A Message from Our Chairman of the Board & CEO

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W. Michael Shipman Chairman & Chief Executive Officer

The year 2020 will no doubt be one for the history books, not only for our country but literally for the world. Yet, in spite of the hardships we faced, I am proud to report that the financial condition of North Dallas Bank & Trust Co. is strong. We closed the year with assets in excess of $1.477 billion and a loan portfolio that exceeded $689 million. Marking our 59th year of uninterrupted earnings, the bank posted net income of $8.578 million and paid dividends of $1.30 per share for a total of $3.339 million.

Throughout the year, regardless of the difficulties, our employees continued to work tirelessly, providing excellent service to our customers and communities. We all learned how to “work from home” and how to manage our time and energy in an efficient and effective “new” way. Our staff worked through the night many times to provide PPP loans to our commercial customers, allowing them to fund salaries to their employees. The culture of NDBT is to “treat others as we would want to be treated” and 2020 was a unique year that allowed us to prove that these are not just words on a page, but rather our way of life.

We are mindful that the support of our shareholders, the trust of our customers and the loyal service of our employees are vital for our continued success.

We value your business, investment and friendship. On behalf of the Board of Directors, Officers and Employees, we extend our best wishes for a prosperous 2021.

Sincerely,

W. Michael Shipman

Chairman of the Board & CEO

A Message from Our Chairman of the Board & CEO

Financial Highlights for 2020

· Earnings exceeded $8.5 million

· Paid cash dividends for the 34th consecutive year

· Shareholders’ Equity surpassed $169 million

· Reserve for Loan Losses of $13 million

· Total Loans Outstanding exceeded $689 million

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2 Financial Highlights

2020 2019 2020 2019

Three Months Ended Twelve Months Ended

December 31 December 31 9,088,517 (648,496) 1,409,605 (6,941,221) 2,908,405 (588,672) 2,319,733 0 2,319,733 0.90 Income Statement

Net Interest Income Provision for Loan Losses Noninterest Income Noninterest Expenses

Income Before Taxes & Extraordinary Income Tax

Income Before Extraordinary Extraordinary

Net Income Earnings per Share

8,355,597 0 1,064,065 (6,567,758) 2,851,904 (553,466) 2,298,438 0 2,298,438 0.89 33,943,040 (1,698,496) 5,276,934 (27,636,877) 9,884,601 (2,154,082) 7,730,519 847,102 8,577,621 3.34 33,620,681 (75,000) 4,042,294 (26,108,109) 11,479,866 (2,302,240) 9,177,626 0 9,177,626 3.57 $ $ $ $ $ $ $ $ $ $ $ $

(Prepared internally without review by our independent accountants)

2020 2019 2020 2019

Twelve Month Average As of December 31 Ended December 31

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2020 2019

Statement of Condition

As of December 31, 2020 and 2019

15,744,750 140,700,075 233,367,735 261,403,880 153,075 78,238,100 559,048,905 9,325,494 (12,407,809) 634,204,690 3,398,271 11,931,835 0 6,858,020 1,307,762,331 512,841,953 628,672,304 1,141,514,257 437,129 0 4,425,479 1,146,376,865 12,845,130 28,815,012 1,528,577 118,196,747 161,385,466 1,307,762,331 $ $ $ $ $ $ 15,031,166 278,841,149 246,577,812 238,797,640 0 108,332,547 573,096,750 8,212,854 (13,908,389) 675,733,762 3,865,103 12,296,252 0 6,717,496 1,477,860,380 606,244,018 696,579,746 1,302,823,764 304,243 0 5,006,844 1,308,134,851 12,845,130 28,815,012 4,630,753 123,434,634 169,725,529 1,477,860,380 Assets

Cash and Due From Banks

Interest-Bearing Deposits at Other Banks Securities Held to Maturity

Securities Available for Sale Fed Funds Sold

Loans

Commercial Real Estate Consumer

Reserve for Loan Losses Net Loans

Interest Earned, Not Collected Bank Premises and Equipment Other Real Estate (net) Other Assets (net) Total Assets

Liabilities and Stockholders’ Equity

Deposits

Demand Deposits

Savings and Other Time Deposits

Total Deposits

Accrued Interest Payable Federal Income Tax Payable Other Liabilities

Total Liabilities Stockholders’ Equity

Capital Stock: Common, $5.00 Par Value, 2,569,082 Shares authorized and 2,569,026 outstanding

Capital Surplus

Accumulated Other Comprehensive Income Undivided Earnings

Total Stockholders’ Equity

Total Liabilities and Stockholders’ Equity

INTEGRITY

SERVICE

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2020 2019

Statement of Earnings

For the Twelve Months Ended December 31, 2020 and 2019

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27,546,704 9,917,904 85,310 2,936,840 40,486,758 6,860,520 5,557 6,866,077 33,620,681 (75,000) 33,545,681 840,134 (20,590) 167,930 0 3,054,820 4,042,294 17,939,488 227,207 1,029,902 6,911,512 26,108,109 11,479,866 2,302,240 9,177,626 0 9,177,626 3.57 28,643,007 9,114,182 296 850,722 38,608,207 4,659,399 5,768 4,665,167 33,943,040 (1,698,496) 32,244,544 696,179 (52,025) 625,204 0 4,007,576 5,276,934 19,261,220 418,305 717,634 7,239,718 27,636,877 9,884,601 2,154,082 7,730,519 847,102 8,577,621 3.34 $ $ $ $ $ $ Interest Income

Loans (including fees) Investment Securities Federal Funds Sold Deposit Interest

Interest Expense

Deposit, Time and Savings Other Borrowings

Net Interest Income Provision for Loan Losses

Net Interest Income After Provision for Loan Losses

Non-Interest Income

Service Charges

Net Gain/(Loss) on Sale of Assets Net Gain/(Loss) on Sale of Loans Gain/(Loss) on Sale of Securities Other Operating Income

Non-Interest Expenses

Employee Compensation and Benefits FDIC Insurance and Examination Fees Net Occupancy Expense

Other Operating Expenses

Income Before Income Tax & Extraordinary

Income Tax Expense

Net Income Before Extraordinary Extraordinary Expense

Net Income Earnings Per Share

INTEGRITY

SERVICE

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2020 2019 2020 2019

December 31 December 31

Reserve for Loan Losses

Changes in Stockholders’ Equity

$ 13,227,244 648,496 0 32,649 32,649 $ 13,908,389 Balance, beginning of period

Provision charged to income

Loans charged off, net of recoveries: Charge-offs

Recoveries

(Net charge-offs)/Recoveries

Balance, end of period

$ 12,390,848 0 28,601 45,562 16,961 $ 12,407,809 $ 12,407,809 1,698,496 336,553 138,637 (197,916) $ 13,908,389 $ 12,052,103 75,000 61,930 342,636 280,706 $ 12,407,809 $ 169,601,410 2,319,733 0 (782,650) (1,412,964) $ 169,725,529 Balance, beginning of period

Net Income before extraordinary Extraordinary Expense

Unrealized Gains/(Losses) Cash Dividends Declared

Balance, end of period

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2020 2019 2020 2019

Financial Ratios and Other Data

0.63% 5.42% 2.49% $ 0.90

Profitability Ratios

Return on Average Assets Return on Average Equity Capital Net Interest Spread

Net Income per Share

0.70% 5.65% 2.52% $ 0.89 0.61% 5.11% 2.46% $ 3.34 0.71% 5.83% 2.64% $ 3.57 2020 2019 As of December 31 0.00% 0.00% 0.00% 2.02% 52.93% 55.81% 32.54%

Asset Quality Ratios

Nonperforming Loans to Total Assets Nonperforming Loans to Total Loans Nonperforming Loans to Total Capital Reserve for Loan Losses to Total Loans Total Loans to Total Deposits

Average Loans to Average Deposits Liquidity 0.01% 0.02% 0.07% 1.92% 56.65% 56.21% 28.04% 2020 2019 As of December 31 11.48% 12.43% 26.63% 11.97% 12.89% 26.39% Capital Ratios

Equity Capital to Total Assets Total Capital to Total Assets Total Capital to Total Loans

Average Equity Capital to Average Assets Average Total Capital to Average Assets Average Total Capital to Average Loans

Key:

Equity Capital = Common Stock + Capital Surplus + Undivided Profits + Accumulated Other Comprehensive Income Total Capital = Equity Capital + Reserve for Loan Losses

Liquidity Ratio = (Securities Available for Sale + Fed Funds + Cash & Due From Accounts – Pledged Securities) / Total Assets Assets are net of Unearned Discount and Loan Loss Provision

Total Loans are net of Unearned Discount

12.34% 13.29% 26.88% 12.13% 13.08% 26.68%

Annualized where applicable

Notes to Financial Statements:

1. Net Loans include Nonperforming Loans on December 31, 2020 with a balance of $-0- and on December 31, 2019 of $123,779.

(Nonperforming Loans = Nonaccrual Loans + Loans 90 days and over past due.) 2. North Dallas Bank Tower Corporation, an affiliated company of North Dallas Bank & Trust Co., was liquidated in 2020.

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The COVID-19 pandemic brought unforeseen challenges and the need to provide support to our communities was greater than ever this year. NDB Cares was there to meet this adversity and employees rose to the occasion when they were needed most. Numerous live events were modified into virtual engagements as “social distancing” was swiftly adopted as part of the new normal.

Despite many logistical obstacles in 2020, North Dallas Bank & Trust Co. was honored to receive the 18th annual Cornerstone Award. This prestigious award was received from the Texas Bankers Foundation, the philanthropic division of the Texas Bankers Association, recognizing the outstanding efforts of NDB Cares.

Service Spotlight by Department:

• Addison – Metrocrest Services

• Dallas – Family Gateway

• Frisco – Frisco Family Services

• Las Colinas – Irving Cares

• Plano – Living for Zachary

• Trust | Wealth Management – Family Compass

• Corporate – Make-A-Wish® North Texas

Meeting our Mission of Community Service through NDB Cares

Fulfilling our Mission through care and community service in 2020:

• Partnered with Cristo Rey Dallas to provide real-time work experience for several high school students with limited financial resources

• Awarded endowment gifts to the Texas A&M Foundation supporting the Bert Fields Excellence in Banking Award • Awarded endowment gifts to Texas Tech Foundation supporting the Rawls College of Business Excellence in Banking scholarship program

• Donated funds to support the Jewish Community Center of Dallas

• Awarded two additional James W. Tyra Memorial college scholarships to top achieving high school students • Approved over 700 SBA Payroll Protection Program loans to support small business in our communities • Supported the Covenant School for their mission to provide funding for low-income students

• Key supporter of Semones Family YMCA, benefiting many program initiatives such as Safety Around Water, camps, after-school enrichment, membership assistance, and support for seniors and special needs children • Supported the Dallas Holocaust and Human Rights Museum as they honored Liberators and Survivors during the first-ever virtual Hope for Humanity Gala

• Supported the tireless efforts of Family Compass to prevent child abuse and neglect • Key supporter of the Assist the Officer Foundation benefiting North Texas police officers

• Supported the mission of Metrocrest Services to assist members of society who are coping with crisis situations • Distributed over 80 seasonal packets to deserving families under the Make-A-Wish® holiday gift pickup, as well as providing funding to the NDBT Joy Emporium which provides long-term toy supplies for children

• Best of Bauer 5-Star Excellence rating by BauerFinancial, Inc. for 31 consecutive years

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157 EMPLOYEES

FIVE FULL-SERVICE

BANKING CENTERS

8 Officers

Directors

MIKE SHIPMAN

Chairman & CEO

LARRY MILLER

President

GLENN HENRY

Chief Financial Officer

ALLEN HUDSON

Chief Lending Officer

PAM MURRAY

Chief Human Resources Officer

BRANDI SHIFLETT

Chief Operating Officer & Cashier

JAMES TIPTON

Chief Credit Officer

RON WILLIAMS

Chief Information Officer

JEFF CROW Market President JAY HENRY Market President RALPH THOMPSON Market President STEVE CARPENTER

Executive Vice President

BILLY MARTIN

Executive Vice President

TONI MCREYNOLDS

Executive Vice President Trust | Wealth Management

JUDY ALVARADO

Senior Vice President

JERRI ANDERSON

Senior Vice President Trust | Wealth Management

DONALD ASHLEY

Senior Vice President Mortgage

GINA BROWN

Senior Vice President Risk Manager

DANIEL CAHILL

Senior Vice President Marketing

POUROO DASTUR

Senior Vice President Retail Banking

KIRK DIXON

TIM GRIFFIN

REBECCA KEENER

GWEN PEARSON

GINGER PILGRIM

JULIE RUSS

LISA SHANKS

ALLIE WADLEY

MICHAEL WORLEY

STEPHANIE BURCHINAL

Vice President Auditor

KIM CHESHIER

Vice President

Trust | Wealth Management

ANDREW DAVENPORT

Vice President

JENNIFER DEVILLENEUVE

Vice President

SAM GUNN Vice President KELLY GREEN Vice President JANIS MOCZYGEMBA Vice President JOSE ORTIZ Vice President CORINA PADRON Vice President

ADRIANA PEÑA Vice President KATHY SELVIDGE Vice President BAHARAK SOTOUDEH Vice President RYAN SWOR Vice President

KENYA BUIE

Assistant Vice President

ROBINA CUADRADO

RICHARD FRAGA

JAMIE FLORES

JAMIE FULLERTON

MAI LY KWAN

ELENA MILLER

JUDY RAMBO

ROBYN REDDEN

JILL SHEPHERD

MEGLY WESTER

MERK BAILEY Banking Officer LIZZY BOZEMAN Banking Officer MEAGAN BRAID Banking Officer SARAH COURIER Banking Officer WES ERVIN Banking Officer MARIA GARCIA Banking Officer ZELMA HICKS Banking Officer HEATHER HONEYSUCKLE Banking Officer DANIJELA HRGOTA Banking Officer PHILIP JAMES Banking Officer CHRIS LIGHTFOOT Banking Officer AIMEE MONTOYA Banking Officer AVEENA PATEL Banking Officer LISA RUSHING Banking Officer ROBIN WINN Banking Officer AMELIA SABA

Compliance Audit Officer

MATT BROWNE Trust Officer BEN CLAY Trust Officer LARRY R. BYRD Investments MICHAEL P. HAGGERTY

CEO, Kamimac, LLC - A Family Office

MARY PAT HIGGINS

President & CEO, Dallas Holocaust and Human Rights Museum

TIM JORDAN

Senior Managing Director, Capital Market Office Head for JLL

THOMAS A. KOONS

Koons Trucking, LLC.

JOHN S. MAHAR, JR.

President, Storage Services Inc.

BRANNON D. MARLOWE, M.D.

Anesthesiologist, Excel Anesthesia

LARRY A. MILLER

President, North Dallas Bank & Trust Co.

LARRY M. NOBLES

Investments

W. MICHAEL SHIPMAN

Chairman & CEO

North Dallas Bank & Trust Co.

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