclassillcaons had no efec on prior year net Income or shareholdersmiddot equity

ampl9plion gl Nuw Aecgunlng Sgpdgrdsbull In Februory 20[3 lhe FASBomended exlsllng guidance reloled lo reporlng amounts rcclossUiOO out ol accumulated othorcomprohonsivo income Thoso amondmonts do not change tho current rcquiromons or reporting net Income or other comprehensive income In flnonclol statements These amendments require an entity lo provide lnformatlon about the amounts reclassified out of accumuloled olhercomprehenstve Income by componenL In addltlon on entty Is required to present eilher on the loce of the state men where net Income Is presented or In the notes signifconl amounts reclassified cul ol accumulated other comptebensve Income by the respective line Items of nel Income bu only j[ lhe amounl reclassified 1s required under US GAAP to be reclasslfied to ne Income In its entirety in the soma reporting pedod For other amounts that ore not requited under US GAAP to be redassfied In their entirety lo net Income on enlty Is required to crossmiddot mforonoo lo other dlsolosutcs roqutcd under US GAAP that provide addtonal dctals oboul thoso amounts These omondmcnts ore elfeclve prospectively for fiscal yeats and lntedm periods within those years beginning alter December 15 2013 Early adoption Is parmltled The elfecl ol adcptlng his sondard dd no hove a moterlal eleltt on the Corporatons opeioUng results or llnanclal condition

In Decombar 2013 lhu FASB omandcd ho Glossary of lhu Codilicotlon lo include a slnulu dollniton of o public buslnossantly for future uso in US GAAP Tho doFloUon ol a public business enlily will ho used in considodng tho scope of now finonciol gudonco and will identify whether lhe guidance does or does not apply to public business entitles The amendment does not allectexistlng lequ1ements and there Is no elfectlve date The adoption ol lhs sondo1d dld not hove a material effect on the CompanyS operotng rosuls or llnondol condition

lnJonuory2014 the FASB amended existing guidance lo dailfy when a creditor should be conside1ed lo hove tecelved phrJcal possession of rnsidonlol tool oatolo propaty collotomldng o crmsumcr mmtgogo loan such that tho loon should ho dcrccognlzod and tho 1001 estate rccognzcd Thcso amendments dorify that an in substance repossession or foreclosuro occurs end a creditor s considered to have received physcol possession of resldentol reol estate property coloterolldng a consumer morlgoge loon upon ether 11) the credlor oblonlng legal title to the residentlol 1eol estate properly upon completion of a foreclosure or (2) the borrower conveying oil lnlarest In the resldentol real eslae property lo tha credtor to sotsfy that loon through completion of a deed Jn lieu cf foreclosure or through o similar legal ogreemanl Addillonol disclosures ore required These amendmenls ore eHecllve for publc business enUles for annual perJods end Interim periods within those annual parcxls begtnnlngafler December 15 2014 Amendments In th ls stondord con be applied using a modified retrospecUva or prospective transition methcxI Early adoption ls permlted The adoption ol this standard ts not expected to hove a maedol effect on the Componys operating results or llnonciol condtlon

In Moy2014 the FASS amendOO existing guidance realOO la revenue from con1mcis with custame1s 111sumendment supersedes end replaces nearly all existing revenue recognition guidance Including lnduslrymiddotspeclflc gudonco establishes a new conltolshybosod ovonuo mccgnllon modal changos the basis for deciding whon rovonuo is rcccgnizod ovor limo er at a poln In Hrno provides new and more detailed guidance on speclflo epics and expmdsand Improves disclosures about 1evenue In oddllion his amendment specfes lhe accounting for some costs to obtain or fulfll a contract with a customer These omendmenls ore elfectlva for annual IeportJng periods beginning ofter December 15 2016 lncludng Interim periods within that reporting per Joel Early oppllcolonls net permitted The amendments should be applied retrospectively 1o all periods presented or retrospectively wllh lhe cumulaHve effect recognized ol lhe dole o[ lnllol oppllcotlon The Company Is currenlly evoluollng tho Im po cl of his new occaunUng standard on Iha consolidated financial solornonts

All dollar omounts In thousands except per shore data Unoudtted

Ervin Leasing Business Combination

On January l 2013 the Corporotonacquhed 100 of the outstanding common shares of Ervin Leosng Corporation In exchange for cash lo toling $4622 Under the erms of he acqulsltlon oll common shareholders rncelvtgtd cash equal ta tatul equity o Ervin Leoslng as of December31 2012 plus $600 Ervin Leosing Company results of operotlons ware Included In the Corpomlans rnsults bognnlng Janumy l 2013 As al July l 2014 Ervin Locmng Company ronamcd and rabmndod to Unifi Equlpmon Flnanco

The following able summarizes the consdetollon paid for Ervin Leosng Company ond Iha omounts ol lhe assets ocqulrnd and llobUias ossumad recognized al he ocqusUon dote

Consderalon Cabullh

For Value of Total Conslderollon Transferred

Recognized amounts of Identifiable assets acgulred and Uabllites assumed

Gosh and cash equivalents Direct llnoncng leases Noncompeta agreement Dlharossels

Tola assets a ired

Notes payoble Other labHUes

Totol lobllltcs assumed

Total idenlfloble net assets

4622 4622

366 11304

100 l098

12BSB

7514

732 8246

4622

No goodwill or olher lnlanglble ossels beyond lhe noncompale agreement above warn generoled as par of lhe Ervin Leosing business combinotlon

New Llbe1ty Business Combnaton

On May 14 2010 the Corporation enterecl into a purchaie nnd ossutnpton agreement (Naw Llbetty Agreement) with the Federal Deposit lnsuranco Corpomlion FDIC) as rncclvor purs1mnl to which tho Corpomton mqulrcd cctlan asts ondassumcd subslontaJy oll o[ the deposits and cetlan lobUtias of New Llbarty Bon(Naw Liberty) New Liberty ope roted one bonklngcanar In Plymouth Michigan

In connecton with the New Liberty ocquslon the Corporaton entered lnlo a loss shoring ograamenlwlth the FDIC that covers mos of New Llbarlys ossels hosed upon the sellers records Including single family resldental marlgoge loons commerciol rool es1ate and commercial and ndustriol loons and OREO (collectvely covered assets) The loss shoring agreements are subject lo certan servicing procedures as sped fled in agreements wllh the FDIC The loss shoring agreements opplicable to sngle family residential morigoge loons provide for FDIC loss sharing ond Corporation reimbursement to tho FDIC for ten years The Joss sharing agreemens oppllcoble to all other covered assets provide for FDIC loss shoring for llva years and Corporation ralmbursomonl of recove1les lo he FDIC far elght yeurs The eXpgtcted Jembursements under the loss sharing ug1eements were recorded us an lndemniUcoHonosset al an esHmated fair value of $15949 on the acqutsiliondote whch represented the present volue oI the oxpoctcd nelcnsh rohnbursomon rolalod lo tho lolS shoring ogmomonls

The CorpotoHon acquired cetlan olhar New Llbarty assets nolcova1ed by Iha loss shoring ogreemenl wlh Iha FDC includlng =sh and secutlles purchased ot lalrvolue At acqusUon lnogg1egole loons ocquled hod on unpaid principal balance oS9mand a lar volue o$69JXl9 and deposits assumed hod o bolo nee of $90l 17

Alldolloramounta In lhousands except par share dala Unaudled

ADDITIONAL INFORMATION

We hove Included ltnonciol inlormotion for Iha yaarendftd Decamber31 2014 Our full ftnancol statements Including noes wem audited by Crowe Horwath our independent publkaccountont ond Crowe Horwath goveon unquallfled oplnon The compeo audited flnondol stataments Including the oudUors opnlon and notes ore avoloble upon request

11 you would lile o copy of the audled financial stolemenls or If you have any quesUons concerning the annual meeting pease con la ct your bank pmsdonl TI mo thy G Marshall at 125 South Filth Avonuo PO Box 8009 Ann Arbor Michigan 4BID7

All dollar omounts In thousands except par share data Unaudited

Officers

Executive Management

Timothy G MarshoJI Presidentamp Chief Execulive Ofllcer

Charles E Crone fr Execullve Vice President amp Chief Revenue Officer

Pall H Jud11on ExecuUve Vice Presfdenl amp Chfef Opera Ung Officer

Lyle r Dahlberg First Vice President Trust amp Invesmenl Group Manarier

Cynlha Livesay Firs Vice Presidenl Credi Administration

Mark J Slade First Vice Presfdenl amp Chief Financial Ofllcer

Mortgage Retail amp Privatbull Banking Services

Patrlck A Tamblyn Senior Vice President Private Banking Manager

Klrsly E Haholan Vice Presldenl amp Mortgage De[Xlrlmenf Manager

Amnndo M Harl Vice Presden Administration amp Opemtfons

Kimberly A Clugston Vice President amp Senior Mortgage Loon Officer

Linda S Brewer Vice President amp Private Banking 0ffcer

Mary Hays Vice Presden Private Bonling Officer

Chmles W CracrcrH Vice President Befall Moitgage Soles Manager

Curl DEnt Vice President amp Morgaga Loan Officer

Christine G Hold Vice Presfdenl Cash Management

Krltlna L Moyer Vice Presden amp Plymoulh Branch Manager

Joan C Hendrlck1 Vice President amp Main Office Brandi Manager

Kevin M Kramer Vice Pzesidenl Pcivale Banking OWrer

Denise J Sialleld Vice Presden amp Marlgage Loon Officer

Dennis D Ticknor Esworh Ofnce Branch Manager amp Health Savings Account Specialist

David K Pote Ypsilanti OfJee Branch Manager

Shelley L Rankin Saline Office Branch Manager

foseph D Croigmile Motlgorc Loon OfJeer

Kevin C Salley Morgage Loan OfJeer

William E Smith fr Mortgage Loan OfJrer

Sondra L Bccver Deposit Operations Offirer

Stoey B fohnson Sr Relolionsl1ip Banking Ollicer

Kimberly K Snow Relalionship Banking amp Cash Management Oflfcer

FinanC9

Lha AMason Vice Presidenl amp Infernal Auditor

Jame$ A Miller Vice President amp Dfreclor Human Resources

Bmbcrro L Morrison VicePresiden

Bella MFemondez Assisan Vira President amp Accounting Oflicer

Trust amp Investment Monagemcnl

Thomas R Kalloword First Vice President amp Senior Trusl Olflror

Stephen J Seymour Senior Vice Presden amp Senior Investment Olflcer

Sonia S Perle Senior Vice Presidenl amp Investment 0[cer

Cothlcon L Savoie Senior Vice Prosldont amp nvestmenl Offrer

Margaret L Vogel Vice President amp Trusl OfJcer

Erin E Archambault Vice President Trust Operations

Eric P Helbm Vice Presidenl amp Director of Business Development

Deborah A Jones Vice President amp Business Developmen Officer

Jacqueline Jenkins Vira Presidenl Portfolio Manager amp Businoss Dovclopmcnl Ollcor

Mllzl J Talon Vice President amp Trust Offlrer

Diano S Winner Vice President amp Investment Officer

Sarah Dobson Campbell TrusOffcer

MarkA Sklfl lnveslmenl Oflicer

Commercial Lending

Walto r G Byes Presden Saline District

Michael L Michon President Plymouth Districl

Michael H Chotos President Ypsilanti Districl

Mlrhuel A Cole Group President Technology Industry Group

Sall sh B Jost Senior Vice President amp Senior Loon Officer

Hons W Maler Senior Vice President SpeclolY Banking

David A Guenther Vice President amp Sonier Loon Officer

Robert R Roiie Vice Prcsldenl amp Senior Loon Ofllcer

Mork D Bally Vice Presldenl amp Commercial LoonOfflrer

Jonathon P Bowdler Vico Prrsidcnl amp Commercial Real Estate Manager

Jomes J Plummer Vice President amp Cormnerciol Loon Olicer

Mork H Holtz VicePresidenl TechnoloQy Industry Group

Information System1

Jeffrey J Stanton Vice Presden I amp ChiefTechnalogyOficer

Marketing

Jonke M Ortbrlng Vice President amp Marketing Department Manager

Cwdil Administration

Dawn M Prescott Senior Vice President amp Managed Assets Offirer

Trina M VonNesl Vice Prellden amp Credi Manager

Stephania N Hnnigan Assistant Vire President Consumer Credll amp Compliance

Soro L Hoffman Assistant Vice President amp Small Business Lending Offirer

Pamela f Wetzel Credi Atlminislrolion Officer

Compliance

Susan E Wcrgnor Vice Presfden Compliance 01icer amp Compliance Department Manager

John E Fosler Vice Presden I BSA OFAC amp Security Olirer

Brion J Powers Asslstanl Vice Piesden BSA amp Security Special isl

Cynthia K Shacllor BSASecurity Admlnlstralve Oficer

Unifi Eq11ipmbullnl Finance

Raymond J Grimshaw President amp Chief Ixcculva Olliccr

Thomaii J Conzolmmm Secretary Treasurer amp Chief Financial Officer

Directors

Thomas P Bo1dere Ptesdenl Midtown Group Inc

Jan L Garfinkle founder amp Manarlng Director Arborelum Ventures

Isadore J King President amp Chief Executive Officer Synergy Partners LLC

Timolhy G Marshcrll President amp Chief Execulfve Olflcet Bank of Ann Arbor

Michael C Martin Vice Presidenl Firs MarUn Corporalon

William C Martin Chairman Athletic Director Emeritus University of Michigan

Erneel G Perich Presden Perich + Partnets Ltd

David R Sams Mcrnaging Partner 360 Advisors LLC

Joseph A Sos Owner Ses Moors Inc

Cynthia H Wilbanks Vice President for Government Relalons University of Micbfgan

Jelfrey S Williams Chairman amp Chief fxeculve Offfcer Tangent Medical Technologies NeuMoDx Molecular Tnc

Directors EmcritU6

Jomes WAndorson Jr President The Anderson Assodoles

Richard P Eldswick Foundfnrr Diteclor Arbor Partners

Jun Barney Newman Vice Presiden Ann Arbor Dlslrfcl Ubrary Bocrrd

Rlchord N Robb DDS Regan Emeritus Eastern Michigan University

Downtown Ann Arbor

125 South Fifth Avenue

Ann Arbor MI 48104 7346621600

Downtown Saline

1 79 East Michigan Avenue

Saline MI 48176 7344705001

Downtown Ypsilanti

7 West Michigan Avenue Ypsilanti MI 48197 7344859400

boa acom

Ellsworth Rd amp Airport Blvd

801 West Ellsworth Road Ann Arbor MI 48108 7346698900

Plymouth

1333 West Ann Arbor Road

Plymouth MI 48170 734455 1 5 1 1

Stadium Blvd amp Liberty St

2204 West Stadium Boulevard Ann Arbor MI 48103 734822 1 900

Traver Village Shopping Center

2601 Plymouth Road

Ann Arbor MI 48105 7346623800

EQUAl HOUSIMG LENDER

SUMMARY OF SIGNIFICANT ACCOUNTING POLICJES Continued)

on all loans Is generally dllconUnued al the Ume the loan Is 90 days delinquent unless the credit Is well-secuted and Jn process ofcallecUon In all cases loans ore placed on nonaccrualor charged-oil at an oorUer dole JI collection ol prtncpa] or lnleresl Is considered doubtful All Inlet est occrued but no received for loans placed on nonoccruol Is reversed against Interns Income Inleresl received on such Joans ls occounled for on lhe ooshmiddotbosls or cos recovery melhod unlll qualllylng for return lo accrual

Loons ore rel urned to 0ccruol salus when oll lhe p1lnctpal ond interest amounts conlracluollydue me brought current and [ulure payments ore reasonably assured

Cpyornd Ipgnsbull Loans acquired in 2010 In a Federal Deposit Insurance Corporation (FD)C)-asslsted transaction are oovered under a loss sharing agreembullmtandore refoned lo as middotcovered loansmiddot Pursuant lo lhti trms or thti loss shoring agreem1mts covtired loons are subacl lo a stated loss threshold whereby Iha FDIC will reimburse the Corporaton [or BO of IOSStls incuned The Corporation will 1eimbursa he FDIC for Its share of recoverlm with respect lo losses poundor which the FDIC paid the Corporalon a mlmbmoomont undor tho loss sharing og1oomont Tho FDICs obllgolon to rolmhurso tho Cotpotc1lion for ]()SS()S with raspcct lo covered loon begins with the first dollar of loss incurred

Coveted loons warn recorded at far value al the time of acquston Fair values for covered loons are hosed on a dscounted cash flow methodology lhotconsdered various actors Including the type of loonond related collalerol dossflcatlon status fixed or votiobla inleresl role tlm10I loan and whehtir or nol lhe loan was omorlirlng and o discoun ralti reltJClin11 the Corporolionmiddots osoossmont of risk inhomnl in tho cosh llow cslmoos Covorcd loons woro gruupod tcuolhcr according to smilor choroccrisUcs

ond were treated in the aggregate when opplylng various voluaon technlques

AIJlurchose certain covered loons had evidence of credlt deterioration since orlgnolion These loons ore accounted lor lndMdually The Corporation estimates lhe amount and timing of expected cash flows for each purchased loan and the expected cash flows in excess olomount pold Is recorded as Interest Income over the remaining life of he loon or pool (occretable yield) The excess of the loons or pools contractual principal and Interest over expected cash Hows Is not recorded (nonocc1etoble dllerence) Over the life ol the loon or pool expected cash flows continue lo be estimated II he present volue oI expected cash flows is less than the carrying amount o loss is recorded ff the presen volue of expected co sh Hows Is greater lhon the carrying amount It ls rocognlzed as port o future Interest Income

Dire cl Dnqnclng klse Rrcynhln11middot The results of the Corpotolons equipment loosing acUvUes are recorded within loons on the consolidaled balance shtiel niese direct lino11cing leases provide for lull recovery ol the equipmenl cost over lhe lenn al the lease

The CorporaHons nal Investment in direct Hnanclal leases lscomptlood of lhe lollowtng elements minimum lease payments receivable the esllmated unguaranleed residual value ol the leased equipment at the lease lermnalon dates and unamortized lntiol dlrect costs less unearned Income Estimated guaranteed residual values are revlewed perodicolly to determine [ the cunent ttsthnalc of the equipments fotr value appears to be below Us recorded estlmue If rred )esldual vululS urn adjusted down word lo reflect adjusted estimates of fair market values Upward adjustments lo residual values me nol permitted

Unoomod lncomo fa tho amount bywhlch ho mlnmum caoo paymonts rccclvnblo plus tho osUmotcd unguarantood rosdual valua exceeds the cost of the leased equlpmanlo the inception of lhe lease Uneomed Income ts amortized aver the Initial lease term lo p1oduce a constant rote ol teum on Iha net Investment In lhe lease lnllol direct costs ol ocqultlng a lease are coptallzed when incurred and amortkedover the Ille of the lease consistent with the method used lo recognize Interest Income

The Corporallon evoluotes lhe colectablllly o[ Is leose receivables hosed upon carloln foclors such as hsforlcol colteclon I rends and aging categories Leose receivables ore wrUen of against the allowance or loan losses when the receivable Is determined to be uncollectlbe

AllniulllllU The allovance or loan losses ls a valuaton ollowonce or probable Incurred credit losses Increased by the provislon lor loon losses and decreased by charge ols less rncovetlttS Munogemcnt estltnates the ulowonce bulome requited using past loon loss experience the nature and volume of the portfolio Information aboul specific borrower sluatlons and estimated collateral values economiccondltions and other factors Allocatons o the allowance may be made for specific loons bul ho onllro alowonco Ill ovoilobla or any loan hot Jn monogomonfs judgment should be charged off Loan losses aro charged against the allowance when management believes the uncollectlbllty of a loon balance Is confirmed

The allowance consists al specific and general components The specific oomponent relates lo loons hot ore Individually clossifed os lmpJlred or loans otherwise closslfledos substandard or doubtful The generalcomporenl covers rcgtn dassilled loons and Is based on hlslorleol loss experience odusled for current Iocors

A loon Is lmpored when full payment under he loon terms Is no expected Nonbullhomogeneous loan classes such as commercial and commercial real estate loons and homogeneous loan segments such as mortgage and consumer loons modified as troubled debt restructu1lngs or loons ossocloled with non-homogtineous relationships are lndivkluolly evolualed for lmpomamt 1pound a

loon Is Im poi red o portion of the ullowonce Is allocated so hot Iha loon Is tepo1led net at the p1eoont volue o estimated futurn cash flows using the loans exlstlnQ role orot the fair value ocolloterol ii repay men ls expected solely from the collo1eral Lorge

All dollar amounts In thousands except per shore do1o Unaudited

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

groups of smoler balance homogeneous loons such as consumer and residential real es tale loons are collectively evaluated for impalnoont and accorrlngly they are rot sepomtely identified for lmponnenl disclosures Loans for which the terms have been modiled resulting In o concession and for whch the borrower s experiencing flnorcial difficulties are considmed troubled debt resructurtngs and classified os Impaired

Factors consdurod by manogomonl In dolor mining lmpnlrmont lncluda payment status collatora value and tho prohohUty of collecting scheduled principal ond Interest payments when due Uxlns hat experience lnslgnllloont payment delays and payment shortolls generoly are not clossled as impaired Management determines the significance o payment delays and payment shortfalls on a case-by-case basis toking lnlo consideration all of the cl1cumstancas surrounding the loon and the borrower Including Iha length of the delay the reasons for the delay the borrowers prior payment record and the amount al the shottfoll In re lo lion to lhe prlnclpo ond lnleresl owed

Troubled debt restructurlngs me sepmotely Identified poundor lmpormen disclosures and ore measured at the preoon volue ol estmoed future cash flows using the loons effective rote at Inception lpound a troubled debt restructuring Is considered to be a collateral dependent loan the loon ls reported net o the oir value of the collateral For lroubleddebt restructurlngs that subsequently default thti Corporcton dete1mh1cs the amount a( reserve In occordancu wilh the accounting pollcy for the ollowonce for loon losses

Tho gonorril componontcovots non lmpahcd l=ns ond la hosed rm hsloricol loss oxporlanco adjuod for currant factors Tho hlstorlcol loss experience is de1ermlned by portfolio segment and Is hosed on the actual loss history experienced by the Co1po1alon over the most recent five years For all segments he actual loss experience Is supplemented wlthother economic facto is hosed on the risks present for each porIollo segment These economic foclots Include consideration of the folio wing levels of and trends In delinquances ond lmpored loons levels or and trends In charge-offs and recoveries trends ln volume and terms of loons effects ol any changes In risk selecon and underwrllng slondords olher changes in lending pollces proeedures ond praclkes eperienca oblty ond depth of lending managemonland other relevant staff national and loco economic trends and conditions industry conditions ond efects ol changes In credl ooncanrolions The following portfolio SPgments have been Identified

Comrnerdol - Loons to businesses hat Ole sole proprietorships partnerships limited liobllty companies and corporations These loons ore for commercial Industrial or p1ofessionul purposes The riskcharactctlstics of these loons vory based on the borrowersmiddot business and industry as repoyrent is typically dependent on cash flows gene ruled from the underlying business Within this loon segment the Corporation has identified loon classes of commercial and industrial commercial realestole and commerca kmd devolopmant

Real Estate - Loons to purchase or rellnance single omlly residences The risksassocated vi th this oogmenl ore generally dependent on the ovomU real estate volue environment and Individual payment oblgalons Real estate Is subject to changes In market valuation and can be unsloble fora variety of reasons Within this segment the Corporation hos idenUIJed classes of resldenllol ond home equly loons

Consumer-Term loans or lines olcredlt for the purchase ol consumer goods vehicles or home Improvement The risk characteristics of the loom1 In I his segment vary depending on the type of colateml but generally repayment Is expected from a customerconlnuinQ to generate o cash How I hot supports the calculoted poymentobllgaton Secondary support could involve llqudution o tOlulerol

Loosos-Dirtel Flnanca equipment loaoos Rislchamctoristcs vary hosed horn tho borrowers busnoss and lnduatty as tepaymenl Is typcallydependent upon cash Hows generated ram the bonowers operations Secondary support could Involve repossessing the lensed colloleral

FDIC lndomnjficu The FDIC lndemnlilcoUonosset results from the loss share aQreements In the FDCltzsslsted transocllon The ossel ls measured seporalely from Iha reloed covered osses as they are nol conlroctually embedded 1n lhe assets and ore no transferable wllh the asses should lhe Corpora Hon choose lo dispose of them and represenl the acqulslllon date fair value al expected reimbursements from the FDIC Puisuont lo the arms al the loss sharing ag1eemenl cove rad loons ore subject to a stated loss threshold whereby the FDIC will reimburse the Corporation for 80 of losses Incurred These expected reimbursements do not Include roimburroblo amounts related to future covered expendlures These oosh flows ore discounted to reflect a metric of uncertontyofthe Urning and receipt of the loss shoring reimbursement from the FDIC This asset decreases when losoos aie realized and clohns me submUled lo the FDIC or when customern repay their loons In full and expticOO l=cs do not occur This ossel also Increases when esllma1ed future lossea Increase and decreo6e3 when esttno1ed future losses dec1ease When ostlmotod futuro loon losses lncrcaoo ho Corpomton rccorrls a provision for loon lossos ond lncrcasos Its allowonco for loon lOS009 occordngly The resulting increase In the FDIC lndemnlfcollon ossel Is recorded os on offset to the provision for loon losses During 2Dl4 and 2013 lhe provision for loon losses was offset by S320and Sl266 teloed lo Increases In lhe FDIC lndemnIlcotion asset

All dollar amounts in thousands except per share data Unaudited

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Continued)

otbtH Reg y1qt1 Own ad OREOJmiddot Assets acquired through er IIllltead cf loan forocloouro ore inltlally recorded ot loir value less costs to mill whim ocqulredestabllshlngo llew cost lxms These assets are eubsequentlyoccounted for at lower cl cost or fair value )ass eitlmuled costs to sell 1pound fair value declines subsequent to lo1lltlosurn u valuation allowance is rncorded through expense Oparntna cosLI nfo1 ocqulslUonara expansed

OREO acquled by the Corporation lhtough loon defaults by customers oncove1ed loons or acquired by the Corpomllon as pail oI Its acquisition of New Uherty Banklsoo Note 2 Business Comblnotlonsl me covered under the loss shoring agreement discussed above Pursuant to the etms of the = shodng ag1aemen coveted assets ore subject lo a s lo led loss threshold whereby the FDIC will reimburse the Corporation or 60 of losses Incurred Any gains or losses realized at the time of disposal oro portlolly offset by tho FDIC toss shore and oro roloctcd In Income Al year-end 2JM ond 2013 SO omi$155 ol lha Gorporalions OREO wos subject lo the loss shoring agreement

qulpminl god 1ltauhold lmnroyemenlgbull Lond Is corrled at cosL Premises and equipment ore stoled ot cost less accumulated depreciation generally com puled on the straghtmiddotlne basis over the assets useful llves and over the terms of the lease or the esthnotm useful llves lor leasehold Improvements whichever is shortur

Qmb Surrnndqr Yaluo al J lfo Jnsumncebull ThoC01pornlon hos punhaood Hfohmurnnco pollclas on 001lain key oxccutivos Cash summdor voluo ol lfo Jnsuroncc Is 1ocordrnl ol lho amount thot can ba 1callzod under tho nsuronco controctot tho balonco sheet dole which Is the cash surrender value adjusted for other charges or other amounts due tho tore probable otseltlemenl

lampna-Term Assa1bull Premises and equpmen olher lnlongble assets and other long-term assets 01e rnvewed for Impairment when events indicate heir carrying amount may not be recoverable from future undisccunted cash flows If lmpolred the assets are recorded a fair value

Bepurchgee Agrccmgnj11bull SubsanlolyaI repurchase ng1eement UobiHUos represent amounts advanced by various customers These balances ore not deposits and ore no covered by Jederal deposit lnsuronce SecurUes ore pledged to cover theiie lablllles

Jrcrmfers gl Fingncgl AsGesbull Ifonsfers of financial osselsare accounted for as soles when control over the assets hos been rellnquisbed Control aver transferred ossels Is deerned lo be surrendered when the assets have been isolated from the Corpomlion tho tronsforco ahtolns tho dght U1no of conditions that constmln II Imm taling ad van logo of that right to pledge or cxchango tho tronsforrod assets end tho Corpo1otlon dOCll not maintain cifoctlvc control over tho hansfoncd assets hrough an agreement to repurchase them before their maturity

smck_Enenutllm Compensotlon cost is recognized for stock options and restricted stockawords issued lo employees bosed on the fair value o[ lhese awards at Iha dote 0pound gronL A BlackmiddotScboles model Is ullllzed fo eslmale the folr value cl sled opHons

GompensoUon cost ls recognized over the required service period generally defined as Iha vesting pedod For awards wllh graded veslng compensation cost is rncognlzad on o sralghlmiddotline bosls over the requisite service period for the en Ure award

lncomo TggeBbull Income twc expense fa the total of he current year income tax due or refundable and the chonge In deferwd tux 0sets andlobillties Ikfened toxossels and lobiUlei me he expected future ax amounts poundor the tempomry dUferences btitween cnnying amounts and tax hoses al ossots and lobilltles computed using onoctod lox mos A valuation allowanco IE ncodcd reduces delened tax assets to Iha amount expected o he realized

A tax position is recognized as a benefit only Ell ls more likely than not tho the tax position would be sustained In a lox exominolcn with o tax exomlnatlon beng presumed to occur The amount recognized is the largest amount of tax benellt tho Is grealer than 50 lilelyol being realized on exomnoUon For tax posllions no meellng he Mmore likely hon natM lest no lox benelll Is recorded

The Corpototon recognizes lnterestondor penalties related lo Income tax matters In Income tax expense

QfBglgpcemiddotShMI Ejpgpclgl Jostrumentw Financtol Instruments include off balance-sheet credit Instruments such us

commitments to make loons and stondby lettets cf credl Issued to meet customer Ilnomlng needs The face omoun for these items represents lhe exposure to loss before conslderlng customer collolerolcr oblllty lo repoy Such Iinoncol Instruments ore recorded whon they mo funded

Earnings Per Shattbull Bosc earnings per shorn ls net Income divided by lhe weighted overage number of common shores outslondlngdudng the pedod Diluted earnings per shore Include lhe dilutive effect cf oddltonol potential common shares tssuoble under equity hosed plans

All dollor amounts In thousands excepl per shore data Unaudited

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Conlinucdl

CQw1UUicnelyc Ineqmobull Comprehensive Income conslslll o[ net income and other comprehensivu Income Other comprehensive income ndudus unrealized gains and losses on suurlU avalablu or salu which ore also recognized as separate components ol equly

Lon Cantlngcociosbull Loss contingencies Including claims and Iago ocilons otlsng Jn the ordinary courso of husnass om rocordcd as llobllUes when the likelihood o loss is probable and on amount or long a cf loss con be reasonably estimated Management does not believe there now are such molters that will hove a material elfect on the fnonclol solements

Re1rclpps on Cruhl Cosh on hand or on deposit wllh he Federal Reserve Bonk cf Sl521 and $1312 was required to meal regulatory reserve end clearing requlrnmenls al year end 014 and 2013

fair Yalur cf Engncgl ipdltumenll Fair values o[ llnoncol Instruments ore estimated using relevant market lnFormoion and other assumptions as more fully disclosed In a sepuae note Fair value estimates Involve uncertain Iles orcl matters of sgnlllcont judgment regarding inerest rotes credit risk prepayments and other loctors especiolly ln he absence of brood rno1kets or particular Uems Changes In ossumptlons or In market conditions could sgnillcantly olecl the estimates

Diyjdnnd Bosricljanbull Banking toguotions require molnlainlngcolaln cnpla lovos and nay mil tho dvldonds paid by tho honk to tho holding company or by Iha hodina com pony ta rhmoholdnrs

Reclnsaificalionsbull Some Items In the prior year financial statements were reclassifed to conform lo he current presentation Reclassillcaons had no efec on prior year net Income or shareholdersmiddot equity

ampl9plion gl Nuw Aecgunlng Sgpdgrdsbull In Februory 20[3 lhe FASBomended exlsllng guidance reloled lo reporlng amounts rcclossUiOO out ol accumulated othorcomprohonsivo income Thoso amondmonts do not change tho current rcquiromons or reporting net Income or other comprehensive income In flnonclol statements These amendments require an entity lo provide lnformatlon about the amounts reclassified out of accumuloled olhercomprehenstve Income by componenL In addltlon on entty Is required to present eilher on the loce of the state men where net Income Is presented or In the notes signifconl amounts reclassified cul ol accumulated other comptebensve Income by the respective line Items of nel Income bu only j[ lhe amounl reclassified 1s required under US GAAP to be reclasslfied to ne Income In its entirety in the soma reporting pedod For other amounts that ore not requited under US GAAP to be redassfied In their entirety lo net Income on enlty Is required to crossmiddot mforonoo lo other dlsolosutcs roqutcd under US GAAP that provide addtonal dctals oboul thoso amounts These omondmcnts ore elfeclve prospectively for fiscal yeats and lntedm periods within those years beginning alter December 15 2013 Early adoption Is parmltled The elfecl ol adcptlng his sondard dd no hove a moterlal eleltt on the Corporatons opeioUng results or llnanclal condition

In Decombar 2013 lhu FASB omandcd ho Glossary of lhu Codilicotlon lo include a slnulu dollniton of o public buslnossantly for future uso in US GAAP Tho doFloUon ol a public business enlily will ho used in considodng tho scope of now finonciol gudonco and will identify whether lhe guidance does or does not apply to public business entitles The amendment does not allectexistlng lequ1ements and there Is no elfectlve date The adoption ol lhs sondo1d dld not hove a material effect on the CompanyS operotng rosuls or llnondol condition

lnJonuory2014 the FASB amended existing guidance lo dailfy when a creditor should be conside1ed lo hove tecelved phrJcal possession of rnsidonlol tool oatolo propaty collotomldng o crmsumcr mmtgogo loan such that tho loon should ho dcrccognlzod and tho 1001 estate rccognzcd Thcso amendments dorify that an in substance repossession or foreclosuro occurs end a creditor s considered to have received physcol possession of resldentol reol estate property coloterolldng a consumer morlgoge loon upon ether 11) the credlor oblonlng legal title to the residentlol 1eol estate properly upon completion of a foreclosure or (2) the borrower conveying oil lnlarest In the resldentol real eslae property lo tha credtor to sotsfy that loon through completion of a deed Jn lieu cf foreclosure or through o similar legal ogreemanl Addillonol disclosures ore required These amendmenls ore eHecllve for publc business enUles for annual perJods end Interim periods within those annual parcxls begtnnlngafler December 15 2014 Amendments In th ls stondord con be applied using a modified retrospecUva or prospective transition methcxI Early adoption ls permlted The adoption ol this standard ts not expected to hove a maedol effect on the Componys operating results or llnonciol condtlon

In Moy2014 the FASS amendOO existing guidance realOO la revenue from con1mcis with custame1s 111sumendment supersedes end replaces nearly all existing revenue recognition guidance Including lnduslrymiddotspeclflc gudonco establishes a new conltolshybosod ovonuo mccgnllon modal changos the basis for deciding whon rovonuo is rcccgnizod ovor limo er at a poln In Hrno provides new and more detailed guidance on speclflo epics and expmdsand Improves disclosures about 1evenue In oddllion his amendment specfes lhe accounting for some costs to obtain or fulfll a contract with a customer These omendmenls ore elfectlva for annual IeportJng periods beginning ofter December 15 2016 lncludng Interim periods within that reporting per Joel Early oppllcolonls net permitted The amendments should be applied retrospectively 1o all periods presented or retrospectively wllh lhe cumulaHve effect recognized ol lhe dole o[ lnllol oppllcotlon The Company Is currenlly evoluollng tho Im po cl of his new occaunUng standard on Iha consolidated financial solornonts

All dollar omounts In thousands except per shore data Unoudtted

Ervin Leasing Business Combination

On January l 2013 the Corporotonacquhed 100 of the outstanding common shares of Ervin Leosng Corporation In exchange for cash lo toling $4622 Under the erms of he acqulsltlon oll common shareholders rncelvtgtd cash equal ta tatul equity o Ervin Leoslng as of December31 2012 plus $600 Ervin Leosing Company results of operotlons ware Included In the Corpomlans rnsults bognnlng Janumy l 2013 As al July l 2014 Ervin Locmng Company ronamcd and rabmndod to Unifi Equlpmon Flnanco

The following able summarizes the consdetollon paid for Ervin Leosng Company ond Iha omounts ol lhe assets ocqulrnd and llobUias ossumad recognized al he ocqusUon dote

Consderalon Cabullh

For Value of Total Conslderollon Transferred

Recognized amounts of Identifiable assets acgulred and Uabllites assumed

Gosh and cash equivalents Direct llnoncng leases Noncompeta agreement Dlharossels

Tola assets a ired

Notes payoble Other labHUes

Totol lobllltcs assumed

Total idenlfloble net assets

4622 4622

366 11304

100 l098

12BSB

7514

732 8246

4622

No goodwill or olher lnlanglble ossels beyond lhe noncompale agreement above warn generoled as par of lhe Ervin Leosing business combinotlon

New Llbe1ty Business Combnaton

On May 14 2010 the Corporation enterecl into a purchaie nnd ossutnpton agreement (Naw Llbetty Agreement) with the Federal Deposit lnsuranco Corpomlion FDIC) as rncclvor purs1mnl to which tho Corpomton mqulrcd cctlan asts ondassumcd subslontaJy oll o[ the deposits and cetlan lobUtias of New Llbarty Bon(Naw Liberty) New Liberty ope roted one bonklngcanar In Plymouth Michigan

In connecton with the New Liberty ocquslon the Corporaton entered lnlo a loss shoring ograamenlwlth the FDIC that covers mos of New Llbarlys ossels hosed upon the sellers records Including single family resldental marlgoge loons commerciol rool es1ate and commercial and ndustriol loons and OREO (collectvely covered assets) The loss shoring agreements are subject lo certan servicing procedures as sped fled in agreements wllh the FDIC The loss shoring agreements opplicable to sngle family residential morigoge loons provide for FDIC loss sharing ond Corporation reimbursement to tho FDIC for ten years The Joss sharing agreemens oppllcoble to all other covered assets provide for FDIC loss shoring for llva years and Corporation ralmbursomonl of recove1les lo he FDIC far elght yeurs The eXpgtcted Jembursements under the loss sharing ug1eements were recorded us an lndemniUcoHonosset al an esHmated fair value of $15949 on the acqutsiliondote whch represented the present volue oI the oxpoctcd nelcnsh rohnbursomon rolalod lo tho lolS shoring ogmomonls

The CorpotoHon acquired cetlan olhar New Llbarty assets nolcova1ed by Iha loss shoring ogreemenl wlh Iha FDC includlng =sh and secutlles purchased ot lalrvolue At acqusUon lnogg1egole loons ocquled hod on unpaid principal balance oS9mand a lar volue o$69JXl9 and deposits assumed hod o bolo nee of $90l 17

Alldolloramounta In lhousands except par share dala Unaudled

ADDITIONAL INFORMATION

We hove Included ltnonciol inlormotion for Iha yaarendftd Decamber31 2014 Our full ftnancol statements Including noes wem audited by Crowe Horwath our independent publkaccountont ond Crowe Horwath goveon unquallfled oplnon The compeo audited flnondol stataments Including the oudUors opnlon and notes ore avoloble upon request

11 you would lile o copy of the audled financial stolemenls or If you have any quesUons concerning the annual meeting pease con la ct your bank pmsdonl TI mo thy G Marshall at 125 South Filth Avonuo PO Box 8009 Ann Arbor Michigan 4BID7

All dollar omounts In thousands except par share data Unaudited

Officers

Executive Management

Timothy G MarshoJI Presidentamp Chief Execulive Ofllcer

Charles E Crone fr Execullve Vice President amp Chief Revenue Officer

Pall H Jud11on ExecuUve Vice Presfdenl amp Chfef Opera Ung Officer

Lyle r Dahlberg First Vice President Trust amp Invesmenl Group Manarier

Cynlha Livesay Firs Vice Presidenl Credi Administration

Mark J Slade First Vice Presfdenl amp Chief Financial Ofllcer

Mortgage Retail amp Privatbull Banking Services

Patrlck A Tamblyn Senior Vice President Private Banking Manager

Klrsly E Haholan Vice Presldenl amp Mortgage De[Xlrlmenf Manager

Amnndo M Harl Vice Presden Administration amp Opemtfons

Kimberly A Clugston Vice President amp Senior Mortgage Loon Officer

Linda S Brewer Vice President amp Private Banking 0ffcer

Mary Hays Vice Presden Private Bonling Officer

Chmles W CracrcrH Vice President Befall Moitgage Soles Manager

Curl DEnt Vice President amp Morgaga Loan Officer

Christine G Hold Vice Presfdenl Cash Management

Krltlna L Moyer Vice Presden amp Plymoulh Branch Manager

Joan C Hendrlck1 Vice President amp Main Office Brandi Manager

Kevin M Kramer Vice Pzesidenl Pcivale Banking OWrer

Denise J Sialleld Vice Presden amp Marlgage Loon Officer

Dennis D Ticknor Esworh Ofnce Branch Manager amp Health Savings Account Specialist

David K Pote Ypsilanti OfJee Branch Manager

Shelley L Rankin Saline Office Branch Manager

foseph D Croigmile Motlgorc Loon OfJeer

Kevin C Salley Morgage Loan OfJeer

William E Smith fr Mortgage Loan OfJrer

Sondra L Bccver Deposit Operations Offirer

Stoey B fohnson Sr Relolionsl1ip Banking Ollicer

Kimberly K Snow Relalionship Banking amp Cash Management Oflfcer

FinanC9

Lha AMason Vice Presidenl amp Infernal Auditor

Jame$ A Miller Vice President amp Dfreclor Human Resources

Bmbcrro L Morrison VicePresiden

Bella MFemondez Assisan Vira President amp Accounting Oflicer

Trust amp Investment Monagemcnl

Thomas R Kalloword First Vice President amp Senior Trusl Olflror

Stephen J Seymour Senior Vice Presden amp Senior Investment Olflcer

Sonia S Perle Senior Vice Presidenl amp Investment 0[cer

Cothlcon L Savoie Senior Vice Prosldont amp nvestmenl Offrer

Margaret L Vogel Vice President amp Trusl OfJcer

Erin E Archambault Vice President Trust Operations

Eric P Helbm Vice Presidenl amp Director of Business Development

Deborah A Jones Vice President amp Business Developmen Officer

Jacqueline Jenkins Vira Presidenl Portfolio Manager amp Businoss Dovclopmcnl Ollcor

Mllzl J Talon Vice President amp Trust Offlrer

Diano S Winner Vice President amp Investment Officer

Sarah Dobson Campbell TrusOffcer

MarkA Sklfl lnveslmenl Oflicer

Commercial Lending

Walto r G Byes Presden Saline District

Michael L Michon President Plymouth Districl

Michael H Chotos President Ypsilanti Districl

Mlrhuel A Cole Group President Technology Industry Group

Sall sh B Jost Senior Vice President amp Senior Loon Officer

Hons W Maler Senior Vice President SpeclolY Banking

David A Guenther Vice President amp Sonier Loon Officer

Robert R Roiie Vice Prcsldenl amp Senior Loon Ofllcer

Mork D Bally Vice Presldenl amp Commercial LoonOfflrer

Jonathon P Bowdler Vico Prrsidcnl amp Commercial Real Estate Manager

Jomes J Plummer Vice President amp Cormnerciol Loon Olicer

Mork H Holtz VicePresidenl TechnoloQy Industry Group

Information System1

Jeffrey J Stanton Vice Presden I amp ChiefTechnalogyOficer

Marketing

Jonke M Ortbrlng Vice President amp Marketing Department Manager

Cwdil Administration

Dawn M Prescott Senior Vice President amp Managed Assets Offirer

Trina M VonNesl Vice Prellden amp Credi Manager

Stephania N Hnnigan Assistant Vire President Consumer Credll amp Compliance

Soro L Hoffman Assistant Vice President amp Small Business Lending Offirer

Pamela f Wetzel Credi Atlminislrolion Officer

Compliance

Susan E Wcrgnor Vice Presfden Compliance 01icer amp Compliance Department Manager

John E Fosler Vice Presden I BSA OFAC amp Security Olirer

Brion J Powers Asslstanl Vice Piesden BSA amp Security Special isl

Cynthia K Shacllor BSASecurity Admlnlstralve Oficer

Unifi Eq11ipmbullnl Finance

Raymond J Grimshaw President amp Chief Ixcculva Olliccr

Thomaii J Conzolmmm Secretary Treasurer amp Chief Financial Officer

Directors

Thomas P Bo1dere Ptesdenl Midtown Group Inc

Jan L Garfinkle founder amp Manarlng Director Arborelum Ventures

Isadore J King President amp Chief Executive Officer Synergy Partners LLC

Timolhy G Marshcrll President amp Chief Execulfve Olflcet Bank of Ann Arbor

Michael C Martin Vice Presidenl Firs MarUn Corporalon

William C Martin Chairman Athletic Director Emeritus University of Michigan

Erneel G Perich Presden Perich + Partnets Ltd

David R Sams Mcrnaging Partner 360 Advisors LLC

Joseph A Sos Owner Ses Moors Inc

Cynthia H Wilbanks Vice President for Government Relalons University of Micbfgan

Jelfrey S Williams Chairman amp Chief fxeculve Offfcer Tangent Medical Technologies NeuMoDx Molecular Tnc

Directors EmcritU6

Jomes WAndorson Jr President The Anderson Assodoles

Richard P Eldswick Foundfnrr Diteclor Arbor Partners

Jun Barney Newman Vice Presiden Ann Arbor Dlslrfcl Ubrary Bocrrd

Rlchord N Robb DDS Regan Emeritus Eastern Michigan University

Downtown Ann Arbor

125 South Fifth Avenue

Ann Arbor MI 48104 7346621600

Downtown Saline

1 79 East Michigan Avenue

Saline MI 48176 7344705001

Downtown Ypsilanti

7 West Michigan Avenue Ypsilanti MI 48197 7344859400

boa acom

Ellsworth Rd amp Airport Blvd

801 West Ellsworth Road Ann Arbor MI 48108 7346698900

Plymouth

1333 West Ann Arbor Road

Plymouth MI 48170 734455 1 5 1 1

Stadium Blvd amp Liberty St

2204 West Stadium Boulevard Ann Arbor MI 48103 734822 1 900

Traver Village Shopping Center

2601 Plymouth Road

Ann Arbor MI 48105 7346623800

EQUAl HOUSIMG LENDER

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Continued)

otbtH Reg y1qt1 Own ad OREOJmiddot Assets acquired through er IIllltead cf loan forocloouro ore inltlally recorded ot loir value less costs to mill whim ocqulredestabllshlngo llew cost lxms These assets are eubsequentlyoccounted for at lower cl cost or fair value )ass eitlmuled costs to sell 1pound fair value declines subsequent to lo1lltlosurn u valuation allowance is rncorded through expense Oparntna cosLI nfo1 ocqulslUonara expansed

OREO acquled by the Corporation lhtough loon defaults by customers oncove1ed loons or acquired by the Corpomllon as pail oI Its acquisition of New Uherty Banklsoo Note 2 Business Comblnotlonsl me covered under the loss shoring agreement discussed above Pursuant to the etms of the = shodng ag1aemen coveted assets ore subject lo a s lo led loss threshold whereby the FDIC will reimburse the Corporation or 60 of losses Incurred Any gains or losses realized at the time of disposal oro portlolly offset by tho FDIC toss shore and oro roloctcd In Income Al year-end 2JM ond 2013 SO omi$155 ol lha Gorporalions OREO wos subject lo the loss shoring agreement

qulpminl god 1ltauhold lmnroyemenlgbull Lond Is corrled at cosL Premises and equipment ore stoled ot cost less accumulated depreciation generally com puled on the straghtmiddotlne basis over the assets useful llves and over the terms of the lease or the esthnotm useful llves lor leasehold Improvements whichever is shortur

Qmb Surrnndqr Yaluo al J lfo Jnsumncebull ThoC01pornlon hos punhaood Hfohmurnnco pollclas on 001lain key oxccutivos Cash summdor voluo ol lfo Jnsuroncc Is 1ocordrnl ol lho amount thot can ba 1callzod under tho nsuronco controctot tho balonco sheet dole which Is the cash surrender value adjusted for other charges or other amounts due tho tore probable otseltlemenl

lampna-Term Assa1bull Premises and equpmen olher lnlongble assets and other long-term assets 01e rnvewed for Impairment when events indicate heir carrying amount may not be recoverable from future undisccunted cash flows If lmpolred the assets are recorded a fair value

Bepurchgee Agrccmgnj11bull SubsanlolyaI repurchase ng1eement UobiHUos represent amounts advanced by various customers These balances ore not deposits and ore no covered by Jederal deposit lnsuronce SecurUes ore pledged to cover theiie lablllles

Jrcrmfers gl Fingncgl AsGesbull Ifonsfers of financial osselsare accounted for as soles when control over the assets hos been rellnquisbed Control aver transferred ossels Is deerned lo be surrendered when the assets have been isolated from the Corpomlion tho tronsforco ahtolns tho dght U1no of conditions that constmln II Imm taling ad van logo of that right to pledge or cxchango tho tronsforrod assets end tho Corpo1otlon dOCll not maintain cifoctlvc control over tho hansfoncd assets hrough an agreement to repurchase them before their maturity

smck_Enenutllm Compensotlon cost is recognized for stock options and restricted stockawords issued lo employees bosed on the fair value o[ lhese awards at Iha dote 0pound gronL A BlackmiddotScboles model Is ullllzed fo eslmale the folr value cl sled opHons

GompensoUon cost ls recognized over the required service period generally defined as Iha vesting pedod For awards wllh graded veslng compensation cost is rncognlzad on o sralghlmiddotline bosls over the requisite service period for the en Ure award

lncomo TggeBbull Income twc expense fa the total of he current year income tax due or refundable and the chonge In deferwd tux 0sets andlobillties Ikfened toxossels and lobiUlei me he expected future ax amounts poundor the tempomry dUferences btitween cnnying amounts and tax hoses al ossots and lobilltles computed using onoctod lox mos A valuation allowanco IE ncodcd reduces delened tax assets to Iha amount expected o he realized

A tax position is recognized as a benefit only Ell ls more likely than not tho the tax position would be sustained In a lox exominolcn with o tax exomlnatlon beng presumed to occur The amount recognized is the largest amount of tax benellt tho Is grealer than 50 lilelyol being realized on exomnoUon For tax posllions no meellng he Mmore likely hon natM lest no lox benelll Is recorded

The Corpototon recognizes lnterestondor penalties related lo Income tax matters In Income tax expense

QfBglgpcemiddotShMI Ejpgpclgl Jostrumentw Financtol Instruments include off balance-sheet credit Instruments such us

commitments to make loons and stondby lettets cf credl Issued to meet customer Ilnomlng needs The face omoun for these items represents lhe exposure to loss before conslderlng customer collolerolcr oblllty lo repoy Such Iinoncol Instruments ore recorded whon they mo funded

Earnings Per Shattbull Bosc earnings per shorn ls net Income divided by lhe weighted overage number of common shores outslondlngdudng the pedod Diluted earnings per shore Include lhe dilutive effect cf oddltonol potential common shares tssuoble under equity hosed plans

All dollor amounts In thousands excepl per shore data Unaudited

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Conlinucdl

CQw1UUicnelyc Ineqmobull Comprehensive Income conslslll o[ net income and other comprehensivu Income Other comprehensive income ndudus unrealized gains and losses on suurlU avalablu or salu which ore also recognized as separate components ol equly

Lon Cantlngcociosbull Loss contingencies Including claims and Iago ocilons otlsng Jn the ordinary courso of husnass om rocordcd as llobllUes when the likelihood o loss is probable and on amount or long a cf loss con be reasonably estimated Management does not believe there now are such molters that will hove a material elfect on the fnonclol solements

Re1rclpps on Cruhl Cosh on hand or on deposit wllh he Federal Reserve Bonk cf Sl521 and $1312 was required to meal regulatory reserve end clearing requlrnmenls al year end 014 and 2013

fair Yalur cf Engncgl ipdltumenll Fair values o[ llnoncol Instruments ore estimated using relevant market lnFormoion and other assumptions as more fully disclosed In a sepuae note Fair value estimates Involve uncertain Iles orcl matters of sgnlllcont judgment regarding inerest rotes credit risk prepayments and other loctors especiolly ln he absence of brood rno1kets or particular Uems Changes In ossumptlons or In market conditions could sgnillcantly olecl the estimates

Diyjdnnd Bosricljanbull Banking toguotions require molnlainlngcolaln cnpla lovos and nay mil tho dvldonds paid by tho honk to tho holding company or by Iha hodina com pony ta rhmoholdnrs

Reclnsaificalionsbull Some Items In the prior year financial statements were reclassifed to conform lo he current presentation Reclassillcaons had no efec on prior year net Income or shareholdersmiddot equity

ampl9plion gl Nuw Aecgunlng Sgpdgrdsbull In Februory 20[3 lhe FASBomended exlsllng guidance reloled lo reporlng amounts rcclossUiOO out ol accumulated othorcomprohonsivo income Thoso amondmonts do not change tho current rcquiromons or reporting net Income or other comprehensive income In flnonclol statements These amendments require an entity lo provide lnformatlon about the amounts reclassified out of accumuloled olhercomprehenstve Income by componenL In addltlon on entty Is required to present eilher on the loce of the state men where net Income Is presented or In the notes signifconl amounts reclassified cul ol accumulated other comptebensve Income by the respective line Items of nel Income bu only j[ lhe amounl reclassified 1s required under US GAAP to be reclasslfied to ne Income In its entirety in the soma reporting pedod For other amounts that ore not requited under US GAAP to be redassfied In their entirety lo net Income on enlty Is required to crossmiddot mforonoo lo other dlsolosutcs roqutcd under US GAAP that provide addtonal dctals oboul thoso amounts These omondmcnts ore elfeclve prospectively for fiscal yeats and lntedm periods within those years beginning alter December 15 2013 Early adoption Is parmltled The elfecl ol adcptlng his sondard dd no hove a moterlal eleltt on the Corporatons opeioUng results or llnanclal condition

In Decombar 2013 lhu FASB omandcd ho Glossary of lhu Codilicotlon lo include a slnulu dollniton of o public buslnossantly for future uso in US GAAP Tho doFloUon ol a public business enlily will ho used in considodng tho scope of now finonciol gudonco and will identify whether lhe guidance does or does not apply to public business entitles The amendment does not allectexistlng lequ1ements and there Is no elfectlve date The adoption ol lhs sondo1d dld not hove a material effect on the CompanyS operotng rosuls or llnondol condition

lnJonuory2014 the FASB amended existing guidance lo dailfy when a creditor should be conside1ed lo hove tecelved phrJcal possession of rnsidonlol tool oatolo propaty collotomldng o crmsumcr mmtgogo loan such that tho loon should ho dcrccognlzod and tho 1001 estate rccognzcd Thcso amendments dorify that an in substance repossession or foreclosuro occurs end a creditor s considered to have received physcol possession of resldentol reol estate property coloterolldng a consumer morlgoge loon upon ether 11) the credlor oblonlng legal title to the residentlol 1eol estate properly upon completion of a foreclosure or (2) the borrower conveying oil lnlarest In the resldentol real eslae property lo tha credtor to sotsfy that loon through completion of a deed Jn lieu cf foreclosure or through o similar legal ogreemanl Addillonol disclosures ore required These amendmenls ore eHecllve for publc business enUles for annual perJods end Interim periods within those annual parcxls begtnnlngafler December 15 2014 Amendments In th ls stondord con be applied using a modified retrospecUva or prospective transition methcxI Early adoption ls permlted The adoption ol this standard ts not expected to hove a maedol effect on the Componys operating results or llnonciol condtlon

In Moy2014 the FASS amendOO existing guidance realOO la revenue from con1mcis with custame1s 111sumendment supersedes end replaces nearly all existing revenue recognition guidance Including lnduslrymiddotspeclflc gudonco establishes a new conltolshybosod ovonuo mccgnllon modal changos the basis for deciding whon rovonuo is rcccgnizod ovor limo er at a poln In Hrno provides new and more detailed guidance on speclflo epics and expmdsand Improves disclosures about 1evenue In oddllion his amendment specfes lhe accounting for some costs to obtain or fulfll a contract with a customer These omendmenls ore elfectlva for annual IeportJng periods beginning ofter December 15 2016 lncludng Interim periods within that reporting per Joel Early oppllcolonls net permitted The amendments should be applied retrospectively 1o all periods presented or retrospectively wllh lhe cumulaHve effect recognized ol lhe dole o[ lnllol oppllcotlon The Company Is currenlly evoluollng tho Im po cl of his new occaunUng standard on Iha consolidated financial solornonts

All dollar omounts In thousands except per shore data Unoudtted

Ervin Leasing Business Combination

On January l 2013 the Corporotonacquhed 100 of the outstanding common shares of Ervin Leosng Corporation In exchange for cash lo toling $4622 Under the erms of he acqulsltlon oll common shareholders rncelvtgtd cash equal ta tatul equity o Ervin Leoslng as of December31 2012 plus $600 Ervin Leosing Company results of operotlons ware Included In the Corpomlans rnsults bognnlng Janumy l 2013 As al July l 2014 Ervin Locmng Company ronamcd and rabmndod to Unifi Equlpmon Flnanco

The following able summarizes the consdetollon paid for Ervin Leosng Company ond Iha omounts ol lhe assets ocqulrnd and llobUias ossumad recognized al he ocqusUon dote

Consderalon Cabullh

For Value of Total Conslderollon Transferred

Recognized amounts of Identifiable assets acgulred and Uabllites assumed

Gosh and cash equivalents Direct llnoncng leases Noncompeta agreement Dlharossels

Tola assets a ired

Notes payoble Other labHUes

Totol lobllltcs assumed

Total idenlfloble net assets

4622 4622

366 11304

100 l098

12BSB

7514

732 8246

4622

No goodwill or olher lnlanglble ossels beyond lhe noncompale agreement above warn generoled as par of lhe Ervin Leosing business combinotlon

New Llbe1ty Business Combnaton

On May 14 2010 the Corporation enterecl into a purchaie nnd ossutnpton agreement (Naw Llbetty Agreement) with the Federal Deposit lnsuranco Corpomlion FDIC) as rncclvor purs1mnl to which tho Corpomton mqulrcd cctlan asts ondassumcd subslontaJy oll o[ the deposits and cetlan lobUtias of New Llbarty Bon(Naw Liberty) New Liberty ope roted one bonklngcanar In Plymouth Michigan

In connecton with the New Liberty ocquslon the Corporaton entered lnlo a loss shoring ograamenlwlth the FDIC that covers mos of New Llbarlys ossels hosed upon the sellers records Including single family resldental marlgoge loons commerciol rool es1ate and commercial and ndustriol loons and OREO (collectvely covered assets) The loss shoring agreements are subject lo certan servicing procedures as sped fled in agreements wllh the FDIC The loss shoring agreements opplicable to sngle family residential morigoge loons provide for FDIC loss sharing ond Corporation reimbursement to tho FDIC for ten years The Joss sharing agreemens oppllcoble to all other covered assets provide for FDIC loss shoring for llva years and Corporation ralmbursomonl of recove1les lo he FDIC far elght yeurs The eXpgtcted Jembursements under the loss sharing ug1eements were recorded us an lndemniUcoHonosset al an esHmated fair value of $15949 on the acqutsiliondote whch represented the present volue oI the oxpoctcd nelcnsh rohnbursomon rolalod lo tho lolS shoring ogmomonls

The CorpotoHon acquired cetlan olhar New Llbarty assets nolcova1ed by Iha loss shoring ogreemenl wlh Iha FDC includlng =sh and secutlles purchased ot lalrvolue At acqusUon lnogg1egole loons ocquled hod on unpaid principal balance oS9mand a lar volue o$69JXl9 and deposits assumed hod o bolo nee of $90l 17

Alldolloramounta In lhousands except par share dala Unaudled

ADDITIONAL INFORMATION

We hove Included ltnonciol inlormotion for Iha yaarendftd Decamber31 2014 Our full ftnancol statements Including noes wem audited by Crowe Horwath our independent publkaccountont ond Crowe Horwath goveon unquallfled oplnon The compeo audited flnondol stataments Including the oudUors opnlon and notes ore avoloble upon request

11 you would lile o copy of the audled financial stolemenls or If you have any quesUons concerning the annual meeting pease con la ct your bank pmsdonl TI mo thy G Marshall at 125 South Filth Avonuo PO Box 8009 Ann Arbor Michigan 4BID7

All dollar omounts In thousands except par share data Unaudited

Officers

Executive Management

Timothy G MarshoJI Presidentamp Chief Execulive Ofllcer

Charles E Crone fr Execullve Vice President amp Chief Revenue Officer

Pall H Jud11on ExecuUve Vice Presfdenl amp Chfef Opera Ung Officer

Lyle r Dahlberg First Vice President Trust amp Invesmenl Group Manarier

Cynlha Livesay Firs Vice Presidenl Credi Administration

Mark J Slade First Vice Presfdenl amp Chief Financial Ofllcer

Mortgage Retail amp Privatbull Banking Services

Patrlck A Tamblyn Senior Vice President Private Banking Manager

Klrsly E Haholan Vice Presldenl amp Mortgage De[Xlrlmenf Manager

Amnndo M Harl Vice Presden Administration amp Opemtfons

Kimberly A Clugston Vice President amp Senior Mortgage Loon Officer

Linda S Brewer Vice President amp Private Banking 0ffcer

Mary Hays Vice Presden Private Bonling Officer

Chmles W CracrcrH Vice President Befall Moitgage Soles Manager

Curl DEnt Vice President amp Morgaga Loan Officer

Christine G Hold Vice Presfdenl Cash Management

Krltlna L Moyer Vice Presden amp Plymoulh Branch Manager

Joan C Hendrlck1 Vice President amp Main Office Brandi Manager

Kevin M Kramer Vice Pzesidenl Pcivale Banking OWrer

Denise J Sialleld Vice Presden amp Marlgage Loon Officer

Dennis D Ticknor Esworh Ofnce Branch Manager amp Health Savings Account Specialist

David K Pote Ypsilanti OfJee Branch Manager

Shelley L Rankin Saline Office Branch Manager

foseph D Croigmile Motlgorc Loon OfJeer

Kevin C Salley Morgage Loan OfJeer

William E Smith fr Mortgage Loan OfJrer

Sondra L Bccver Deposit Operations Offirer

Stoey B fohnson Sr Relolionsl1ip Banking Ollicer

Kimberly K Snow Relalionship Banking amp Cash Management Oflfcer

FinanC9

Lha AMason Vice Presidenl amp Infernal Auditor

Jame$ A Miller Vice President amp Dfreclor Human Resources

Bmbcrro L Morrison VicePresiden

Bella MFemondez Assisan Vira President amp Accounting Oflicer

Trust amp Investment Monagemcnl

Thomas R Kalloword First Vice President amp Senior Trusl Olflror

Stephen J Seymour Senior Vice Presden amp Senior Investment Olflcer

Sonia S Perle Senior Vice Presidenl amp Investment 0[cer

Cothlcon L Savoie Senior Vice Prosldont amp nvestmenl Offrer

Margaret L Vogel Vice President amp Trusl OfJcer

Erin E Archambault Vice President Trust Operations

Eric P Helbm Vice Presidenl amp Director of Business Development

Deborah A Jones Vice President amp Business Developmen Officer

Jacqueline Jenkins Vira Presidenl Portfolio Manager amp Businoss Dovclopmcnl Ollcor

Mllzl J Talon Vice President amp Trust Offlrer

Diano S Winner Vice President amp Investment Officer

Sarah Dobson Campbell TrusOffcer

MarkA Sklfl lnveslmenl Oflicer

Commercial Lending

Walto r G Byes Presden Saline District

Michael L Michon President Plymouth Districl

Michael H Chotos President Ypsilanti Districl

Mlrhuel A Cole Group President Technology Industry Group

Sall sh B Jost Senior Vice President amp Senior Loon Officer

Hons W Maler Senior Vice President SpeclolY Banking

David A Guenther Vice President amp Sonier Loon Officer

Robert R Roiie Vice Prcsldenl amp Senior Loon Ofllcer

Mork D Bally Vice Presldenl amp Commercial LoonOfflrer

Jonathon P Bowdler Vico Prrsidcnl amp Commercial Real Estate Manager

Jomes J Plummer Vice President amp Cormnerciol Loon Olicer

Mork H Holtz VicePresidenl TechnoloQy Industry Group

Information System1

Jeffrey J Stanton Vice Presden I amp ChiefTechnalogyOficer

Marketing

Jonke M Ortbrlng Vice President amp Marketing Department Manager

Cwdil Administration

Dawn M Prescott Senior Vice President amp Managed Assets Offirer

Trina M VonNesl Vice Prellden amp Credi Manager

Stephania N Hnnigan Assistant Vire President Consumer Credll amp Compliance

Soro L Hoffman Assistant Vice President amp Small Business Lending Offirer

Pamela f Wetzel Credi Atlminislrolion Officer

Compliance

Susan E Wcrgnor Vice Presfden Compliance 01icer amp Compliance Department Manager

John E Fosler Vice Presden I BSA OFAC amp Security Olirer

Brion J Powers Asslstanl Vice Piesden BSA amp Security Special isl

Cynthia K Shacllor BSASecurity Admlnlstralve Oficer

Unifi Eq11ipmbullnl Finance

Raymond J Grimshaw President amp Chief Ixcculva Olliccr

Thomaii J Conzolmmm Secretary Treasurer amp Chief Financial Officer

Directors

Thomas P Bo1dere Ptesdenl Midtown Group Inc

Jan L Garfinkle founder amp Manarlng Director Arborelum Ventures

Isadore J King President amp Chief Executive Officer Synergy Partners LLC

Timolhy G Marshcrll President amp Chief Execulfve Olflcet Bank of Ann Arbor

Michael C Martin Vice Presidenl Firs MarUn Corporalon

William C Martin Chairman Athletic Director Emeritus University of Michigan

Erneel G Perich Presden Perich + Partnets Ltd

David R Sams Mcrnaging Partner 360 Advisors LLC

Joseph A Sos Owner Ses Moors Inc

Cynthia H Wilbanks Vice President for Government Relalons University of Micbfgan

Jelfrey S Williams Chairman amp Chief fxeculve Offfcer Tangent Medical Technologies NeuMoDx Molecular Tnc

Directors EmcritU6

Jomes WAndorson Jr President The Anderson Assodoles

Richard P Eldswick Foundfnrr Diteclor Arbor Partners

Jun Barney Newman Vice Presiden Ann Arbor Dlslrfcl Ubrary Bocrrd

Rlchord N Robb DDS Regan Emeritus Eastern Michigan University

Downtown Ann Arbor

125 South Fifth Avenue

Ann Arbor MI 48104 7346621600

Downtown Saline

1 79 East Michigan Avenue

Saline MI 48176 7344705001

Downtown Ypsilanti

7 West Michigan Avenue Ypsilanti MI 48197 7344859400

boa acom

Ellsworth Rd amp Airport Blvd

801 West Ellsworth Road Ann Arbor MI 48108 7346698900

Plymouth

1333 West Ann Arbor Road

Plymouth MI 48170 734455 1 5 1 1

Stadium Blvd amp Liberty St

2204 West Stadium Boulevard Ann Arbor MI 48103 734822 1 900

Traver Village Shopping Center

2601 Plymouth Road

Ann Arbor MI 48105 7346623800

EQUAl HOUSIMG LENDER

Ervin Leasing Business Combination

On January l 2013 the Corporotonacquhed 100 of the outstanding common shares of Ervin Leosng Corporation In exchange for cash lo toling $4622 Under the erms of he acqulsltlon oll common shareholders rncelvtgtd cash equal ta tatul equity o Ervin Leoslng as of December31 2012 plus $600 Ervin Leosing Company results of operotlons ware Included In the Corpomlans rnsults bognnlng Janumy l 2013 As al July l 2014 Ervin Locmng Company ronamcd and rabmndod to Unifi Equlpmon Flnanco

The following able summarizes the consdetollon paid for Ervin Leosng Company ond Iha omounts ol lhe assets ocqulrnd and llobUias ossumad recognized al he ocqusUon dote

Consderalon Cabullh

For Value of Total Conslderollon Transferred

Recognized amounts of Identifiable assets acgulred and Uabllites assumed

Gosh and cash equivalents Direct llnoncng leases Noncompeta agreement Dlharossels

Tola assets a ired

Notes payoble Other labHUes

Totol lobllltcs assumed

Total idenlfloble net assets

4622 4622

366 11304

100 l098

12BSB

7514

732 8246

4622

No goodwill or olher lnlanglble ossels beyond lhe noncompale agreement above warn generoled as par of lhe Ervin Leosing business combinotlon

New Llbe1ty Business Combnaton

On May 14 2010 the Corporation enterecl into a purchaie nnd ossutnpton agreement (Naw Llbetty Agreement) with the Federal Deposit lnsuranco Corpomlion FDIC) as rncclvor purs1mnl to which tho Corpomton mqulrcd cctlan asts ondassumcd subslontaJy oll o[ the deposits and cetlan lobUtias of New Llbarty Bon(Naw Liberty) New Liberty ope roted one bonklngcanar In Plymouth Michigan

In connecton with the New Liberty ocquslon the Corporaton entered lnlo a loss shoring ograamenlwlth the FDIC that covers mos of New Llbarlys ossels hosed upon the sellers records Including single family resldental marlgoge loons commerciol rool es1ate and commercial and ndustriol loons and OREO (collectvely covered assets) The loss shoring agreements are subject lo certan servicing procedures as sped fled in agreements wllh the FDIC The loss shoring agreements opplicable to sngle family residential morigoge loons provide for FDIC loss sharing ond Corporation reimbursement to tho FDIC for ten years The Joss sharing agreemens oppllcoble to all other covered assets provide for FDIC loss shoring for llva years and Corporation ralmbursomonl of recove1les lo he FDIC far elght yeurs The eXpgtcted Jembursements under the loss sharing ug1eements were recorded us an lndemniUcoHonosset al an esHmated fair value of $15949 on the acqutsiliondote whch represented the present volue oI the oxpoctcd nelcnsh rohnbursomon rolalod lo tho lolS shoring ogmomonls

The CorpotoHon acquired cetlan olhar New Llbarty assets nolcova1ed by Iha loss shoring ogreemenl wlh Iha FDC includlng =sh and secutlles purchased ot lalrvolue At acqusUon lnogg1egole loons ocquled hod on unpaid principal balance oS9mand a lar volue o$69JXl9 and deposits assumed hod o bolo nee of $90l 17

Alldolloramounta In lhousands except par share dala Unaudled

ADDITIONAL INFORMATION

We hove Included ltnonciol inlormotion for Iha yaarendftd Decamber31 2014 Our full ftnancol statements Including noes wem audited by Crowe Horwath our independent publkaccountont ond Crowe Horwath goveon unquallfled oplnon The compeo audited flnondol stataments Including the oudUors opnlon and notes ore avoloble upon request

11 you would lile o copy of the audled financial stolemenls or If you have any quesUons concerning the annual meeting pease con la ct your bank pmsdonl TI mo thy G Marshall at 125 South Filth Avonuo PO Box 8009 Ann Arbor Michigan 4BID7

All dollar omounts In thousands except par share data Unaudited

Officers

Executive Management

Timothy G MarshoJI Presidentamp Chief Execulive Ofllcer

Charles E Crone fr Execullve Vice President amp Chief Revenue Officer

Pall H Jud11on ExecuUve Vice Presfdenl amp Chfef Opera Ung Officer

Lyle r Dahlberg First Vice President Trust amp Invesmenl Group Manarier

Cynlha Livesay Firs Vice Presidenl Credi Administration

Mark J Slade First Vice Presfdenl amp Chief Financial Ofllcer

Mortgage Retail amp Privatbull Banking Services

Patrlck A Tamblyn Senior Vice President Private Banking Manager

Klrsly E Haholan Vice Presldenl amp Mortgage De[Xlrlmenf Manager

Amnndo M Harl Vice Presden Administration amp Opemtfons

Kimberly A Clugston Vice President amp Senior Mortgage Loon Officer

Linda S Brewer Vice President amp Private Banking 0ffcer

Mary Hays Vice Presden Private Bonling Officer

Chmles W CracrcrH Vice President Befall Moitgage Soles Manager

Curl DEnt Vice President amp Morgaga Loan Officer

Christine G Hold Vice Presfdenl Cash Management

Krltlna L Moyer Vice Presden amp Plymoulh Branch Manager

Joan C Hendrlck1 Vice President amp Main Office Brandi Manager

Kevin M Kramer Vice Pzesidenl Pcivale Banking OWrer

Denise J Sialleld Vice Presden amp Marlgage Loon Officer

Dennis D Ticknor Esworh Ofnce Branch Manager amp Health Savings Account Specialist

David K Pote Ypsilanti OfJee Branch Manager

Shelley L Rankin Saline Office Branch Manager

foseph D Croigmile Motlgorc Loon OfJeer

Kevin C Salley Morgage Loan OfJeer

William E Smith fr Mortgage Loan OfJrer

Sondra L Bccver Deposit Operations Offirer

Stoey B fohnson Sr Relolionsl1ip Banking Ollicer

Kimberly K Snow Relalionship Banking amp Cash Management Oflfcer

FinanC9

Lha AMason Vice Presidenl amp Infernal Auditor

Jame$ A Miller Vice President amp Dfreclor Human Resources

Bmbcrro L Morrison VicePresiden

Bella MFemondez Assisan Vira President amp Accounting Oflicer

Trust amp Investment Monagemcnl

Thomas R Kalloword First Vice President amp Senior Trusl Olflror

Stephen J Seymour Senior Vice Presden amp Senior Investment Olflcer

Sonia S Perle Senior Vice Presidenl amp Investment 0[cer

Cothlcon L Savoie Senior Vice Prosldont amp nvestmenl Offrer

Margaret L Vogel Vice President amp Trusl OfJcer

Erin E Archambault Vice President Trust Operations

Eric P Helbm Vice Presidenl amp Director of Business Development

Deborah A Jones Vice President amp Business Developmen Officer

Jacqueline Jenkins Vira Presidenl Portfolio Manager amp Businoss Dovclopmcnl Ollcor

Mllzl J Talon Vice President amp Trust Offlrer

Diano S Winner Vice President amp Investment Officer

Sarah Dobson Campbell TrusOffcer

MarkA Sklfl lnveslmenl Oflicer

Commercial Lending

Walto r G Byes Presden Saline District

Michael L Michon President Plymouth Districl

Michael H Chotos President Ypsilanti Districl

Mlrhuel A Cole Group President Technology Industry Group

Sall sh B Jost Senior Vice President amp Senior Loon Officer

Hons W Maler Senior Vice President SpeclolY Banking

David A Guenther Vice President amp Sonier Loon Officer

Robert R Roiie Vice Prcsldenl amp Senior Loon Ofllcer

Mork D Bally Vice Presldenl amp Commercial LoonOfflrer

Jonathon P Bowdler Vico Prrsidcnl amp Commercial Real Estate Manager

Jomes J Plummer Vice President amp Cormnerciol Loon Olicer

Mork H Holtz VicePresidenl TechnoloQy Industry Group

Information System1

Jeffrey J Stanton Vice Presden I amp ChiefTechnalogyOficer

Marketing

Jonke M Ortbrlng Vice President amp Marketing Department Manager

Cwdil Administration

Dawn M Prescott Senior Vice President amp Managed Assets Offirer

Trina M VonNesl Vice Prellden amp Credi Manager

Stephania N Hnnigan Assistant Vire President Consumer Credll amp Compliance

Soro L Hoffman Assistant Vice President amp Small Business Lending Offirer

Pamela f Wetzel Credi Atlminislrolion Officer

Compliance

Susan E Wcrgnor Vice Presfden Compliance 01icer amp Compliance Department Manager

John E Fosler Vice Presden I BSA OFAC amp Security Olirer

Brion J Powers Asslstanl Vice Piesden BSA amp Security Special isl

Cynthia K Shacllor BSASecurity Admlnlstralve Oficer

Unifi Eq11ipmbullnl Finance

Raymond J Grimshaw President amp Chief Ixcculva Olliccr

Thomaii J Conzolmmm Secretary Treasurer amp Chief Financial Officer

Directors

Thomas P Bo1dere Ptesdenl Midtown Group Inc

Jan L Garfinkle founder amp Manarlng Director Arborelum Ventures

Isadore J King President amp Chief Executive Officer Synergy Partners LLC

Timolhy G Marshcrll President amp Chief Execulfve Olflcet Bank of Ann Arbor

Michael C Martin Vice Presidenl Firs MarUn Corporalon

William C Martin Chairman Athletic Director Emeritus University of Michigan

Erneel G Perich Presden Perich + Partnets Ltd

David R Sams Mcrnaging Partner 360 Advisors LLC

Joseph A Sos Owner Ses Moors Inc

Cynthia H Wilbanks Vice President for Government Relalons University of Micbfgan

Jelfrey S Williams Chairman amp Chief fxeculve Offfcer Tangent Medical Technologies NeuMoDx Molecular Tnc

Directors EmcritU6

Jomes WAndorson Jr President The Anderson Assodoles

Richard P Eldswick Foundfnrr Diteclor Arbor Partners

Jun Barney Newman Vice Presiden Ann Arbor Dlslrfcl Ubrary Bocrrd

Rlchord N Robb DDS Regan Emeritus Eastern Michigan University

Downtown Ann Arbor

125 South Fifth Avenue

Ann Arbor MI 48104 7346621600

Downtown Saline

1 79 East Michigan Avenue

Saline MI 48176 7344705001

Downtown Ypsilanti

7 West Michigan Avenue Ypsilanti MI 48197 7344859400

boa acom

Ellsworth Rd amp Airport Blvd

801 West Ellsworth Road Ann Arbor MI 48108 7346698900

Plymouth

1333 West Ann Arbor Road

Plymouth MI 48170 734455 1 5 1 1

Stadium Blvd amp Liberty St

2204 West Stadium Boulevard Ann Arbor MI 48103 734822 1 900

Traver Village Shopping Center

2601 Plymouth Road

Ann Arbor MI 48105 7346623800

EQUAl HOUSIMG LENDER

Officers

Executive Management

Timothy G MarshoJI Presidentamp Chief Execulive Ofllcer

Charles E Crone fr Execullve Vice President amp Chief Revenue Officer

Pall H Jud11on ExecuUve Vice Presfdenl amp Chfef Opera Ung Officer

Lyle r Dahlberg First Vice President Trust amp Invesmenl Group Manarier

Cynlha Livesay Firs Vice Presidenl Credi Administration

Mark J Slade First Vice Presfdenl amp Chief Financial Ofllcer

Mortgage Retail amp Privatbull Banking Services

Patrlck A Tamblyn Senior Vice President Private Banking Manager

Klrsly E Haholan Vice Presldenl amp Mortgage De[Xlrlmenf Manager

Amnndo M Harl Vice Presden Administration amp Opemtfons

Kimberly A Clugston Vice President amp Senior Mortgage Loon Officer

Linda S Brewer Vice President amp Private Banking 0ffcer

Mary Hays Vice Presden Private Bonling Officer

Chmles W CracrcrH Vice President Befall Moitgage Soles Manager

Curl DEnt Vice President amp Morgaga Loan Officer

Christine G Hold Vice Presfdenl Cash Management

Krltlna L Moyer Vice Presden amp Plymoulh Branch Manager

Joan C Hendrlck1 Vice President amp Main Office Brandi Manager

Kevin M Kramer Vice Pzesidenl Pcivale Banking OWrer

Denise J Sialleld Vice Presden amp Marlgage Loon Officer

Dennis D Ticknor Esworh Ofnce Branch Manager amp Health Savings Account Specialist

David K Pote Ypsilanti OfJee Branch Manager

Shelley L Rankin Saline Office Branch Manager

foseph D Croigmile Motlgorc Loon OfJeer

Kevin C Salley Morgage Loan OfJeer

William E Smith fr Mortgage Loan OfJrer

Sondra L Bccver Deposit Operations Offirer

Stoey B fohnson Sr Relolionsl1ip Banking Ollicer

Kimberly K Snow Relalionship Banking amp Cash Management Oflfcer

FinanC9

Lha AMason Vice Presidenl amp Infernal Auditor

Jame$ A Miller Vice President amp Dfreclor Human Resources

Bmbcrro L Morrison VicePresiden

Bella MFemondez Assisan Vira President amp Accounting Oflicer

Trust amp Investment Monagemcnl

Thomas R Kalloword First Vice President amp Senior Trusl Olflror

Stephen J Seymour Senior Vice Presden amp Senior Investment Olflcer

Sonia S Perle Senior Vice Presidenl amp Investment 0[cer

Cothlcon L Savoie Senior Vice Prosldont amp nvestmenl Offrer

Margaret L Vogel Vice President amp Trusl OfJcer

Erin E Archambault Vice President Trust Operations

Eric P Helbm Vice Presidenl amp Director of Business Development

Deborah A Jones Vice President amp Business Developmen Officer

Jacqueline Jenkins Vira Presidenl Portfolio Manager amp Businoss Dovclopmcnl Ollcor

Mllzl J Talon Vice President amp Trust Offlrer

Diano S Winner Vice President amp Investment Officer

Sarah Dobson Campbell TrusOffcer

MarkA Sklfl lnveslmenl Oflicer

Commercial Lending

Walto r G Byes Presden Saline District

Michael L Michon President Plymouth Districl

Michael H Chotos President Ypsilanti Districl

Mlrhuel A Cole Group President Technology Industry Group

Sall sh B Jost Senior Vice President amp Senior Loon Officer

Hons W Maler Senior Vice President SpeclolY Banking

David A Guenther Vice President amp Sonier Loon Officer

Robert R Roiie Vice Prcsldenl amp Senior Loon Ofllcer

Mork D Bally Vice Presldenl amp Commercial LoonOfflrer

Jonathon P Bowdler Vico Prrsidcnl amp Commercial Real Estate Manager

Jomes J Plummer Vice President amp Cormnerciol Loon Olicer

Mork H Holtz VicePresidenl TechnoloQy Industry Group

Information System1

Jeffrey J Stanton Vice Presden I amp ChiefTechnalogyOficer

Marketing

Jonke M Ortbrlng Vice President amp Marketing Department Manager

Cwdil Administration

Dawn M Prescott Senior Vice President amp Managed Assets Offirer

Trina M VonNesl Vice Prellden amp Credi Manager

Stephania N Hnnigan Assistant Vire President Consumer Credll amp Compliance

Soro L Hoffman Assistant Vice President amp Small Business Lending Offirer

Pamela f Wetzel Credi Atlminislrolion Officer

Compliance

Susan E Wcrgnor Vice Presfden Compliance 01icer amp Compliance Department Manager

John E Fosler Vice Presden I BSA OFAC amp Security Olirer

Brion J Powers Asslstanl Vice Piesden BSA amp Security Special isl

Cynthia K Shacllor BSASecurity Admlnlstralve Oficer

Unifi Eq11ipmbullnl Finance

Raymond J Grimshaw President amp Chief Ixcculva Olliccr

Thomaii J Conzolmmm Secretary Treasurer amp Chief Financial Officer

Directors

Thomas P Bo1dere Ptesdenl Midtown Group Inc

Jan L Garfinkle founder amp Manarlng Director Arborelum Ventures

Isadore J King President amp Chief Executive Officer Synergy Partners LLC

Timolhy G Marshcrll President amp Chief Execulfve Olflcet Bank of Ann Arbor

Michael C Martin Vice Presidenl Firs MarUn Corporalon

William C Martin Chairman Athletic Director Emeritus University of Michigan

Erneel G Perich Presden Perich + Partnets Ltd

David R Sams Mcrnaging Partner 360 Advisors LLC

Joseph A Sos Owner Ses Moors Inc

Cynthia H Wilbanks Vice President for Government Relalons University of Micbfgan

Jelfrey S Williams Chairman amp Chief fxeculve Offfcer Tangent Medical Technologies NeuMoDx Molecular Tnc

Directors EmcritU6

Jomes WAndorson Jr President The Anderson Assodoles

Richard P Eldswick Foundfnrr Diteclor Arbor Partners

Jun Barney Newman Vice Presiden Ann Arbor Dlslrfcl Ubrary Bocrrd

Rlchord N Robb DDS Regan Emeritus Eastern Michigan University

Downtown Ann Arbor

125 South Fifth Avenue

Ann Arbor MI 48104 7346621600

Downtown Saline

1 79 East Michigan Avenue

Saline MI 48176 7344705001

Downtown Ypsilanti

7 West Michigan Avenue Ypsilanti MI 48197 7344859400

boa acom

Ellsworth Rd amp Airport Blvd

801 West Ellsworth Road Ann Arbor MI 48108 7346698900

Plymouth

1333 West Ann Arbor Road

Plymouth MI 48170 734455 1 5 1 1

Stadium Blvd amp Liberty St

2204 West Stadium Boulevard Ann Arbor MI 48103 734822 1 900

Traver Village Shopping Center

2601 Plymouth Road

Ann Arbor MI 48105 7346623800

EQUAl HOUSIMG LENDER

Downtown Ann Arbor

125 South Fifth Avenue

Ann Arbor MI 48104 7346621600

Downtown Saline

1 79 East Michigan Avenue

Saline MI 48176 7344705001

Downtown Ypsilanti

7 West Michigan Avenue Ypsilanti MI 48197 7344859400

boa acom

Ellsworth Rd amp Airport Blvd

801 West Ellsworth Road Ann Arbor MI 48108 7346698900

Plymouth

1333 West Ann Arbor Road

Plymouth MI 48170 734455 1 5 1 1

Stadium Blvd amp Liberty St

2204 West Stadium Boulevard Ann Arbor MI 48103 734822 1 900

Traver Village Shopping Center

2601 Plymouth Road

Ann Arbor MI 48105 7346623800

EQUAl HOUSIMG LENDER

Arbor Bancorp Inc Form Y6 December 31 2014

Item l a) l OK (Not applicable)

Item 1 b) Annual Report (Enclosed)

Item 2) Organization Chart (Enclosed)

Item 2b) Branch Verification (Enclosed)

Item 3 a) Shareholders voting greater than 5

Name Address Citizenship

Thomas P Borders Austin TX 78703 USA

William C Martin Ann Arbor tvJI 48 1 0 5 USA

Item 3b) NIA

Item 4) Directors and Officers (See Attached)

of of Shs Options Owned

65 166 6000 734

1 3 0832 7500 1474

100 Owned

Arbor B ancorp I nc Yea r E n d e d Dece m be r 3 1 20 1 4

March 1 5 2 0 1 5

Arbor Bancorp I nc A n n Arbor Michigan

State of Incorporation - Michigan

Arbor Bancorp

Statuto ry Trust I Ann Arbor Michigan

State of I n corporati on - Con necticut

Ba n k of A n n A rbor Ann Arbor Mi chigan

State of Incorporati on - M ichigan

I

BOAA Leas i n g LLC Manag ing Member Ann Arbor M i c higan

State of I ncorporation - M ic h igan I

U n i F i Eq u i pment F i nance

C o m pa ny Ann Arbor Michigan

State of Incorporati on - M ichigan

100 Owned

100 Owned

100 Owned

Results A list of brinches for your depository Institution BANK OF ANN ARBOR (I D_RSSO 2390929) This depository Institution Is held by ARBOR BANCORP INC [2454380) of ANN ARBOR Mf 11ie data are as of 12312014 Oat a reflects Information that was received and procesud through 03132015

Recondatlon and Verllleatlon Sleli 1 In the Data Action column of each branch rcw enlerone or more of the 1ttlons specified below

2 If required enter the date Jrt tM Effective Date column

OK If the bnioch Joformatlon ls correct enterOKJn the Data Action column Oiaoge ]fthe branch Information ls Incorrect orlncomplflte revise the dat11 enlerChance In the Data Action column and tM date when this Information first bea valid In the Effective Date column

dose lf a brargtch lsted Wll5 sold or closed enterOo5 In the Data Actfon coiL1mn and the sae ordosure date In the Effective Date column Delete lf a branch listed was never owned by this depository Institution eniur Deeteln the Data Action column

Add [fa reportable b111iclt Is missing Insert a rowadd the braoch data and enterAdd In the Data Action column and the opening oricqulsltlon date In the Effective Dale column

lfprfntnamp thls Hsi you mbullY need to adjust yourpbullge setup In MS Excel Try usng Jandsc1pe orientation pace sc1tln11 andorlegal1lzed paper

Submission Procedure When you bullre finished send bull saved copYtoyourfRB contact See the de ta Red Instructions on this site for more Information

lfyou are emiddotmbulltlfng this toyourFRB contact putyourlnslutlonname city and state In the subeel line of the emiddotman

Note To satisfy the FR YmiddotlO reporting requlremeots you must abo submit FR Ymiddot10 Domestic Brinch Schedules for eacll branch with bull Data Action of Change dose Delete or Add

The FR YmiddotlO report may be 1ubmltted In a hardcopy format or via the fR YmiddotlD Online appllcatlon -httpsylOonllnefederaruervegov

bull FOCUNINUM Office Number and ID_RSSD coumris are for reference only VeriflciUon of these values ls not 1equlred

DataAction Effective Date Brandi ServkcTvne Branch lO RSSO Popular Name Street Address mv middot OK fuUServke (Head OffKe) deg BANK OF ANN ARBOR 125 SOUTH flFTHAVENUE ANN ARBOR

OK Fun service 3717466 nuwoRrn omce 801 WESTEUSWORTI-1 ROAD ANN ARBOR

OK FullServke 3528644 STADIUM OFFICE 2204 WEST STADIUM BOULEVARD ANN ARBOR

OK FuOService 3528626 TRAVERVIUAGEOfflCE 2649 PLYMOUTI-1 ROAD ANN ARBOR

WASHTENAW OFFICE DRIVE UP

nose FuUServlce 3528608 CONVENIENCE CENTER BRAN 3500 WASHTENAW AVENUE ANN ARBOR

OK middot FuIServfce 4131087 PLYMOUTH BRANCH 1333 ANN ARBOR ROAD WEST PLYMOUTH

AOD ll2014 FuUServlce SALINE BRAN 179 EA5TMCHIGAN AVENUE SAU NE

OK Full Service 3528595 YPSILANTI BRAN 7WEST MJCHGAN AVENUE YPSILANTI

Stbullte ZloCode Countv

Ml WASHTENAW

Ml 48108 WASHTENAW

Ml 48103 WASHTENAW

Ml 48105 WASHTENAW

Ml 48104 WASHTENAW

Ml 4817012 WAYNE Ml 48176 WASHTENAW Ml 48197 WASHTENAW

Countrv FOCUNINUM Office Numberbull Head Office Head Office ID RSSD Comments UNITED STATES 56263 0 SANKOFANNARBOR 2390929 UNITTD STATES 457989 5 BANK OF ANN ARBOR 2390929 UNITED STATES 419761 4 BANKOFANNARBOR 2390929 UNITED STATES 3SB945 l BANKOFANNARBOR 2390929

UNITED STATES Not Required Not Required BANK OF ANN ARBOR 2390929 UNITED STATES 82015 6 BANK OFANNARBOR UNITED STATES 7 SANKOFANNARBOR UNITED STATES 359737 2 BANKOFANNARBOR 2390929

FORL1 Y6 (as ofDec 2014) Item 4) Directors and Officers

Name

Address

P1incipal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates Midtown Group Inc

Vhich includes Midtown Realty LLC 610 Guadalupe LLC

City Hall LLC

Hogarth Management LLC

Douglas Lake LLC

Arbor Green II LP

The Tapestry Foundation

MTG Portfolio Ltd

Texas One Capital Mgt LLC

Sixth Street Film Ltd

Sixth Street Management

214-218 South State St LLC

6559 Partners Ltd

Whistler Goods LP

SSF Seventeen LP

HV AC Acquisition Inc

BCL Walker LLC

Rivercity Live LLC

Greenhill Recreation LLC

Thomas P Borders Austin Texas

Business OwnerInvestor

Title No Of Percent Position Shares Owned

Director 651 66 734 Director

President 50

Member 2265 Member 50 Member 100 Partner 23

Director

Limited 495 Partner

Member 3000 General 1 00 Partner

President 1 00 Member 7575 Partner 495 Partner 0 1 Partner 99

Member 20 Member 3 66 Member 35 1 Manager

The bank stock is owned by Arbor Green II LP of which tvfidtown Group Inc is the General Partner owning 1 Mr Borders is the President of Midtown Group Inc and also a 23 limited partner of Arbor Green II LP

Signature

Acici I

Af fiJihJ11-v I

Date ) - J 7 - L

J )) R 0 s e woeic9 I u c_ v(anO) er

i fio C()Qs1 Q r i1-Q LuM LLC lCL(l o Cef

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor Other Affiliates

Arboretum Ventures

Arboretum Ventures II LP

Arboretum Ventures Ila LP

Arboretum Ventures I LLC

Arboretum Ventures I-A LLC

Arboretum Ventures ill LP

Arboretum Investment Manager LLC

Arboretum Investment Manager II LLC

Arboretum Investment Manager Ila LLC

Arboretum Investment Manager III LLC

Jan L Garfinkle Ann Arbor 1vlichigan

Venture Ca pi tali st Title No Of Percent

Position Shares Owned

Director 1 500 0 17 Director

President 680 680 Managing

na 1 0 Director

Managing na 1 0

Director Managing

na 200 Director

Managing na 00

Director Managing

na 1 2 Director

Managing na 680

Member Managing

na 480 Member

Managing na 480

Member

Managing na 3 80

Member

Signature 1-+-middot2rv_-----middot _tU----+---Le-middot _

D u Date _d-)__+_f_) _

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

Synergy Partners LLC

Isadore J Kine Ann Arbor Michigan

Health Care Executive

Title No Of Percent Position Shares Owned

Director 300 003

Director

President amp CEO

Date

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Timothy G Marshall Ann Arbor Michigan

Bank CEO Title No Of Percent

Position Shares Owned

Director amp 1 1 950 1 35 CEO

Director amp CEO

Signature vt Date _1-____J )---l_S_ y

FORi1 Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates Huron Ashley LLP

Traver Village LLP

South First Associates LLC

First Properties Assoc LLP

Millcreek One LLC

Mill Creek II Assoc 3965 South State Associates LLC 2001 Commonwealth LLC

Keweenaw LLC

3 1 7 Maynard LLC

330 East Liberty LLC

520 East Liberty LLC

555 South Forest LLC

320 South Division LLC

Rabbit B ay LLC

1 900 1 948 Walnut LLC

20 1 Depot LLC

Long Timber Ranch LLC

Traverwood Apartments LLC 1 1 6-120 W Huron LLC

Michael C Martin Ann Arbor Michigan

Real Estate Developer Title No Of Percent

Position Shares Owned

D irector 2 1000 237

Director

Member 2450

Member 3200

Member 1 9

Member 25

Member 26 1 1

Partner 3 5 63

Member 32

Member 1

Member 20

Member 3505

Member 1 5

Member 1 5

Member 1

Member 1

Member 2450

Member 25

Member 50

Member 1 0

Member 25

Member

25

Date _Q_____g_ep_) t_-

FORlVI Y6 (as of D ec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

B ank of Ann Arbor

Other Affiliates First Martin Corporation C-3 Partners Depot Street Benevolent Assn Homestead Commons LLC Homestead Office LLC Huron Ashley LLC Traver Village LLC Second Properties Assoc LLC First Properties Assoc LLC MainWashington Assoc LLC Green Road Assoc LLC Mill Creek One LLC Mill Creek II Assoc Traverwood EPA LLC Traverwood Properties I LLC City Hall LLC Trackside Restaurant Corp 3965 South State Associates LLC 200 1 Commonwealth LLC Keweenaw LLC API Properties 8 1 5 LLC Traverwood Properties rvIDI LLC Traverwood Properties II LLC 3 1 7 Mavnard LLC 240 1 LLC Traverwood Properties III LLC 330 East Liberty LLC

Villiam C Martin Ann Arbor Michigan

Real Estate Developer Title No Of Percent

Position Shares Owned

Director 130 832 1474

Director

Owner 1 00 Member 50

Member 50

Member 9 895 Member 72

Member 49 Member 34

Member 8 1 33

Member 48 tvlember 49 Member 98

Member 4779

Member 1 8 75

Ovmer 1 00

Member 50

Member 50

Member 63 73

Member 4890

Member 25 Member 49 Member 58 Member 1 00 Member 50

Member 50 Member 9 9 0

Member 50

Member 50 Member 35

middot middot

520 East Liberty LLC Member 35

555 South Forest LLC Member 49

320 South Division LLC Member 49

Rabbit Bay LLC Member 49

Dreamland LLC Member 5 0 South First Associates LLC Member 48798

Martin Family Foundation Owner 1 00

First Charter Service Corp Owner 1 00 Traverwood Bank LLC Member 50 Traverwood Apartments LLC Member 25

1 1 6- 1 20 W Huron LLC Member 25

Date d-_d-_(p_t- __ _

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

P1incipal Occupation

Arbor Bancorp Inc Bank of Ann Arbor

Other Affiliates

Pe1ich + Partners

S ign

Ernest G Perich Ann Arbor Michigan

Advertising Agency Owner Title No Of Percent

Position Shares Owned

Director 1 0200 1 1 5 Director

Owner 1 00

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

360 Advisors

SI Company NuStep Inc Morgan amp State RidgeRun III LLC State ampVei1ture LLC

Pcindview Properties LLC

NuStep IC-Disc Inc

David R S arns Ann Arbor Michigan

Private Investor Title No Of Percent

Position Shares Owned

Director 27488 3 1 0

Director

Managing 1 00

Member Manager 49

Shareholder 20 Shareholder 5000 1 1

Member 100 Member 20 owned by

0 parents

Shareholder 20

pate

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

Sesi Lincoln Mazda Volvo LMV Properties Madison Plaza LLC Sesi Real Estate Investment Sesi Agency Incorporated

Joseph A Sesi Ann Arbor Michigan

Car Dealership Owner Title No Of Percent

Position Shares Owned

Director 7500 084

Director

Owner 1 00 Owner 1 00 Owner 33

1 00 1 00

Date 3 - 9 ltJO$-

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Cynthia H Vilbanks

Ypsilanti Michigan

University Administrator Title No Of Percent

Position Shares Owned

Director 2500 028

Director

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

P1incipal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

Tangent Medical Technologies

NeuMoDx Molecular Inc

Jeffrey S Williams Ann Arbor Michigan

Managing Director Cavanaugh Lake LLC

Title No Of Percent Position Shares Owned

Director 1 000 0 1 1

Director

Chairman amp CEO

Chairman amp CEO

Date l (i K 7A tS-

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Charles E Crone Ann Arbor lvlichigan

Loan Officer Title No Of

Position Shares

VP 1 674

EVP amp Chief Revenue Officer

Signature -7-------==-Igt==-_--middotmiddot_middot _

Percent Owned

0 19

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancom Inc Bank of Ann Arbor

Other Affiliates None

Mark J Slade Ann Arbor lvlichigan

Bmlk CFO Title No Of Percent

Position Shares Owned

VP amp CFO 3684 0 42 1st yp amp

CFO

Signature ---------0---_____ _ Date __ 2-__--j__slt-----

1middot middot

flT

FORlI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor Other Affiliates

None

Cynthia J Livesay Ann Arbor Michigan

Credit Officer Title No Of Percent

Position Shares Owned

VP 2977 034 1st yp

Signature __C--A----4---=------middot __

LO= Date _ _Lmiddot_------middot-S __ _

FORl1 Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc Bank of Ann Arbor

Other Affiliates None

Lyle F Dahlberg Ann Arbor Michigan

Trust Officer Title No Of Percent

Position Shares Owned

VP 1583 0 18 1st yp

Signature __W-----------=--v_L_( ____ __ _ Date __ li__6_z_u_ S-___ _

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Patti R Judson Ann Arbor Micbigan

Bank Officer Title No Of Percent

Position Shares Owned

VP 2225 025

EVP amp COO

c _ 1ih__ Signature -------+--------shy

__

J 1 J 1 6 Date ________ _

• FR Y-6 Cover Page
• Report Item 1 Annual Report to Shareholders
• Report Item 2a Organization Chart
• Report Item 2b Domestic Branch Listing
• Report Item 3 Securities Holders
• Report Item 4 Insiders

100 Owned

Arbor B ancorp I nc Yea r E n d e d Dece m be r 3 1 20 1 4

March 1 5 2 0 1 5

Arbor Bancorp I nc A n n Arbor Michigan

State of Incorporation - Michigan

Arbor Bancorp

Statuto ry Trust I Ann Arbor Michigan

State of I n corporati on - Con necticut

Ba n k of A n n A rbor Ann Arbor Mi chigan

State of Incorporati on - M ichigan

I

BOAA Leas i n g LLC Manag ing Member Ann Arbor M i c higan

State of I ncorporation - M ic h igan I

U n i F i Eq u i pment F i nance

C o m pa ny Ann Arbor Michigan

State of Incorporati on - M ichigan

100 Owned

100 Owned

100 Owned

Results A list of brinches for your depository Institution BANK OF ANN ARBOR (I D_RSSO 2390929) This depository Institution Is held by ARBOR BANCORP INC [2454380) of ANN ARBOR Mf 11ie data are as of 12312014 Oat a reflects Information that was received and procesud through 03132015

Recondatlon and Verllleatlon Sleli 1 In the Data Action column of each branch rcw enlerone or more of the 1ttlons specified below

2 If required enter the date Jrt tM Effective Date column

OK If the bnioch Joformatlon ls correct enterOKJn the Data Action column Oiaoge ]fthe branch Information ls Incorrect orlncomplflte revise the dat11 enlerChance In the Data Action column and tM date when this Information first bea valid In the Effective Date column

dose lf a brargtch lsted Wll5 sold or closed enterOo5 In the Data Actfon coiL1mn and the sae ordosure date In the Effective Date column Delete lf a branch listed was never owned by this depository Institution eniur Deeteln the Data Action column

Add [fa reportable b111iclt Is missing Insert a rowadd the braoch data and enterAdd In the Data Action column and the opening oricqulsltlon date In the Effective Dale column

lfprfntnamp thls Hsi you mbullY need to adjust yourpbullge setup In MS Excel Try usng Jandsc1pe orientation pace sc1tln11 andorlegal1lzed paper

Submission Procedure When you bullre finished send bull saved copYtoyourfRB contact See the de ta Red Instructions on this site for more Information

lfyou are emiddotmbulltlfng this toyourFRB contact putyourlnslutlonname city and state In the subeel line of the emiddotman

Note To satisfy the FR YmiddotlO reporting requlremeots you must abo submit FR Ymiddot10 Domestic Brinch Schedules for eacll branch with bull Data Action of Change dose Delete or Add

The FR YmiddotlO report may be 1ubmltted In a hardcopy format or via the fR YmiddotlD Online appllcatlon -httpsylOonllnefederaruervegov

bull FOCUNINUM Office Number and ID_RSSD coumris are for reference only VeriflciUon of these values ls not 1equlred

DataAction Effective Date Brandi ServkcTvne Branch lO RSSO Popular Name Street Address mv middot OK fuUServke (Head OffKe) deg BANK OF ANN ARBOR 125 SOUTH flFTHAVENUE ANN ARBOR

OK Fun service 3717466 nuwoRrn omce 801 WESTEUSWORTI-1 ROAD ANN ARBOR

OK FullServke 3528644 STADIUM OFFICE 2204 WEST STADIUM BOULEVARD ANN ARBOR

OK FuOService 3528626 TRAVERVIUAGEOfflCE 2649 PLYMOUTI-1 ROAD ANN ARBOR

WASHTENAW OFFICE DRIVE UP

nose FuUServlce 3528608 CONVENIENCE CENTER BRAN 3500 WASHTENAW AVENUE ANN ARBOR

OK middot FuIServfce 4131087 PLYMOUTH BRANCH 1333 ANN ARBOR ROAD WEST PLYMOUTH

AOD ll2014 FuUServlce SALINE BRAN 179 EA5TMCHIGAN AVENUE SAU NE

OK Full Service 3528595 YPSILANTI BRAN 7WEST MJCHGAN AVENUE YPSILANTI

Stbullte ZloCode Countv

Ml WASHTENAW

Ml 48108 WASHTENAW

Ml 48103 WASHTENAW

Ml 48105 WASHTENAW

Ml 48104 WASHTENAW

Ml 4817012 WAYNE Ml 48176 WASHTENAW Ml 48197 WASHTENAW

Countrv FOCUNINUM Office Numberbull Head Office Head Office ID RSSD Comments UNITED STATES 56263 0 SANKOFANNARBOR 2390929 UNITTD STATES 457989 5 BANK OF ANN ARBOR 2390929 UNITED STATES 419761 4 BANKOFANNARBOR 2390929 UNITED STATES 3SB945 l BANKOFANNARBOR 2390929

UNITED STATES Not Required Not Required BANK OF ANN ARBOR 2390929 UNITED STATES 82015 6 BANK OFANNARBOR UNITED STATES 7 SANKOFANNARBOR UNITED STATES 359737 2 BANKOFANNARBOR 2390929

FORL1 Y6 (as ofDec 2014) Item 4) Directors and Officers

Name

Address

P1incipal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates Midtown Group Inc

Vhich includes Midtown Realty LLC 610 Guadalupe LLC

City Hall LLC

Hogarth Management LLC

Douglas Lake LLC

Arbor Green II LP

The Tapestry Foundation

MTG Portfolio Ltd

Texas One Capital Mgt LLC

Sixth Street Film Ltd

Sixth Street Management

214-218 South State St LLC

6559 Partners Ltd

Whistler Goods LP

SSF Seventeen LP

HV AC Acquisition Inc

BCL Walker LLC

Rivercity Live LLC

Greenhill Recreation LLC

Thomas P Borders Austin Texas

Business OwnerInvestor

Title No Of Percent Position Shares Owned

Director 651 66 734 Director

President 50

Member 2265 Member 50 Member 100 Partner 23

Director

Limited 495 Partner

Member 3000 General 1 00 Partner

President 1 00 Member 7575 Partner 495 Partner 0 1 Partner 99

Member 20 Member 3 66 Member 35 1 Manager

The bank stock is owned by Arbor Green II LP of which tvfidtown Group Inc is the General Partner owning 1 Mr Borders is the President of Midtown Group Inc and also a 23 limited partner of Arbor Green II LP

Signature

Acici I

Af fiJihJ11-v I

Date ) - J 7 - L

J )) R 0 s e woeic9 I u c_ v(anO) er

i fio C()Qs1 Q r i1-Q LuM LLC lCL(l o Cef

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor Other Affiliates

Arboretum Ventures

Arboretum Ventures II LP

Arboretum Ventures Ila LP

Arboretum Ventures I LLC

Arboretum Ventures I-A LLC

Arboretum Ventures ill LP

Arboretum Investment Manager LLC

Arboretum Investment Manager II LLC

Arboretum Investment Manager Ila LLC

Arboretum Investment Manager III LLC

Jan L Garfinkle Ann Arbor 1vlichigan

Venture Ca pi tali st Title No Of Percent

Position Shares Owned

Director 1 500 0 17 Director

President 680 680 Managing

na 1 0 Director

Managing na 1 0

Director Managing

na 200 Director

Managing na 00

Director Managing

na 1 2 Director

Managing na 680

Member Managing

na 480 Member

Managing na 480

Member

Managing na 3 80

Member

Signature 1-+-middot2rv_-----middot _tU----+---Le-middot _

D u Date _d-)__+_f_) _

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

Synergy Partners LLC

Isadore J Kine Ann Arbor Michigan

Health Care Executive

Title No Of Percent Position Shares Owned

Director 300 003

Director

President amp CEO

Date

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Timothy G Marshall Ann Arbor Michigan

Bank CEO Title No Of Percent

Position Shares Owned

Director amp 1 1 950 1 35 CEO

Director amp CEO

Signature vt Date _1-____J )---l_S_ y

FORi1 Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates Huron Ashley LLP

Traver Village LLP

South First Associates LLC

First Properties Assoc LLP

Millcreek One LLC

Mill Creek II Assoc 3965 South State Associates LLC 2001 Commonwealth LLC

Keweenaw LLC

3 1 7 Maynard LLC

330 East Liberty LLC

520 East Liberty LLC

555 South Forest LLC

320 South Division LLC

Rabbit B ay LLC

1 900 1 948 Walnut LLC

20 1 Depot LLC

Long Timber Ranch LLC

Traverwood Apartments LLC 1 1 6-120 W Huron LLC

Michael C Martin Ann Arbor Michigan

Real Estate Developer Title No Of Percent

Position Shares Owned

D irector 2 1000 237

Director

Member 2450

Member 3200

Member 1 9

Member 25

Member 26 1 1

Partner 3 5 63

Member 32

Member 1

Member 20

Member 3505

Member 1 5

Member 1 5

Member 1

Member 1

Member 2450

Member 25

Member 50

Member 1 0

Member 25

Member

25

Date _Q_____g_ep_) t_-

FORlVI Y6 (as of D ec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

B ank of Ann Arbor

Other Affiliates First Martin Corporation C-3 Partners Depot Street Benevolent Assn Homestead Commons LLC Homestead Office LLC Huron Ashley LLC Traver Village LLC Second Properties Assoc LLC First Properties Assoc LLC MainWashington Assoc LLC Green Road Assoc LLC Mill Creek One LLC Mill Creek II Assoc Traverwood EPA LLC Traverwood Properties I LLC City Hall LLC Trackside Restaurant Corp 3965 South State Associates LLC 200 1 Commonwealth LLC Keweenaw LLC API Properties 8 1 5 LLC Traverwood Properties rvIDI LLC Traverwood Properties II LLC 3 1 7 Mavnard LLC 240 1 LLC Traverwood Properties III LLC 330 East Liberty LLC

Villiam C Martin Ann Arbor Michigan

Real Estate Developer Title No Of Percent

Position Shares Owned

Director 130 832 1474

Director

Owner 1 00 Member 50

Member 50

Member 9 895 Member 72

Member 49 Member 34

Member 8 1 33

Member 48 tvlember 49 Member 98

Member 4779

Member 1 8 75

Ovmer 1 00

Member 50

Member 50

Member 63 73

Member 4890

Member 25 Member 49 Member 58 Member 1 00 Member 50

Member 50 Member 9 9 0

Member 50

Member 50 Member 35

middot middot

520 East Liberty LLC Member 35

555 South Forest LLC Member 49

320 South Division LLC Member 49

Rabbit Bay LLC Member 49

Dreamland LLC Member 5 0 South First Associates LLC Member 48798

Martin Family Foundation Owner 1 00

First Charter Service Corp Owner 1 00 Traverwood Bank LLC Member 50 Traverwood Apartments LLC Member 25

1 1 6- 1 20 W Huron LLC Member 25

Date d-_d-_(p_t- __ _

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

P1incipal Occupation

Arbor Bancorp Inc Bank of Ann Arbor

Other Affiliates

Pe1ich + Partners

S ign

Ernest G Perich Ann Arbor Michigan

Advertising Agency Owner Title No Of Percent

Position Shares Owned

Director 1 0200 1 1 5 Director

Owner 1 00

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

360 Advisors

SI Company NuStep Inc Morgan amp State RidgeRun III LLC State ampVei1ture LLC

Pcindview Properties LLC

NuStep IC-Disc Inc

David R S arns Ann Arbor Michigan

Private Investor Title No Of Percent

Position Shares Owned

Director 27488 3 1 0

Director

Managing 1 00

Member Manager 49

Shareholder 20 Shareholder 5000 1 1

Member 100 Member 20 owned by

0 parents

Shareholder 20

pate

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

Sesi Lincoln Mazda Volvo LMV Properties Madison Plaza LLC Sesi Real Estate Investment Sesi Agency Incorporated

Joseph A Sesi Ann Arbor Michigan

Car Dealership Owner Title No Of Percent

Position Shares Owned

Director 7500 084

Director

Owner 1 00 Owner 1 00 Owner 33

1 00 1 00

Date 3 - 9 ltJO$-

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Cynthia H Vilbanks

Ypsilanti Michigan

University Administrator Title No Of Percent

Position Shares Owned

Director 2500 028

Director

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

P1incipal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

Tangent Medical Technologies

NeuMoDx Molecular Inc

Jeffrey S Williams Ann Arbor Michigan

Managing Director Cavanaugh Lake LLC

Title No Of Percent Position Shares Owned

Director 1 000 0 1 1

Director

Chairman amp CEO

Chairman amp CEO

Date l (i K 7A tS-

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Charles E Crone Ann Arbor lvlichigan

Loan Officer Title No Of

Position Shares

VP 1 674

EVP amp Chief Revenue Officer

Signature -7-------==-Igt==-_--middotmiddot_middot _

Percent Owned

0 19

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancom Inc Bank of Ann Arbor

Other Affiliates None

Mark J Slade Ann Arbor lvlichigan

Bmlk CFO Title No Of Percent

Position Shares Owned

VP amp CFO 3684 0 42 1st yp amp

CFO

Signature ---------0---_____ _ Date __ 2-__--j__slt-----

1middot middot

flT

FORlI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor Other Affiliates

None

Cynthia J Livesay Ann Arbor Michigan

Credit Officer Title No Of Percent

Position Shares Owned

VP 2977 034 1st yp

Signature __C--A----4---=------middot __

LO= Date _ _Lmiddot_------middot-S __ _

FORl1 Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc Bank of Ann Arbor

Other Affiliates None

Lyle F Dahlberg Ann Arbor Michigan

Trust Officer Title No Of Percent

Position Shares Owned

VP 1583 0 18 1st yp

Signature __W-----------=--v_L_( ____ __ _ Date __ li__6_z_u_ S-___ _

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Patti R Judson Ann Arbor Micbigan

Bank Officer Title No Of Percent

Position Shares Owned

VP 2225 025

EVP amp COO

c _ 1ih__ Signature -------+--------shy

__

J 1 J 1 6 Date ________ _

• FR Y-6 Cover Page
• Report Item 1 Annual Report to Shareholders
• Report Item 2a Organization Chart
• Report Item 2b Domestic Branch Listing
• Report Item 3 Securities Holders
• Report Item 4 Insiders

Results A list of brinches for your depository Institution BANK OF ANN ARBOR (I D_RSSO 2390929) This depository Institution Is held by ARBOR BANCORP INC [2454380) of ANN ARBOR Mf 11ie data are as of 12312014 Oat a reflects Information that was received and procesud through 03132015

Recondatlon and Verllleatlon Sleli 1 In the Data Action column of each branch rcw enlerone or more of the 1ttlons specified below

2 If required enter the date Jrt tM Effective Date column

OK If the bnioch Joformatlon ls correct enterOKJn the Data Action column Oiaoge ]fthe branch Information ls Incorrect orlncomplflte revise the dat11 enlerChance In the Data Action column and tM date when this Information first bea valid In the Effective Date column

dose lf a brargtch lsted Wll5 sold or closed enterOo5 In the Data Actfon coiL1mn and the sae ordosure date In the Effective Date column Delete lf a branch listed was never owned by this depository Institution eniur Deeteln the Data Action column

Add [fa reportable b111iclt Is missing Insert a rowadd the braoch data and enterAdd In the Data Action column and the opening oricqulsltlon date In the Effective Dale column

lfprfntnamp thls Hsi you mbullY need to adjust yourpbullge setup In MS Excel Try usng Jandsc1pe orientation pace sc1tln11 andorlegal1lzed paper

Submission Procedure When you bullre finished send bull saved copYtoyourfRB contact See the de ta Red Instructions on this site for more Information

lfyou are emiddotmbulltlfng this toyourFRB contact putyourlnslutlonname city and state In the subeel line of the emiddotman

Note To satisfy the FR YmiddotlO reporting requlremeots you must abo submit FR Ymiddot10 Domestic Brinch Schedules for eacll branch with bull Data Action of Change dose Delete or Add

The FR YmiddotlO report may be 1ubmltted In a hardcopy format or via the fR YmiddotlD Online appllcatlon -httpsylOonllnefederaruervegov

bull FOCUNINUM Office Number and ID_RSSD coumris are for reference only VeriflciUon of these values ls not 1equlred

DataAction Effective Date Brandi ServkcTvne Branch lO RSSO Popular Name Street Address mv middot OK fuUServke (Head OffKe) deg BANK OF ANN ARBOR 125 SOUTH flFTHAVENUE ANN ARBOR

OK Fun service 3717466 nuwoRrn omce 801 WESTEUSWORTI-1 ROAD ANN ARBOR

OK FullServke 3528644 STADIUM OFFICE 2204 WEST STADIUM BOULEVARD ANN ARBOR

OK FuOService 3528626 TRAVERVIUAGEOfflCE 2649 PLYMOUTI-1 ROAD ANN ARBOR

WASHTENAW OFFICE DRIVE UP

nose FuUServlce 3528608 CONVENIENCE CENTER BRAN 3500 WASHTENAW AVENUE ANN ARBOR

OK middot FuIServfce 4131087 PLYMOUTH BRANCH 1333 ANN ARBOR ROAD WEST PLYMOUTH

AOD ll2014 FuUServlce SALINE BRAN 179 EA5TMCHIGAN AVENUE SAU NE

OK Full Service 3528595 YPSILANTI BRAN 7WEST MJCHGAN AVENUE YPSILANTI

Stbullte ZloCode Countv

Ml WASHTENAW

Ml 48108 WASHTENAW

Ml 48103 WASHTENAW

Ml 48105 WASHTENAW

Ml 48104 WASHTENAW

Ml 4817012 WAYNE Ml 48176 WASHTENAW Ml 48197 WASHTENAW

Countrv FOCUNINUM Office Numberbull Head Office Head Office ID RSSD Comments UNITED STATES 56263 0 SANKOFANNARBOR 2390929 UNITTD STATES 457989 5 BANK OF ANN ARBOR 2390929 UNITED STATES 419761 4 BANKOFANNARBOR 2390929 UNITED STATES 3SB945 l BANKOFANNARBOR 2390929

UNITED STATES Not Required Not Required BANK OF ANN ARBOR 2390929 UNITED STATES 82015 6 BANK OFANNARBOR UNITED STATES 7 SANKOFANNARBOR UNITED STATES 359737 2 BANKOFANNARBOR 2390929

FORL1 Y6 (as ofDec 2014) Item 4) Directors and Officers

Name

Address

P1incipal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates Midtown Group Inc

Vhich includes Midtown Realty LLC 610 Guadalupe LLC

City Hall LLC

Hogarth Management LLC

Douglas Lake LLC

Arbor Green II LP

The Tapestry Foundation

MTG Portfolio Ltd

Texas One Capital Mgt LLC

Sixth Street Film Ltd

Sixth Street Management

214-218 South State St LLC

6559 Partners Ltd

Whistler Goods LP

SSF Seventeen LP

HV AC Acquisition Inc

BCL Walker LLC

Rivercity Live LLC

Greenhill Recreation LLC

Thomas P Borders Austin Texas

Business OwnerInvestor

Title No Of Percent Position Shares Owned

Director 651 66 734 Director

President 50

Member 2265 Member 50 Member 100 Partner 23

Director

Limited 495 Partner

Member 3000 General 1 00 Partner

President 1 00 Member 7575 Partner 495 Partner 0 1 Partner 99

Member 20 Member 3 66 Member 35 1 Manager

The bank stock is owned by Arbor Green II LP of which tvfidtown Group Inc is the General Partner owning 1 Mr Borders is the President of Midtown Group Inc and also a 23 limited partner of Arbor Green II LP

Signature

Acici I

Af fiJihJ11-v I

Date ) - J 7 - L

J )) R 0 s e woeic9 I u c_ v(anO) er

i fio C()Qs1 Q r i1-Q LuM LLC lCL(l o Cef

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor Other Affiliates

Arboretum Ventures

Arboretum Ventures II LP

Arboretum Ventures Ila LP

Arboretum Ventures I LLC

Arboretum Ventures I-A LLC

Arboretum Ventures ill LP

Arboretum Investment Manager LLC

Arboretum Investment Manager II LLC

Arboretum Investment Manager Ila LLC

Arboretum Investment Manager III LLC

Jan L Garfinkle Ann Arbor 1vlichigan

Venture Ca pi tali st Title No Of Percent

Position Shares Owned

Director 1 500 0 17 Director

President 680 680 Managing

na 1 0 Director

Managing na 1 0

Director Managing

na 200 Director

Managing na 00

Director Managing

na 1 2 Director

Managing na 680

Member Managing

na 480 Member

Managing na 480

Member

Managing na 3 80

Member

Signature 1-+-middot2rv_-----middot _tU----+---Le-middot _

D u Date _d-)__+_f_) _

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

Synergy Partners LLC

Isadore J Kine Ann Arbor Michigan

Health Care Executive

Title No Of Percent Position Shares Owned

Director 300 003

Director

President amp CEO

Date

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Timothy G Marshall Ann Arbor Michigan

Bank CEO Title No Of Percent

Position Shares Owned

Director amp 1 1 950 1 35 CEO

Director amp CEO

Signature vt Date _1-____J )---l_S_ y

FORi1 Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates Huron Ashley LLP

Traver Village LLP

South First Associates LLC

First Properties Assoc LLP

Millcreek One LLC

Mill Creek II Assoc 3965 South State Associates LLC 2001 Commonwealth LLC

Keweenaw LLC

3 1 7 Maynard LLC

330 East Liberty LLC

520 East Liberty LLC

555 South Forest LLC

320 South Division LLC

Rabbit B ay LLC

1 900 1 948 Walnut LLC

20 1 Depot LLC

Long Timber Ranch LLC

Traverwood Apartments LLC 1 1 6-120 W Huron LLC

Michael C Martin Ann Arbor Michigan

Real Estate Developer Title No Of Percent

Position Shares Owned

D irector 2 1000 237

Director

Member 2450

Member 3200

Member 1 9

Member 25

Member 26 1 1

Partner 3 5 63

Member 32

Member 1

Member 20

Member 3505

Member 1 5

Member 1 5

Member 1

Member 1

Member 2450

Member 25

Member 50

Member 1 0

Member 25

Member

25

Date _Q_____g_ep_) t_-

FORlVI Y6 (as of D ec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

B ank of Ann Arbor

Other Affiliates First Martin Corporation C-3 Partners Depot Street Benevolent Assn Homestead Commons LLC Homestead Office LLC Huron Ashley LLC Traver Village LLC Second Properties Assoc LLC First Properties Assoc LLC MainWashington Assoc LLC Green Road Assoc LLC Mill Creek One LLC Mill Creek II Assoc Traverwood EPA LLC Traverwood Properties I LLC City Hall LLC Trackside Restaurant Corp 3965 South State Associates LLC 200 1 Commonwealth LLC Keweenaw LLC API Properties 8 1 5 LLC Traverwood Properties rvIDI LLC Traverwood Properties II LLC 3 1 7 Mavnard LLC 240 1 LLC Traverwood Properties III LLC 330 East Liberty LLC

Villiam C Martin Ann Arbor Michigan

Real Estate Developer Title No Of Percent

Position Shares Owned

Director 130 832 1474

Director

Owner 1 00 Member 50

Member 50

Member 9 895 Member 72

Member 49 Member 34

Member 8 1 33

Member 48 tvlember 49 Member 98

Member 4779

Member 1 8 75

Ovmer 1 00

Member 50

Member 50

Member 63 73

Member 4890

Member 25 Member 49 Member 58 Member 1 00 Member 50

Member 50 Member 9 9 0

Member 50

Member 50 Member 35

middot middot

520 East Liberty LLC Member 35

555 South Forest LLC Member 49

320 South Division LLC Member 49

Rabbit Bay LLC Member 49

Dreamland LLC Member 5 0 South First Associates LLC Member 48798

Martin Family Foundation Owner 1 00

First Charter Service Corp Owner 1 00 Traverwood Bank LLC Member 50 Traverwood Apartments LLC Member 25

1 1 6- 1 20 W Huron LLC Member 25

Date d-_d-_(p_t- __ _

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

P1incipal Occupation

Arbor Bancorp Inc Bank of Ann Arbor

Other Affiliates

Pe1ich + Partners

S ign

Ernest G Perich Ann Arbor Michigan

Advertising Agency Owner Title No Of Percent

Position Shares Owned

Director 1 0200 1 1 5 Director

Owner 1 00

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

360 Advisors

SI Company NuStep Inc Morgan amp State RidgeRun III LLC State ampVei1ture LLC

Pcindview Properties LLC

NuStep IC-Disc Inc

David R S arns Ann Arbor Michigan

Private Investor Title No Of Percent

Position Shares Owned

Director 27488 3 1 0

Director

Managing 1 00

Member Manager 49

Shareholder 20 Shareholder 5000 1 1

Member 100 Member 20 owned by

0 parents

Shareholder 20

pate

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

Sesi Lincoln Mazda Volvo LMV Properties Madison Plaza LLC Sesi Real Estate Investment Sesi Agency Incorporated

Joseph A Sesi Ann Arbor Michigan

Car Dealership Owner Title No Of Percent

Position Shares Owned

Director 7500 084

Director

Owner 1 00 Owner 1 00 Owner 33

1 00 1 00

Date 3 - 9 ltJO$-

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Cynthia H Vilbanks

Ypsilanti Michigan

University Administrator Title No Of Percent

Position Shares Owned

Director 2500 028

Director

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

P1incipal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

Tangent Medical Technologies

NeuMoDx Molecular Inc

Jeffrey S Williams Ann Arbor Michigan

Managing Director Cavanaugh Lake LLC

Title No Of Percent Position Shares Owned

Director 1 000 0 1 1

Director

Chairman amp CEO

Chairman amp CEO

Date l (i K 7A tS-

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Charles E Crone Ann Arbor lvlichigan

Loan Officer Title No Of

Position Shares

VP 1 674

EVP amp Chief Revenue Officer

Signature -7-------==-Igt==-_--middotmiddot_middot _

Percent Owned

0 19

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancom Inc Bank of Ann Arbor

Other Affiliates None

Mark J Slade Ann Arbor lvlichigan

Bmlk CFO Title No Of Percent

Position Shares Owned

VP amp CFO 3684 0 42 1st yp amp

CFO

Signature ---------0---_____ _ Date __ 2-__--j__slt-----

1middot middot

flT

FORlI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor Other Affiliates

None

Cynthia J Livesay Ann Arbor Michigan

Credit Officer Title No Of Percent

Position Shares Owned

VP 2977 034 1st yp

Signature __C--A----4---=------middot __

LO= Date _ _Lmiddot_------middot-S __ _

FORl1 Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc Bank of Ann Arbor

Other Affiliates None

Lyle F Dahlberg Ann Arbor Michigan

Trust Officer Title No Of Percent

Position Shares Owned

VP 1583 0 18 1st yp

Signature __W-----------=--v_L_( ____ __ _ Date __ li__6_z_u_ S-___ _

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Patti R Judson Ann Arbor Micbigan

Bank Officer Title No Of Percent

Position Shares Owned

VP 2225 025

EVP amp COO

c _ 1ih__ Signature -------+--------shy

__

J 1 J 1 6 Date ________ _

• FR Y-6 Cover Page
• Report Item 1 Annual Report to Shareholders
• Report Item 2a Organization Chart
• Report Item 2b Domestic Branch Listing
• Report Item 3 Securities Holders
• Report Item 4 Insiders

FORL1 Y6 (as ofDec 2014) Item 4) Directors and Officers

Name

Address

P1incipal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates Midtown Group Inc

Vhich includes Midtown Realty LLC 610 Guadalupe LLC

City Hall LLC

Hogarth Management LLC

Douglas Lake LLC

Arbor Green II LP

The Tapestry Foundation

MTG Portfolio Ltd

Texas One Capital Mgt LLC

Sixth Street Film Ltd

Sixth Street Management

214-218 South State St LLC

6559 Partners Ltd

Whistler Goods LP

SSF Seventeen LP

HV AC Acquisition Inc

BCL Walker LLC

Rivercity Live LLC

Greenhill Recreation LLC

Thomas P Borders Austin Texas

Business OwnerInvestor

Title No Of Percent Position Shares Owned

Director 651 66 734 Director

President 50

Member 2265 Member 50 Member 100 Partner 23

Director

Limited 495 Partner

Member 3000 General 1 00 Partner

President 1 00 Member 7575 Partner 495 Partner 0 1 Partner 99

Member 20 Member 3 66 Member 35 1 Manager

The bank stock is owned by Arbor Green II LP of which tvfidtown Group Inc is the General Partner owning 1 Mr Borders is the President of Midtown Group Inc and also a 23 limited partner of Arbor Green II LP

Signature

Acici I

Af fiJihJ11-v I

Date ) - J 7 - L

J )) R 0 s e woeic9 I u c_ v(anO) er

i fio C()Qs1 Q r i1-Q LuM LLC lCL(l o Cef

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor Other Affiliates

Arboretum Ventures

Arboretum Ventures II LP

Arboretum Ventures Ila LP

Arboretum Ventures I LLC

Arboretum Ventures I-A LLC

Arboretum Ventures ill LP

Arboretum Investment Manager LLC

Arboretum Investment Manager II LLC

Arboretum Investment Manager Ila LLC

Arboretum Investment Manager III LLC

Jan L Garfinkle Ann Arbor 1vlichigan

Venture Ca pi tali st Title No Of Percent

Position Shares Owned

Director 1 500 0 17 Director

President 680 680 Managing

na 1 0 Director

Managing na 1 0

Director Managing

na 200 Director

Managing na 00

Director Managing

na 1 2 Director

Managing na 680

Member Managing

na 480 Member

Managing na 480

Member

Managing na 3 80

Member

Signature 1-+-middot2rv_-----middot _tU----+---Le-middot _

D u Date _d-)__+_f_) _

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

Synergy Partners LLC

Isadore J Kine Ann Arbor Michigan

Health Care Executive

Title No Of Percent Position Shares Owned

Director 300 003

Director

President amp CEO

Date

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Timothy G Marshall Ann Arbor Michigan

Bank CEO Title No Of Percent

Position Shares Owned

Director amp 1 1 950 1 35 CEO

Director amp CEO

Signature vt Date _1-____J )---l_S_ y

FORi1 Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates Huron Ashley LLP

Traver Village LLP

South First Associates LLC

First Properties Assoc LLP

Millcreek One LLC

Mill Creek II Assoc 3965 South State Associates LLC 2001 Commonwealth LLC

Keweenaw LLC

3 1 7 Maynard LLC

330 East Liberty LLC

520 East Liberty LLC

555 South Forest LLC

320 South Division LLC

Rabbit B ay LLC

1 900 1 948 Walnut LLC

20 1 Depot LLC

Long Timber Ranch LLC

Traverwood Apartments LLC 1 1 6-120 W Huron LLC

Michael C Martin Ann Arbor Michigan

Real Estate Developer Title No Of Percent

Position Shares Owned

D irector 2 1000 237

Director

Member 2450

Member 3200

Member 1 9

Member 25

Member 26 1 1

Partner 3 5 63

Member 32

Member 1

Member 20

Member 3505

Member 1 5

Member 1 5

Member 1

Member 1

Member 2450

Member 25

Member 50

Member 1 0

Member 25

Member

25

Date _Q_____g_ep_) t_-

FORlVI Y6 (as of D ec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

B ank of Ann Arbor

Other Affiliates First Martin Corporation C-3 Partners Depot Street Benevolent Assn Homestead Commons LLC Homestead Office LLC Huron Ashley LLC Traver Village LLC Second Properties Assoc LLC First Properties Assoc LLC MainWashington Assoc LLC Green Road Assoc LLC Mill Creek One LLC Mill Creek II Assoc Traverwood EPA LLC Traverwood Properties I LLC City Hall LLC Trackside Restaurant Corp 3965 South State Associates LLC 200 1 Commonwealth LLC Keweenaw LLC API Properties 8 1 5 LLC Traverwood Properties rvIDI LLC Traverwood Properties II LLC 3 1 7 Mavnard LLC 240 1 LLC Traverwood Properties III LLC 330 East Liberty LLC

Villiam C Martin Ann Arbor Michigan

Real Estate Developer Title No Of Percent

Position Shares Owned

Director 130 832 1474

Director

Owner 1 00 Member 50

Member 50

Member 9 895 Member 72

Member 49 Member 34

Member 8 1 33

Member 48 tvlember 49 Member 98

Member 4779

Member 1 8 75

Ovmer 1 00

Member 50

Member 50

Member 63 73

Member 4890

Member 25 Member 49 Member 58 Member 1 00 Member 50

Member 50 Member 9 9 0

Member 50

Member 50 Member 35

middot middot

520 East Liberty LLC Member 35

555 South Forest LLC Member 49

320 South Division LLC Member 49

Rabbit Bay LLC Member 49

Dreamland LLC Member 5 0 South First Associates LLC Member 48798

Martin Family Foundation Owner 1 00

First Charter Service Corp Owner 1 00 Traverwood Bank LLC Member 50 Traverwood Apartments LLC Member 25

1 1 6- 1 20 W Huron LLC Member 25

Date d-_d-_(p_t- __ _

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

P1incipal Occupation

Arbor Bancorp Inc Bank of Ann Arbor

Other Affiliates

Pe1ich + Partners

S ign

Ernest G Perich Ann Arbor Michigan

Advertising Agency Owner Title No Of Percent

Position Shares Owned

Director 1 0200 1 1 5 Director

Owner 1 00

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

360 Advisors

SI Company NuStep Inc Morgan amp State RidgeRun III LLC State ampVei1ture LLC

Pcindview Properties LLC

NuStep IC-Disc Inc

David R S arns Ann Arbor Michigan

Private Investor Title No Of Percent

Position Shares Owned

Director 27488 3 1 0

Director

Managing 1 00

Member Manager 49

Shareholder 20 Shareholder 5000 1 1

Member 100 Member 20 owned by

0 parents

Shareholder 20

pate

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

Sesi Lincoln Mazda Volvo LMV Properties Madison Plaza LLC Sesi Real Estate Investment Sesi Agency Incorporated

Joseph A Sesi Ann Arbor Michigan

Car Dealership Owner Title No Of Percent

Position Shares Owned

Director 7500 084

Director

Owner 1 00 Owner 1 00 Owner 33

1 00 1 00

Date 3 - 9 ltJO$-

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Cynthia H Vilbanks

Ypsilanti Michigan

University Administrator Title No Of Percent

Position Shares Owned

Director 2500 028

Director

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

P1incipal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

Tangent Medical Technologies

NeuMoDx Molecular Inc

Jeffrey S Williams Ann Arbor Michigan

Managing Director Cavanaugh Lake LLC

Title No Of Percent Position Shares Owned

Director 1 000 0 1 1

Director

Chairman amp CEO

Chairman amp CEO

Date l (i K 7A tS-

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Charles E Crone Ann Arbor lvlichigan

Loan Officer Title No Of

Position Shares

VP 1 674

EVP amp Chief Revenue Officer

Signature -7-------==-Igt==-_--middotmiddot_middot _

Percent Owned

0 19

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancom Inc Bank of Ann Arbor

Other Affiliates None

Mark J Slade Ann Arbor lvlichigan

Bmlk CFO Title No Of Percent

Position Shares Owned

VP amp CFO 3684 0 42 1st yp amp

CFO

Signature ---------0---_____ _ Date __ 2-__--j__slt-----

1middot middot

flT

FORlI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor Other Affiliates

None

Cynthia J Livesay Ann Arbor Michigan

Credit Officer Title No Of Percent

Position Shares Owned

VP 2977 034 1st yp

Signature __C--A----4---=------middot __

LO= Date _ _Lmiddot_------middot-S __ _

FORl1 Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc Bank of Ann Arbor

Other Affiliates None

Lyle F Dahlberg Ann Arbor Michigan

Trust Officer Title No Of Percent

Position Shares Owned

VP 1583 0 18 1st yp

Signature __W-----------=--v_L_( ____ __ _ Date __ li__6_z_u_ S-___ _

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Patti R Judson Ann Arbor Micbigan

Bank Officer Title No Of Percent

Position Shares Owned

VP 2225 025

EVP amp COO

c _ 1ih__ Signature -------+--------shy

__

J 1 J 1 6 Date ________ _

• FR Y-6 Cover Page
• Report Item 1 Annual Report to Shareholders
• Report Item 2a Organization Chart
• Report Item 2b Domestic Branch Listing
• Report Item 3 Securities Holders
• Report Item 4 Insiders

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor Other Affiliates

Arboretum Ventures

Arboretum Ventures II LP

Arboretum Ventures Ila LP

Arboretum Ventures I LLC

Arboretum Ventures I-A LLC

Arboretum Ventures ill LP

Arboretum Investment Manager LLC

Arboretum Investment Manager II LLC

Arboretum Investment Manager Ila LLC

Arboretum Investment Manager III LLC

Jan L Garfinkle Ann Arbor 1vlichigan

Venture Ca pi tali st Title No Of Percent

Position Shares Owned

Director 1 500 0 17 Director

President 680 680 Managing

na 1 0 Director

Managing na 1 0

Director Managing

na 200 Director

Managing na 00

Director Managing

na 1 2 Director

Managing na 680

Member Managing

na 480 Member

Managing na 480

Member

Managing na 3 80

Member

Signature 1-+-middot2rv_-----middot _tU----+---Le-middot _

D u Date _d-)__+_f_) _

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

Synergy Partners LLC

Isadore J Kine Ann Arbor Michigan

Health Care Executive

Title No Of Percent Position Shares Owned

Director 300 003

Director

President amp CEO

Date

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Timothy G Marshall Ann Arbor Michigan

Bank CEO Title No Of Percent

Position Shares Owned

Director amp 1 1 950 1 35 CEO

Director amp CEO

Signature vt Date _1-____J )---l_S_ y

FORi1 Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates Huron Ashley LLP

Traver Village LLP

South First Associates LLC

First Properties Assoc LLP

Millcreek One LLC

Mill Creek II Assoc 3965 South State Associates LLC 2001 Commonwealth LLC

Keweenaw LLC

3 1 7 Maynard LLC

330 East Liberty LLC

520 East Liberty LLC

555 South Forest LLC

320 South Division LLC

Rabbit B ay LLC

1 900 1 948 Walnut LLC

20 1 Depot LLC

Long Timber Ranch LLC

Traverwood Apartments LLC 1 1 6-120 W Huron LLC

Michael C Martin Ann Arbor Michigan

Real Estate Developer Title No Of Percent

Position Shares Owned

D irector 2 1000 237

Director

Member 2450

Member 3200

Member 1 9

Member 25

Member 26 1 1

Partner 3 5 63

Member 32

Member 1

Member 20

Member 3505

Member 1 5

Member 1 5

Member 1

Member 1

Member 2450

Member 25

Member 50

Member 1 0

Member 25

Member

25

Date _Q_____g_ep_) t_-

FORlVI Y6 (as of D ec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

B ank of Ann Arbor

Other Affiliates First Martin Corporation C-3 Partners Depot Street Benevolent Assn Homestead Commons LLC Homestead Office LLC Huron Ashley LLC Traver Village LLC Second Properties Assoc LLC First Properties Assoc LLC MainWashington Assoc LLC Green Road Assoc LLC Mill Creek One LLC Mill Creek II Assoc Traverwood EPA LLC Traverwood Properties I LLC City Hall LLC Trackside Restaurant Corp 3965 South State Associates LLC 200 1 Commonwealth LLC Keweenaw LLC API Properties 8 1 5 LLC Traverwood Properties rvIDI LLC Traverwood Properties II LLC 3 1 7 Mavnard LLC 240 1 LLC Traverwood Properties III LLC 330 East Liberty LLC

Villiam C Martin Ann Arbor Michigan

Real Estate Developer Title No Of Percent

Position Shares Owned

Director 130 832 1474

Director

Owner 1 00 Member 50

Member 50

Member 9 895 Member 72

Member 49 Member 34

Member 8 1 33

Member 48 tvlember 49 Member 98

Member 4779

Member 1 8 75

Ovmer 1 00

Member 50

Member 50

Member 63 73

Member 4890

Member 25 Member 49 Member 58 Member 1 00 Member 50

Member 50 Member 9 9 0

Member 50

Member 50 Member 35

middot middot

520 East Liberty LLC Member 35

555 South Forest LLC Member 49

320 South Division LLC Member 49

Rabbit Bay LLC Member 49

Dreamland LLC Member 5 0 South First Associates LLC Member 48798

Martin Family Foundation Owner 1 00

First Charter Service Corp Owner 1 00 Traverwood Bank LLC Member 50 Traverwood Apartments LLC Member 25

1 1 6- 1 20 W Huron LLC Member 25

Date d-_d-_(p_t- __ _

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

P1incipal Occupation

Arbor Bancorp Inc Bank of Ann Arbor

Other Affiliates

Pe1ich + Partners

S ign

Ernest G Perich Ann Arbor Michigan

Advertising Agency Owner Title No Of Percent

Position Shares Owned

Director 1 0200 1 1 5 Director

Owner 1 00

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

360 Advisors

SI Company NuStep Inc Morgan amp State RidgeRun III LLC State ampVei1ture LLC

Pcindview Properties LLC

NuStep IC-Disc Inc

David R S arns Ann Arbor Michigan

Private Investor Title No Of Percent

Position Shares Owned

Director 27488 3 1 0

Director

Managing 1 00

Member Manager 49

Shareholder 20 Shareholder 5000 1 1

Member 100 Member 20 owned by

0 parents

Shareholder 20

pate

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

Sesi Lincoln Mazda Volvo LMV Properties Madison Plaza LLC Sesi Real Estate Investment Sesi Agency Incorporated

Joseph A Sesi Ann Arbor Michigan

Car Dealership Owner Title No Of Percent

Position Shares Owned

Director 7500 084

Director

Owner 1 00 Owner 1 00 Owner 33

1 00 1 00

Date 3 - 9 ltJO$-

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Cynthia H Vilbanks

Ypsilanti Michigan

University Administrator Title No Of Percent

Position Shares Owned

Director 2500 028

Director

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

P1incipal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

Tangent Medical Technologies

NeuMoDx Molecular Inc

Jeffrey S Williams Ann Arbor Michigan

Managing Director Cavanaugh Lake LLC

Title No Of Percent Position Shares Owned

Director 1 000 0 1 1

Director

Chairman amp CEO

Chairman amp CEO

Date l (i K 7A tS-

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Charles E Crone Ann Arbor lvlichigan

Loan Officer Title No Of

Position Shares

VP 1 674

EVP amp Chief Revenue Officer

Signature -7-------==-Igt==-_--middotmiddot_middot _

Percent Owned

0 19

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancom Inc Bank of Ann Arbor

Other Affiliates None

Mark J Slade Ann Arbor lvlichigan

Bmlk CFO Title No Of Percent

Position Shares Owned

VP amp CFO 3684 0 42 1st yp amp

CFO

Signature ---------0---_____ _ Date __ 2-__--j__slt-----

1middot middot

flT

FORlI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor Other Affiliates

None

Cynthia J Livesay Ann Arbor Michigan

Credit Officer Title No Of Percent

Position Shares Owned

VP 2977 034 1st yp

Signature __C--A----4---=------middot __

LO= Date _ _Lmiddot_------middot-S __ _

FORl1 Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc Bank of Ann Arbor

Other Affiliates None

Lyle F Dahlberg Ann Arbor Michigan

Trust Officer Title No Of Percent

Position Shares Owned

VP 1583 0 18 1st yp

Signature __W-----------=--v_L_( ____ __ _ Date __ li__6_z_u_ S-___ _

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Patti R Judson Ann Arbor Micbigan

Bank Officer Title No Of Percent

Position Shares Owned

VP 2225 025

EVP amp COO

c _ 1ih__ Signature -------+--------shy

__

J 1 J 1 6 Date ________ _

• FR Y-6 Cover Page
• Report Item 1 Annual Report to Shareholders
• Report Item 2a Organization Chart
• Report Item 2b Domestic Branch Listing
• Report Item 3 Securities Holders
• Report Item 4 Insiders

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

Synergy Partners LLC

Isadore J Kine Ann Arbor Michigan

Health Care Executive

Title No Of Percent Position Shares Owned

Director 300 003

Director

President amp CEO

Date

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Timothy G Marshall Ann Arbor Michigan

Bank CEO Title No Of Percent

Position Shares Owned

Director amp 1 1 950 1 35 CEO

Director amp CEO

Signature vt Date _1-____J )---l_S_ y

FORi1 Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates Huron Ashley LLP

Traver Village LLP

South First Associates LLC

First Properties Assoc LLP

Millcreek One LLC

Mill Creek II Assoc 3965 South State Associates LLC 2001 Commonwealth LLC

Keweenaw LLC

3 1 7 Maynard LLC

330 East Liberty LLC

520 East Liberty LLC

555 South Forest LLC

320 South Division LLC

Rabbit B ay LLC

1 900 1 948 Walnut LLC

20 1 Depot LLC

Long Timber Ranch LLC

Traverwood Apartments LLC 1 1 6-120 W Huron LLC

Michael C Martin Ann Arbor Michigan

Real Estate Developer Title No Of Percent

Position Shares Owned

D irector 2 1000 237

Director

Member 2450

Member 3200

Member 1 9

Member 25

Member 26 1 1

Partner 3 5 63

Member 32

Member 1

Member 20

Member 3505

Member 1 5

Member 1 5

Member 1

Member 1

Member 2450

Member 25

Member 50

Member 1 0

Member 25

Member

25

Date _Q_____g_ep_) t_-

FORlVI Y6 (as of D ec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

B ank of Ann Arbor

Other Affiliates First Martin Corporation C-3 Partners Depot Street Benevolent Assn Homestead Commons LLC Homestead Office LLC Huron Ashley LLC Traver Village LLC Second Properties Assoc LLC First Properties Assoc LLC MainWashington Assoc LLC Green Road Assoc LLC Mill Creek One LLC Mill Creek II Assoc Traverwood EPA LLC Traverwood Properties I LLC City Hall LLC Trackside Restaurant Corp 3965 South State Associates LLC 200 1 Commonwealth LLC Keweenaw LLC API Properties 8 1 5 LLC Traverwood Properties rvIDI LLC Traverwood Properties II LLC 3 1 7 Mavnard LLC 240 1 LLC Traverwood Properties III LLC 330 East Liberty LLC

Villiam C Martin Ann Arbor Michigan

Real Estate Developer Title No Of Percent

Position Shares Owned

Director 130 832 1474

Director

Owner 1 00 Member 50

Member 50

Member 9 895 Member 72

Member 49 Member 34

Member 8 1 33

Member 48 tvlember 49 Member 98

Member 4779

Member 1 8 75

Ovmer 1 00

Member 50

Member 50

Member 63 73

Member 4890

Member 25 Member 49 Member 58 Member 1 00 Member 50

Member 50 Member 9 9 0

Member 50

Member 50 Member 35

middot middot

520 East Liberty LLC Member 35

555 South Forest LLC Member 49

320 South Division LLC Member 49

Rabbit Bay LLC Member 49

Dreamland LLC Member 5 0 South First Associates LLC Member 48798

Martin Family Foundation Owner 1 00

First Charter Service Corp Owner 1 00 Traverwood Bank LLC Member 50 Traverwood Apartments LLC Member 25

1 1 6- 1 20 W Huron LLC Member 25

Date d-_d-_(p_t- __ _

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

P1incipal Occupation

Arbor Bancorp Inc Bank of Ann Arbor

Other Affiliates

Pe1ich + Partners

S ign

Ernest G Perich Ann Arbor Michigan

Advertising Agency Owner Title No Of Percent

Position Shares Owned

Director 1 0200 1 1 5 Director

Owner 1 00

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

360 Advisors

SI Company NuStep Inc Morgan amp State RidgeRun III LLC State ampVei1ture LLC

Pcindview Properties LLC

NuStep IC-Disc Inc

David R S arns Ann Arbor Michigan

Private Investor Title No Of Percent

Position Shares Owned

Director 27488 3 1 0

Director

Managing 1 00

Member Manager 49

Shareholder 20 Shareholder 5000 1 1

Member 100 Member 20 owned by

0 parents

Shareholder 20

pate

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

Sesi Lincoln Mazda Volvo LMV Properties Madison Plaza LLC Sesi Real Estate Investment Sesi Agency Incorporated

Joseph A Sesi Ann Arbor Michigan

Car Dealership Owner Title No Of Percent

Position Shares Owned

Director 7500 084

Director

Owner 1 00 Owner 1 00 Owner 33

1 00 1 00

Date 3 - 9 ltJO$-

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Cynthia H Vilbanks

Ypsilanti Michigan

University Administrator Title No Of Percent

Position Shares Owned

Director 2500 028

Director

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

P1incipal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

Tangent Medical Technologies

NeuMoDx Molecular Inc

Jeffrey S Williams Ann Arbor Michigan

Managing Director Cavanaugh Lake LLC

Title No Of Percent Position Shares Owned

Director 1 000 0 1 1

Director

Chairman amp CEO

Chairman amp CEO

Date l (i K 7A tS-

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Charles E Crone Ann Arbor lvlichigan

Loan Officer Title No Of

Position Shares

VP 1 674

EVP amp Chief Revenue Officer

Signature -7-------==-Igt==-_--middotmiddot_middot _

Percent Owned

0 19

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancom Inc Bank of Ann Arbor

Other Affiliates None

Mark J Slade Ann Arbor lvlichigan

Bmlk CFO Title No Of Percent

Position Shares Owned

VP amp CFO 3684 0 42 1st yp amp

CFO

Signature ---------0---_____ _ Date __ 2-__--j__slt-----

1middot middot

flT

FORlI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor Other Affiliates

None

Cynthia J Livesay Ann Arbor Michigan

Credit Officer Title No Of Percent

Position Shares Owned

VP 2977 034 1st yp

Signature __C--A----4---=------middot __

LO= Date _ _Lmiddot_------middot-S __ _

FORl1 Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc Bank of Ann Arbor

Other Affiliates None

Lyle F Dahlberg Ann Arbor Michigan

Trust Officer Title No Of Percent

Position Shares Owned

VP 1583 0 18 1st yp

Signature __W-----------=--v_L_( ____ __ _ Date __ li__6_z_u_ S-___ _

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Patti R Judson Ann Arbor Micbigan

Bank Officer Title No Of Percent

Position Shares Owned

VP 2225 025

EVP amp COO

c _ 1ih__ Signature -------+--------shy

__

J 1 J 1 6 Date ________ _

• FR Y-6 Cover Page
• Report Item 1 Annual Report to Shareholders
• Report Item 2a Organization Chart
• Report Item 2b Domestic Branch Listing
• Report Item 3 Securities Holders
• Report Item 4 Insiders

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Timothy G Marshall Ann Arbor Michigan

Bank CEO Title No Of Percent

Position Shares Owned

Director amp 1 1 950 1 35 CEO

Director amp CEO

Signature vt Date _1-____J )---l_S_ y

FORi1 Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates Huron Ashley LLP

Traver Village LLP

South First Associates LLC

First Properties Assoc LLP

Millcreek One LLC

Mill Creek II Assoc 3965 South State Associates LLC 2001 Commonwealth LLC

Keweenaw LLC

3 1 7 Maynard LLC

330 East Liberty LLC

520 East Liberty LLC

555 South Forest LLC

320 South Division LLC

Rabbit B ay LLC

1 900 1 948 Walnut LLC

20 1 Depot LLC

Long Timber Ranch LLC

Traverwood Apartments LLC 1 1 6-120 W Huron LLC

Michael C Martin Ann Arbor Michigan

Real Estate Developer Title No Of Percent

Position Shares Owned

D irector 2 1000 237

Director

Member 2450

Member 3200

Member 1 9

Member 25

Member 26 1 1

Partner 3 5 63

Member 32

Member 1

Member 20

Member 3505

Member 1 5

Member 1 5

Member 1

Member 1

Member 2450

Member 25

Member 50

Member 1 0

Member 25

Member

25

Date _Q_____g_ep_) t_-

FORlVI Y6 (as of D ec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

B ank of Ann Arbor

Other Affiliates First Martin Corporation C-3 Partners Depot Street Benevolent Assn Homestead Commons LLC Homestead Office LLC Huron Ashley LLC Traver Village LLC Second Properties Assoc LLC First Properties Assoc LLC MainWashington Assoc LLC Green Road Assoc LLC Mill Creek One LLC Mill Creek II Assoc Traverwood EPA LLC Traverwood Properties I LLC City Hall LLC Trackside Restaurant Corp 3965 South State Associates LLC 200 1 Commonwealth LLC Keweenaw LLC API Properties 8 1 5 LLC Traverwood Properties rvIDI LLC Traverwood Properties II LLC 3 1 7 Mavnard LLC 240 1 LLC Traverwood Properties III LLC 330 East Liberty LLC

Villiam C Martin Ann Arbor Michigan

Real Estate Developer Title No Of Percent

Position Shares Owned

Director 130 832 1474

Director

Owner 1 00 Member 50

Member 50

Member 9 895 Member 72

Member 49 Member 34

Member 8 1 33

Member 48 tvlember 49 Member 98

Member 4779

Member 1 8 75

Ovmer 1 00

Member 50

Member 50

Member 63 73

Member 4890

Member 25 Member 49 Member 58 Member 1 00 Member 50

Member 50 Member 9 9 0

Member 50

Member 50 Member 35

middot middot

520 East Liberty LLC Member 35

555 South Forest LLC Member 49

320 South Division LLC Member 49

Rabbit Bay LLC Member 49

Dreamland LLC Member 5 0 South First Associates LLC Member 48798

Martin Family Foundation Owner 1 00

First Charter Service Corp Owner 1 00 Traverwood Bank LLC Member 50 Traverwood Apartments LLC Member 25

1 1 6- 1 20 W Huron LLC Member 25

Date d-_d-_(p_t- __ _

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

P1incipal Occupation

Arbor Bancorp Inc Bank of Ann Arbor

Other Affiliates

Pe1ich + Partners

S ign

Ernest G Perich Ann Arbor Michigan

Advertising Agency Owner Title No Of Percent

Position Shares Owned

Director 1 0200 1 1 5 Director

Owner 1 00

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

360 Advisors

SI Company NuStep Inc Morgan amp State RidgeRun III LLC State ampVei1ture LLC

Pcindview Properties LLC

NuStep IC-Disc Inc

David R S arns Ann Arbor Michigan

Private Investor Title No Of Percent

Position Shares Owned

Director 27488 3 1 0

Director

Managing 1 00

Member Manager 49

Shareholder 20 Shareholder 5000 1 1

Member 100 Member 20 owned by

0 parents

Shareholder 20

pate

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

Sesi Lincoln Mazda Volvo LMV Properties Madison Plaza LLC Sesi Real Estate Investment Sesi Agency Incorporated

Joseph A Sesi Ann Arbor Michigan

Car Dealership Owner Title No Of Percent

Position Shares Owned

Director 7500 084

Director

Owner 1 00 Owner 1 00 Owner 33

1 00 1 00

Date 3 - 9 ltJO$-

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Cynthia H Vilbanks

Ypsilanti Michigan

University Administrator Title No Of Percent

Position Shares Owned

Director 2500 028

Director

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

P1incipal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

Tangent Medical Technologies

NeuMoDx Molecular Inc

Jeffrey S Williams Ann Arbor Michigan

Managing Director Cavanaugh Lake LLC

Title No Of Percent Position Shares Owned

Director 1 000 0 1 1

Director

Chairman amp CEO

Chairman amp CEO

Date l (i K 7A tS-

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Charles E Crone Ann Arbor lvlichigan

Loan Officer Title No Of

Position Shares

VP 1 674

EVP amp Chief Revenue Officer

Signature -7-------==-Igt==-_--middotmiddot_middot _

Percent Owned

0 19

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancom Inc Bank of Ann Arbor

Other Affiliates None

Mark J Slade Ann Arbor lvlichigan

Bmlk CFO Title No Of Percent

Position Shares Owned

VP amp CFO 3684 0 42 1st yp amp

CFO

Signature ---------0---_____ _ Date __ 2-__--j__slt-----

1middot middot

flT

FORlI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor Other Affiliates

None

Cynthia J Livesay Ann Arbor Michigan

Credit Officer Title No Of Percent

Position Shares Owned

VP 2977 034 1st yp

Signature __C--A----4---=------middot __

LO= Date _ _Lmiddot_------middot-S __ _

FORl1 Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc Bank of Ann Arbor

Other Affiliates None

Lyle F Dahlberg Ann Arbor Michigan

Trust Officer Title No Of Percent

Position Shares Owned

VP 1583 0 18 1st yp

Signature __W-----------=--v_L_( ____ __ _ Date __ li__6_z_u_ S-___ _

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Patti R Judson Ann Arbor Micbigan

Bank Officer Title No Of Percent

Position Shares Owned

VP 2225 025

EVP amp COO

c _ 1ih__ Signature -------+--------shy

__

J 1 J 1 6 Date ________ _

• FR Y-6 Cover Page
• Report Item 1 Annual Report to Shareholders
• Report Item 2a Organization Chart
• Report Item 2b Domestic Branch Listing
• Report Item 3 Securities Holders
• Report Item 4 Insiders

FORi1 Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates Huron Ashley LLP

Traver Village LLP

South First Associates LLC

First Properties Assoc LLP

Millcreek One LLC

Mill Creek II Assoc 3965 South State Associates LLC 2001 Commonwealth LLC

Keweenaw LLC

3 1 7 Maynard LLC

330 East Liberty LLC

520 East Liberty LLC

555 South Forest LLC

320 South Division LLC

Rabbit B ay LLC

1 900 1 948 Walnut LLC

20 1 Depot LLC

Long Timber Ranch LLC

Traverwood Apartments LLC 1 1 6-120 W Huron LLC

Michael C Martin Ann Arbor Michigan

Real Estate Developer Title No Of Percent

Position Shares Owned

D irector 2 1000 237

Director

Member 2450

Member 3200

Member 1 9

Member 25

Member 26 1 1

Partner 3 5 63

Member 32

Member 1

Member 20

Member 3505

Member 1 5

Member 1 5

Member 1

Member 1

Member 2450

Member 25

Member 50

Member 1 0

Member 25

Member

25

Date _Q_____g_ep_) t_-

FORlVI Y6 (as of D ec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

B ank of Ann Arbor

Other Affiliates First Martin Corporation C-3 Partners Depot Street Benevolent Assn Homestead Commons LLC Homestead Office LLC Huron Ashley LLC Traver Village LLC Second Properties Assoc LLC First Properties Assoc LLC MainWashington Assoc LLC Green Road Assoc LLC Mill Creek One LLC Mill Creek II Assoc Traverwood EPA LLC Traverwood Properties I LLC City Hall LLC Trackside Restaurant Corp 3965 South State Associates LLC 200 1 Commonwealth LLC Keweenaw LLC API Properties 8 1 5 LLC Traverwood Properties rvIDI LLC Traverwood Properties II LLC 3 1 7 Mavnard LLC 240 1 LLC Traverwood Properties III LLC 330 East Liberty LLC

Villiam C Martin Ann Arbor Michigan

Real Estate Developer Title No Of Percent

Position Shares Owned

Director 130 832 1474

Director

Owner 1 00 Member 50

Member 50

Member 9 895 Member 72

Member 49 Member 34

Member 8 1 33

Member 48 tvlember 49 Member 98

Member 4779

Member 1 8 75

Ovmer 1 00

Member 50

Member 50

Member 63 73

Member 4890

Member 25 Member 49 Member 58 Member 1 00 Member 50

Member 50 Member 9 9 0

Member 50

Member 50 Member 35

middot middot

520 East Liberty LLC Member 35

555 South Forest LLC Member 49

320 South Division LLC Member 49

Rabbit Bay LLC Member 49

Dreamland LLC Member 5 0 South First Associates LLC Member 48798

Martin Family Foundation Owner 1 00

First Charter Service Corp Owner 1 00 Traverwood Bank LLC Member 50 Traverwood Apartments LLC Member 25

1 1 6- 1 20 W Huron LLC Member 25

Date d-_d-_(p_t- __ _

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

P1incipal Occupation

Arbor Bancorp Inc Bank of Ann Arbor

Other Affiliates

Pe1ich + Partners

S ign

Ernest G Perich Ann Arbor Michigan

Advertising Agency Owner Title No Of Percent

Position Shares Owned

Director 1 0200 1 1 5 Director

Owner 1 00

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

360 Advisors

SI Company NuStep Inc Morgan amp State RidgeRun III LLC State ampVei1ture LLC

Pcindview Properties LLC

NuStep IC-Disc Inc

David R S arns Ann Arbor Michigan

Private Investor Title No Of Percent

Position Shares Owned

Director 27488 3 1 0

Director

Managing 1 00

Member Manager 49

Shareholder 20 Shareholder 5000 1 1

Member 100 Member 20 owned by

0 parents

Shareholder 20

pate

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

Sesi Lincoln Mazda Volvo LMV Properties Madison Plaza LLC Sesi Real Estate Investment Sesi Agency Incorporated

Joseph A Sesi Ann Arbor Michigan

Car Dealership Owner Title No Of Percent

Position Shares Owned

Director 7500 084

Director

Owner 1 00 Owner 1 00 Owner 33

1 00 1 00

Date 3 - 9 ltJO$-

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Cynthia H Vilbanks

Ypsilanti Michigan

University Administrator Title No Of Percent

Position Shares Owned

Director 2500 028

Director

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

P1incipal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

Tangent Medical Technologies

NeuMoDx Molecular Inc

Jeffrey S Williams Ann Arbor Michigan

Managing Director Cavanaugh Lake LLC

Title No Of Percent Position Shares Owned

Director 1 000 0 1 1

Director

Chairman amp CEO

Chairman amp CEO

Date l (i K 7A tS-

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Charles E Crone Ann Arbor lvlichigan

Loan Officer Title No Of

Position Shares

VP 1 674

EVP amp Chief Revenue Officer

Signature -7-------==-Igt==-_--middotmiddot_middot _

Percent Owned

0 19

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancom Inc Bank of Ann Arbor

Other Affiliates None

Mark J Slade Ann Arbor lvlichigan

Bmlk CFO Title No Of Percent

Position Shares Owned

VP amp CFO 3684 0 42 1st yp amp

CFO

Signature ---------0---_____ _ Date __ 2-__--j__slt-----

1middot middot

flT

FORlI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor Other Affiliates

None

Cynthia J Livesay Ann Arbor Michigan

Credit Officer Title No Of Percent

Position Shares Owned

VP 2977 034 1st yp

Signature __C--A----4---=------middot __

LO= Date _ _Lmiddot_------middot-S __ _

FORl1 Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc Bank of Ann Arbor

Other Affiliates None

Lyle F Dahlberg Ann Arbor Michigan

Trust Officer Title No Of Percent

Position Shares Owned

VP 1583 0 18 1st yp

Signature __W-----------=--v_L_( ____ __ _ Date __ li__6_z_u_ S-___ _

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Patti R Judson Ann Arbor Micbigan

Bank Officer Title No Of Percent

Position Shares Owned

VP 2225 025

EVP amp COO

c _ 1ih__ Signature -------+--------shy

__

J 1 J 1 6 Date ________ _

• FR Y-6 Cover Page
• Report Item 1 Annual Report to Shareholders
• Report Item 2a Organization Chart
• Report Item 2b Domestic Branch Listing
• Report Item 3 Securities Holders
• Report Item 4 Insiders

FORlVI Y6 (as of D ec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

B ank of Ann Arbor

Other Affiliates First Martin Corporation C-3 Partners Depot Street Benevolent Assn Homestead Commons LLC Homestead Office LLC Huron Ashley LLC Traver Village LLC Second Properties Assoc LLC First Properties Assoc LLC MainWashington Assoc LLC Green Road Assoc LLC Mill Creek One LLC Mill Creek II Assoc Traverwood EPA LLC Traverwood Properties I LLC City Hall LLC Trackside Restaurant Corp 3965 South State Associates LLC 200 1 Commonwealth LLC Keweenaw LLC API Properties 8 1 5 LLC Traverwood Properties rvIDI LLC Traverwood Properties II LLC 3 1 7 Mavnard LLC 240 1 LLC Traverwood Properties III LLC 330 East Liberty LLC

Villiam C Martin Ann Arbor Michigan

Real Estate Developer Title No Of Percent

Position Shares Owned

Director 130 832 1474

Director

Owner 1 00 Member 50

Member 50

Member 9 895 Member 72

Member 49 Member 34

Member 8 1 33

Member 48 tvlember 49 Member 98

Member 4779

Member 1 8 75

Ovmer 1 00

Member 50

Member 50

Member 63 73

Member 4890

Member 25 Member 49 Member 58 Member 1 00 Member 50

Member 50 Member 9 9 0

Member 50

Member 50 Member 35

middot middot

520 East Liberty LLC Member 35

555 South Forest LLC Member 49

320 South Division LLC Member 49

Rabbit Bay LLC Member 49

Dreamland LLC Member 5 0 South First Associates LLC Member 48798

Martin Family Foundation Owner 1 00

First Charter Service Corp Owner 1 00 Traverwood Bank LLC Member 50 Traverwood Apartments LLC Member 25

1 1 6- 1 20 W Huron LLC Member 25

Date d-_d-_(p_t- __ _

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

P1incipal Occupation

Arbor Bancorp Inc Bank of Ann Arbor

Other Affiliates

Pe1ich + Partners

S ign

Ernest G Perich Ann Arbor Michigan

Advertising Agency Owner Title No Of Percent

Position Shares Owned

Director 1 0200 1 1 5 Director

Owner 1 00

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

360 Advisors

SI Company NuStep Inc Morgan amp State RidgeRun III LLC State ampVei1ture LLC

Pcindview Properties LLC

NuStep IC-Disc Inc

David R S arns Ann Arbor Michigan

Private Investor Title No Of Percent

Position Shares Owned

Director 27488 3 1 0

Director

Managing 1 00

Member Manager 49

Shareholder 20 Shareholder 5000 1 1

Member 100 Member 20 owned by

0 parents

Shareholder 20

pate

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

Sesi Lincoln Mazda Volvo LMV Properties Madison Plaza LLC Sesi Real Estate Investment Sesi Agency Incorporated

Joseph A Sesi Ann Arbor Michigan

Car Dealership Owner Title No Of Percent

Position Shares Owned

Director 7500 084

Director

Owner 1 00 Owner 1 00 Owner 33

1 00 1 00

Date 3 - 9 ltJO$-

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Cynthia H Vilbanks

Ypsilanti Michigan

University Administrator Title No Of Percent

Position Shares Owned

Director 2500 028

Director

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

P1incipal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

Tangent Medical Technologies

NeuMoDx Molecular Inc

Jeffrey S Williams Ann Arbor Michigan

Managing Director Cavanaugh Lake LLC

Title No Of Percent Position Shares Owned

Director 1 000 0 1 1

Director

Chairman amp CEO

Chairman amp CEO

Date l (i K 7A tS-

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Charles E Crone Ann Arbor lvlichigan

Loan Officer Title No Of

Position Shares

VP 1 674

EVP amp Chief Revenue Officer

Signature -7-------==-Igt==-_--middotmiddot_middot _

Percent Owned

0 19

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancom Inc Bank of Ann Arbor

Other Affiliates None

Mark J Slade Ann Arbor lvlichigan

Bmlk CFO Title No Of Percent

Position Shares Owned

VP amp CFO 3684 0 42 1st yp amp

CFO

Signature ---------0---_____ _ Date __ 2-__--j__slt-----

1middot middot

flT

FORlI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor Other Affiliates

None

Cynthia J Livesay Ann Arbor Michigan

Credit Officer Title No Of Percent

Position Shares Owned

VP 2977 034 1st yp

Signature __C--A----4---=------middot __

LO= Date _ _Lmiddot_------middot-S __ _

FORl1 Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc Bank of Ann Arbor

Other Affiliates None

Lyle F Dahlberg Ann Arbor Michigan

Trust Officer Title No Of Percent

Position Shares Owned

VP 1583 0 18 1st yp

Signature __W-----------=--v_L_( ____ __ _ Date __ li__6_z_u_ S-___ _

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Patti R Judson Ann Arbor Micbigan

Bank Officer Title No Of Percent

Position Shares Owned

VP 2225 025

EVP amp COO

c _ 1ih__ Signature -------+--------shy

__

J 1 J 1 6 Date ________ _

• FR Y-6 Cover Page
• Report Item 1 Annual Report to Shareholders
• Report Item 2a Organization Chart
• Report Item 2b Domestic Branch Listing
• Report Item 3 Securities Holders
• Report Item 4 Insiders

middot middot

520 East Liberty LLC Member 35

555 South Forest LLC Member 49

320 South Division LLC Member 49

Rabbit Bay LLC Member 49

Dreamland LLC Member 5 0 South First Associates LLC Member 48798

Martin Family Foundation Owner 1 00

First Charter Service Corp Owner 1 00 Traverwood Bank LLC Member 50 Traverwood Apartments LLC Member 25

1 1 6- 1 20 W Huron LLC Member 25

Date d-_d-_(p_t- __ _

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

P1incipal Occupation

Arbor Bancorp Inc Bank of Ann Arbor

Other Affiliates

Pe1ich + Partners

S ign

Ernest G Perich Ann Arbor Michigan

Advertising Agency Owner Title No Of Percent

Position Shares Owned

Director 1 0200 1 1 5 Director

Owner 1 00

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

360 Advisors

SI Company NuStep Inc Morgan amp State RidgeRun III LLC State ampVei1ture LLC

Pcindview Properties LLC

NuStep IC-Disc Inc

David R S arns Ann Arbor Michigan

Private Investor Title No Of Percent

Position Shares Owned

Director 27488 3 1 0

Director

Managing 1 00

Member Manager 49

Shareholder 20 Shareholder 5000 1 1

Member 100 Member 20 owned by

0 parents

Shareholder 20

pate

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

Sesi Lincoln Mazda Volvo LMV Properties Madison Plaza LLC Sesi Real Estate Investment Sesi Agency Incorporated

Joseph A Sesi Ann Arbor Michigan

Car Dealership Owner Title No Of Percent

Position Shares Owned

Director 7500 084

Director

Owner 1 00 Owner 1 00 Owner 33

1 00 1 00

Date 3 - 9 ltJO$-

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Cynthia H Vilbanks

Ypsilanti Michigan

University Administrator Title No Of Percent

Position Shares Owned

Director 2500 028

Director

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

P1incipal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

Tangent Medical Technologies

NeuMoDx Molecular Inc

Jeffrey S Williams Ann Arbor Michigan

Managing Director Cavanaugh Lake LLC

Title No Of Percent Position Shares Owned

Director 1 000 0 1 1

Director

Chairman amp CEO

Chairman amp CEO

Date l (i K 7A tS-

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Charles E Crone Ann Arbor lvlichigan

Loan Officer Title No Of

Position Shares

VP 1 674

EVP amp Chief Revenue Officer

Signature -7-------==-Igt==-_--middotmiddot_middot _

Percent Owned

0 19

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancom Inc Bank of Ann Arbor

Other Affiliates None

Mark J Slade Ann Arbor lvlichigan

Bmlk CFO Title No Of Percent

Position Shares Owned

VP amp CFO 3684 0 42 1st yp amp

CFO

Signature ---------0---_____ _ Date __ 2-__--j__slt-----

1middot middot

flT

FORlI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor Other Affiliates

None

Cynthia J Livesay Ann Arbor Michigan

Credit Officer Title No Of Percent

Position Shares Owned

VP 2977 034 1st yp

Signature __C--A----4---=------middot __

LO= Date _ _Lmiddot_------middot-S __ _

FORl1 Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc Bank of Ann Arbor

Other Affiliates None

Lyle F Dahlberg Ann Arbor Michigan

Trust Officer Title No Of Percent

Position Shares Owned

VP 1583 0 18 1st yp

Signature __W-----------=--v_L_( ____ __ _ Date __ li__6_z_u_ S-___ _

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Patti R Judson Ann Arbor Micbigan

Bank Officer Title No Of Percent

Position Shares Owned

VP 2225 025

EVP amp COO

c _ 1ih__ Signature -------+--------shy

__

J 1 J 1 6 Date ________ _

• FR Y-6 Cover Page
• Report Item 1 Annual Report to Shareholders
• Report Item 2a Organization Chart
• Report Item 2b Domestic Branch Listing
• Report Item 3 Securities Holders
• Report Item 4 Insiders

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

P1incipal Occupation

Arbor Bancorp Inc Bank of Ann Arbor

Other Affiliates

Pe1ich + Partners

S ign

Ernest G Perich Ann Arbor Michigan

Advertising Agency Owner Title No Of Percent

Position Shares Owned

Director 1 0200 1 1 5 Director

Owner 1 00

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

360 Advisors

SI Company NuStep Inc Morgan amp State RidgeRun III LLC State ampVei1ture LLC

Pcindview Properties LLC

NuStep IC-Disc Inc

David R S arns Ann Arbor Michigan

Private Investor Title No Of Percent

Position Shares Owned

Director 27488 3 1 0

Director

Managing 1 00

Member Manager 49

Shareholder 20 Shareholder 5000 1 1

Member 100 Member 20 owned by

0 parents

Shareholder 20

pate

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

Sesi Lincoln Mazda Volvo LMV Properties Madison Plaza LLC Sesi Real Estate Investment Sesi Agency Incorporated

Joseph A Sesi Ann Arbor Michigan

Car Dealership Owner Title No Of Percent

Position Shares Owned

Director 7500 084

Director

Owner 1 00 Owner 1 00 Owner 33

1 00 1 00

Date 3 - 9 ltJO$-

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Cynthia H Vilbanks

Ypsilanti Michigan

University Administrator Title No Of Percent

Position Shares Owned

Director 2500 028

Director

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

P1incipal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

Tangent Medical Technologies

NeuMoDx Molecular Inc

Jeffrey S Williams Ann Arbor Michigan

Managing Director Cavanaugh Lake LLC

Title No Of Percent Position Shares Owned

Director 1 000 0 1 1

Director

Chairman amp CEO

Chairman amp CEO

Date l (i K 7A tS-

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Charles E Crone Ann Arbor lvlichigan

Loan Officer Title No Of

Position Shares

VP 1 674

EVP amp Chief Revenue Officer

Signature -7-------==-Igt==-_--middotmiddot_middot _

Percent Owned

0 19

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancom Inc Bank of Ann Arbor

Other Affiliates None

Mark J Slade Ann Arbor lvlichigan

Bmlk CFO Title No Of Percent

Position Shares Owned

VP amp CFO 3684 0 42 1st yp amp

CFO

Signature ---------0---_____ _ Date __ 2-__--j__slt-----

1middot middot

flT

FORlI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor Other Affiliates

None

Cynthia J Livesay Ann Arbor Michigan

Credit Officer Title No Of Percent

Position Shares Owned

VP 2977 034 1st yp

Signature __C--A----4---=------middot __

LO= Date _ _Lmiddot_------middot-S __ _

FORl1 Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc Bank of Ann Arbor

Other Affiliates None

Lyle F Dahlberg Ann Arbor Michigan

Trust Officer Title No Of Percent

Position Shares Owned

VP 1583 0 18 1st yp

Signature __W-----------=--v_L_( ____ __ _ Date __ li__6_z_u_ S-___ _

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Patti R Judson Ann Arbor Micbigan

Bank Officer Title No Of Percent

Position Shares Owned

VP 2225 025

EVP amp COO

c _ 1ih__ Signature -------+--------shy

__

J 1 J 1 6 Date ________ _

• FR Y-6 Cover Page
• Report Item 1 Annual Report to Shareholders
• Report Item 2a Organization Chart
• Report Item 2b Domestic Branch Listing
• Report Item 3 Securities Holders
• Report Item 4 Insiders

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

360 Advisors

SI Company NuStep Inc Morgan amp State RidgeRun III LLC State ampVei1ture LLC

Pcindview Properties LLC

NuStep IC-Disc Inc

David R S arns Ann Arbor Michigan

Private Investor Title No Of Percent

Position Shares Owned

Director 27488 3 1 0

Director

Managing 1 00

Member Manager 49

Shareholder 20 Shareholder 5000 1 1

Member 100 Member 20 owned by

0 parents

Shareholder 20

pate

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

Sesi Lincoln Mazda Volvo LMV Properties Madison Plaza LLC Sesi Real Estate Investment Sesi Agency Incorporated

Joseph A Sesi Ann Arbor Michigan

Car Dealership Owner Title No Of Percent

Position Shares Owned

Director 7500 084

Director

Owner 1 00 Owner 1 00 Owner 33

1 00 1 00

Date 3 - 9 ltJO$-

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Cynthia H Vilbanks

Ypsilanti Michigan

University Administrator Title No Of Percent

Position Shares Owned

Director 2500 028

Director

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

P1incipal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

Tangent Medical Technologies

NeuMoDx Molecular Inc

Jeffrey S Williams Ann Arbor Michigan

Managing Director Cavanaugh Lake LLC

Title No Of Percent Position Shares Owned

Director 1 000 0 1 1

Director

Chairman amp CEO

Chairman amp CEO

Date l (i K 7A tS-

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Charles E Crone Ann Arbor lvlichigan

Loan Officer Title No Of

Position Shares

VP 1 674

EVP amp Chief Revenue Officer

Signature -7-------==-Igt==-_--middotmiddot_middot _

Percent Owned

0 19

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancom Inc Bank of Ann Arbor

Other Affiliates None

Mark J Slade Ann Arbor lvlichigan

Bmlk CFO Title No Of Percent

Position Shares Owned

VP amp CFO 3684 0 42 1st yp amp

CFO

Signature ---------0---_____ _ Date __ 2-__--j__slt-----

1middot middot

flT

FORlI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor Other Affiliates

None

Cynthia J Livesay Ann Arbor Michigan

Credit Officer Title No Of Percent

Position Shares Owned

VP 2977 034 1st yp

Signature __C--A----4---=------middot __

LO= Date _ _Lmiddot_------middot-S __ _

FORl1 Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc Bank of Ann Arbor

Other Affiliates None

Lyle F Dahlberg Ann Arbor Michigan

Trust Officer Title No Of Percent

Position Shares Owned

VP 1583 0 18 1st yp

Signature __W-----------=--v_L_( ____ __ _ Date __ li__6_z_u_ S-___ _

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Patti R Judson Ann Arbor Micbigan

Bank Officer Title No Of Percent

Position Shares Owned

VP 2225 025

EVP amp COO

c _ 1ih__ Signature -------+--------shy

__

J 1 J 1 6 Date ________ _

• FR Y-6 Cover Page
• Report Item 1 Annual Report to Shareholders
• Report Item 2a Organization Chart
• Report Item 2b Domestic Branch Listing
• Report Item 3 Securities Holders
• Report Item 4 Insiders

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

Sesi Lincoln Mazda Volvo LMV Properties Madison Plaza LLC Sesi Real Estate Investment Sesi Agency Incorporated

Joseph A Sesi Ann Arbor Michigan

Car Dealership Owner Title No Of Percent

Position Shares Owned

Director 7500 084

Director

Owner 1 00 Owner 1 00 Owner 33

1 00 1 00

Date 3 - 9 ltJO$-

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Cynthia H Vilbanks

Ypsilanti Michigan

University Administrator Title No Of Percent

Position Shares Owned

Director 2500 028

Director

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

P1incipal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

Tangent Medical Technologies

NeuMoDx Molecular Inc

Jeffrey S Williams Ann Arbor Michigan

Managing Director Cavanaugh Lake LLC

Title No Of Percent Position Shares Owned

Director 1 000 0 1 1

Director

Chairman amp CEO

Chairman amp CEO

Date l (i K 7A tS-

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Charles E Crone Ann Arbor lvlichigan

Loan Officer Title No Of

Position Shares

VP 1 674

EVP amp Chief Revenue Officer

Signature -7-------==-Igt==-_--middotmiddot_middot _

Percent Owned

0 19

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancom Inc Bank of Ann Arbor

Other Affiliates None

Mark J Slade Ann Arbor lvlichigan

Bmlk CFO Title No Of Percent

Position Shares Owned

VP amp CFO 3684 0 42 1st yp amp

CFO

Signature ---------0---_____ _ Date __ 2-__--j__slt-----

1middot middot

flT

FORlI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor Other Affiliates

None

Cynthia J Livesay Ann Arbor Michigan

Credit Officer Title No Of Percent

Position Shares Owned

VP 2977 034 1st yp

Signature __C--A----4---=------middot __

LO= Date _ _Lmiddot_------middot-S __ _

FORl1 Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc Bank of Ann Arbor

Other Affiliates None

Lyle F Dahlberg Ann Arbor Michigan

Trust Officer Title No Of Percent

Position Shares Owned

VP 1583 0 18 1st yp

Signature __W-----------=--v_L_( ____ __ _ Date __ li__6_z_u_ S-___ _

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Patti R Judson Ann Arbor Micbigan

Bank Officer Title No Of Percent

Position Shares Owned

VP 2225 025

EVP amp COO

c _ 1ih__ Signature -------+--------shy

__

J 1 J 1 6 Date ________ _

• FR Y-6 Cover Page
• Report Item 1 Annual Report to Shareholders
• Report Item 2a Organization Chart
• Report Item 2b Domestic Branch Listing
• Report Item 3 Securities Holders
• Report Item 4 Insiders

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Cynthia H Vilbanks

Ypsilanti Michigan

University Administrator Title No Of Percent

Position Shares Owned

Director 2500 028

Director

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

P1incipal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

Tangent Medical Technologies

NeuMoDx Molecular Inc

Jeffrey S Williams Ann Arbor Michigan

Managing Director Cavanaugh Lake LLC

Title No Of Percent Position Shares Owned

Director 1 000 0 1 1

Director

Chairman amp CEO

Chairman amp CEO

Date l (i K 7A tS-

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Charles E Crone Ann Arbor lvlichigan

Loan Officer Title No Of

Position Shares

VP 1 674

EVP amp Chief Revenue Officer

Signature -7-------==-Igt==-_--middotmiddot_middot _

Percent Owned

0 19

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancom Inc Bank of Ann Arbor

Other Affiliates None

Mark J Slade Ann Arbor lvlichigan

Bmlk CFO Title No Of Percent

Position Shares Owned

VP amp CFO 3684 0 42 1st yp amp

CFO

Signature ---------0---_____ _ Date __ 2-__--j__slt-----

1middot middot

flT

FORlI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor Other Affiliates

None

Cynthia J Livesay Ann Arbor Michigan

Credit Officer Title No Of Percent

Position Shares Owned

VP 2977 034 1st yp

Signature __C--A----4---=------middot __

LO= Date _ _Lmiddot_------middot-S __ _

FORl1 Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc Bank of Ann Arbor

Other Affiliates None

Lyle F Dahlberg Ann Arbor Michigan

Trust Officer Title No Of Percent

Position Shares Owned

VP 1583 0 18 1st yp

Signature __W-----------=--v_L_( ____ __ _ Date __ li__6_z_u_ S-___ _

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Patti R Judson Ann Arbor Micbigan

Bank Officer Title No Of Percent

Position Shares Owned

VP 2225 025

EVP amp COO

c _ 1ih__ Signature -------+--------shy

__

J 1 J 1 6 Date ________ _

• FR Y-6 Cover Page
• Report Item 1 Annual Report to Shareholders
• Report Item 2a Organization Chart
• Report Item 2b Domestic Branch Listing
• Report Item 3 Securities Holders
• Report Item 4 Insiders

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

P1incipal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates

Tangent Medical Technologies

NeuMoDx Molecular Inc

Jeffrey S Williams Ann Arbor Michigan

Managing Director Cavanaugh Lake LLC

Title No Of Percent Position Shares Owned

Director 1 000 0 1 1

Director

Chairman amp CEO

Chairman amp CEO

Date l (i K 7A tS-

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Charles E Crone Ann Arbor lvlichigan

Loan Officer Title No Of

Position Shares

VP 1 674

EVP amp Chief Revenue Officer

Signature -7-------==-Igt==-_--middotmiddot_middot _

Percent Owned

0 19

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancom Inc Bank of Ann Arbor

Other Affiliates None

Mark J Slade Ann Arbor lvlichigan

Bmlk CFO Title No Of Percent

Position Shares Owned

VP amp CFO 3684 0 42 1st yp amp

CFO

Signature ---------0---_____ _ Date __ 2-__--j__slt-----

1middot middot

flT

FORlI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor Other Affiliates

None

Cynthia J Livesay Ann Arbor Michigan

Credit Officer Title No Of Percent

Position Shares Owned

VP 2977 034 1st yp

Signature __C--A----4---=------middot __

LO= Date _ _Lmiddot_------middot-S __ _

FORl1 Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc Bank of Ann Arbor

Other Affiliates None

Lyle F Dahlberg Ann Arbor Michigan

Trust Officer Title No Of Percent

Position Shares Owned

VP 1583 0 18 1st yp

Signature __W-----------=--v_L_( ____ __ _ Date __ li__6_z_u_ S-___ _

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Patti R Judson Ann Arbor Micbigan

Bank Officer Title No Of Percent

Position Shares Owned

VP 2225 025

EVP amp COO

c _ 1ih__ Signature -------+--------shy

__

J 1 J 1 6 Date ________ _

• FR Y-6 Cover Page
• Report Item 1 Annual Report to Shareholders
• Report Item 2a Organization Chart
• Report Item 2b Domestic Branch Listing
• Report Item 3 Securities Holders
• Report Item 4 Insiders

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Charles E Crone Ann Arbor lvlichigan

Loan Officer Title No Of

Position Shares

VP 1 674

EVP amp Chief Revenue Officer

Signature -7-------==-Igt==-_--middotmiddot_middot _

Percent Owned

0 19

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancom Inc Bank of Ann Arbor

Other Affiliates None

Mark J Slade Ann Arbor lvlichigan

Bmlk CFO Title No Of Percent

Position Shares Owned

VP amp CFO 3684 0 42 1st yp amp

CFO

Signature ---------0---_____ _ Date __ 2-__--j__slt-----

1middot middot

flT

FORlI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor Other Affiliates

None

Cynthia J Livesay Ann Arbor Michigan

Credit Officer Title No Of Percent

Position Shares Owned

VP 2977 034 1st yp

Signature __C--A----4---=------middot __

LO= Date _ _Lmiddot_------middot-S __ _

FORl1 Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc Bank of Ann Arbor

Other Affiliates None

Lyle F Dahlberg Ann Arbor Michigan

Trust Officer Title No Of Percent

Position Shares Owned

VP 1583 0 18 1st yp

Signature __W-----------=--v_L_( ____ __ _ Date __ li__6_z_u_ S-___ _

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Patti R Judson Ann Arbor Micbigan

Bank Officer Title No Of Percent

Position Shares Owned

VP 2225 025

EVP amp COO

c _ 1ih__ Signature -------+--------shy

__

J 1 J 1 6 Date ________ _

• FR Y-6 Cover Page
• Report Item 1 Annual Report to Shareholders
• Report Item 2a Organization Chart
• Report Item 2b Domestic Branch Listing
• Report Item 3 Securities Holders
• Report Item 4 Insiders

FORlVI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancom Inc Bank of Ann Arbor

Other Affiliates None

Mark J Slade Ann Arbor lvlichigan

Bmlk CFO Title No Of Percent

Position Shares Owned

VP amp CFO 3684 0 42 1st yp amp

CFO

Signature ---------0---_____ _ Date __ 2-__--j__slt-----

1middot middot

flT

FORlI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor Other Affiliates

None

Cynthia J Livesay Ann Arbor Michigan

Credit Officer Title No Of Percent

Position Shares Owned

VP 2977 034 1st yp

Signature __C--A----4---=------middot __

LO= Date _ _Lmiddot_------middot-S __ _

FORl1 Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc Bank of Ann Arbor

Other Affiliates None

Lyle F Dahlberg Ann Arbor Michigan

Trust Officer Title No Of Percent

Position Shares Owned

VP 1583 0 18 1st yp

Signature __W-----------=--v_L_( ____ __ _ Date __ li__6_z_u_ S-___ _

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Patti R Judson Ann Arbor Micbigan

Bank Officer Title No Of Percent

Position Shares Owned

VP 2225 025

EVP amp COO

c _ 1ih__ Signature -------+--------shy

__

J 1 J 1 6 Date ________ _

• FR Y-6 Cover Page
• Report Item 1 Annual Report to Shareholders
• Report Item 2a Organization Chart
• Report Item 2b Domestic Branch Listing
• Report Item 3 Securities Holders
• Report Item 4 Insiders

1middot middot

flT

FORlI Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor Other Affiliates

None

Cynthia J Livesay Ann Arbor Michigan

Credit Officer Title No Of Percent

Position Shares Owned

VP 2977 034 1st yp

Signature __C--A----4---=------middot __

LO= Date _ _Lmiddot_------middot-S __ _

FORl1 Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc Bank of Ann Arbor

Other Affiliates None

Lyle F Dahlberg Ann Arbor Michigan

Trust Officer Title No Of Percent

Position Shares Owned

VP 1583 0 18 1st yp

Signature __W-----------=--v_L_( ____ __ _ Date __ li__6_z_u_ S-___ _

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Patti R Judson Ann Arbor Micbigan

Bank Officer Title No Of Percent

Position Shares Owned

VP 2225 025

EVP amp COO

c _ 1ih__ Signature -------+--------shy

__

J 1 J 1 6 Date ________ _

• FR Y-6 Cover Page
• Report Item 1 Annual Report to Shareholders
• Report Item 2a Organization Chart
• Report Item 2b Domestic Branch Listing
• Report Item 3 Securities Holders
• Report Item 4 Insiders

FORl1 Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc Bank of Ann Arbor

Other Affiliates None

Lyle F Dahlberg Ann Arbor Michigan

Trust Officer Title No Of Percent

Position Shares Owned

VP 1583 0 18 1st yp

Signature __W-----------=--v_L_( ____ __ _ Date __ li__6_z_u_ S-___ _

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Patti R Judson Ann Arbor Micbigan

Bank Officer Title No Of Percent

Position Shares Owned

VP 2225 025

EVP amp COO

c _ 1ih__ Signature -------+--------shy

__

J 1 J 1 6 Date ________ _

• FR Y-6 Cover Page
• Report Item 1 Annual Report to Shareholders
• Report Item 2a Organization Chart
• Report Item 2b Domestic Branch Listing
• Report Item 3 Securities Holders
• Report Item 4 Insiders

FORM Y6 (as of Dec 2014) Item 4) Directors and Officers

Name

Address

Principal Occupation

Arbor Bancorp Inc

Bank of Ann Arbor

Other Affiliates None

Patti R Judson Ann Arbor Micbigan

Bank Officer Title No Of Percent

Position Shares Owned

VP 2225 025

EVP amp COO

c _ 1ih__ Signature -------+--------shy

__

J 1 J 1 6 Date ________ _

• FR Y-6 Cover Page
• Report Item 1 Annual Report to Shareholders
• Report Item 2a Organization Chart
• Report Item 2b Domestic Branch Listing
• Report Item 3 Securities Holders
• Report Item 4 Insiders