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G A I N E S B O R O | 931 .268 .2 16 1

F I R S T F R E E D O M B A N K .C O M

AUGUST 10, 2017 SHAREHOLDER NEWSLETTER

Sincerely,

John R. Lancaster Chairman & CEO

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Dear Shareholder,

The second quarter and the first half of

2017 produced record earnings for

First Freedom Bank! Net income for

second quarter was $1,044,430 versus

$879,546 for the first quarter – an

increase of 18.7%. YTD 2017 net

income is $1,924,035 versus $1,114,295 for YTD 2016 – an

increase of 72.6%.

The second quarter versus first quarter increase in earnings is

due primarily to a $12.9 million increase in our loan portfolio.

This equates to an increase of 3.88% (more than 15%

annualized). Our quarterly non-interest income increased to

$545,609, an increase of 13% during the quarter (52%

annualized). This increase was due to more business in our

mortgage department and higher revenue in deposit service

charges.

The YTD increase in earnings over 2016 are significant, but

expected, as we had significant one-time expenses in the

first half of 2016 from the acquisition of the three Upper

Cumberland offices. We have been very pleased with the

performance of these offices as they are ahead of expectations

in virtually every category.

At June 30th, our Tier One Capital Ratio stands at 9.83%, our

Return on Shareholder Equity is 10.34%, our Classified Assets

are less than 1%, our Texas Ratio is less than 7% and our

Return on Assets is 0.91%. These numbers represent

continued improvement and efficiency in each category.

We are projecting more loan growth for the balance of 2017.

This loan growth naturally requires us to set aside reserves for

potential loan losses, however, we anticipate our earnings will

be very close to record levels when compared to prior years.

Our shareholder meeting on May 18th was a success with

three existing Directors being re-elected to board seats: Dr.

Hardie Sorrels, Mr. Ricky Haskins, Mr. John Bradshaw and

myself. Our dividend was paid on May 19th with more than

81% of shareholders participating in the Dividend

Reinvestment Plan.

I’m frequently asked how to buy stock in our bank. Please

remember that our stock is privately traded and our

shareholders are free to buy or sell with other parties as they

desire (some restrictions apply) and at a price they determine.

We maintain a list of interested Buyers and are happy to help

match Buyers and Sellers to the best of our abilities. If you

would like to buy or sell, please contact me or our Shareholder

Services representative, Christy Trammel. We currently do

not have any plans for a future stock offering.

Please continue to keep FFB in mind as you need financial

services and please refer us to a friend. I promise you’ll be

proud of how they’re treated in our bank.

The most recent trade of First Freedom stock was at $17.25 per share.

First Freedom donated flowers to be presented to graduates of the Putnam County Adult High School on Friday, Jun 2nd, 2017.

First Freedom’s Cookeville office and Algood office are located in Putnam County.

Pictured left to right are JOSH HALL, Algood Personal Banker, Valedictorian LISA VIOLETTE, and BRYAN SWEET, Cookeville FSR Manager.

FFB Donates to Putnam County Adult High School Graduation CHRISTEN RABE, Mortgage

Origination Officer, and MALIEA OAKLEY, Senior Vice President and Director of Human Resources, attended the Wilson County Main Street Awards Breakfast on Wednesday, May 31, 2017. First Freedom Bank was a finalist in the Best Bank/Mortgage Company category.

First Freedom Bank was a 2016 Best Bank/Mortgage Company Finalist, as well.

FFB 2017 Main Street Award Finalist

VERONICA BENDER, First Freedom Bank Director and Principal of Friendship Christian, received a special honor on July 19th when it was revealed that the W.A. Wright Elementary School gym had been dedicated to her.

W.A. Wright Elementary School opened in 1991 and Bender was their first principal.

Pictured is VERONICA BENDER, center, with her husband LARRY BENDER, her daughter JOY MCMURRY, and her grandson ELIJAH JOY.

FFB Director Bender Honored with Elementary Gym Dedication

At the annual Spring Employee party three employees were recognized for having completed five years of employment with the bank: SHELIA FERRELL, DEBBIE MARSH, and HEATHER SPURLOCK. Each of these employees received a special First Freedom Jacket in appreciation of their years of service.

SHELIA FERRELL is First Vice President and Managerial Lender and has been with the bank since 2012. She previously served as a Commercial Lender at Capital

Bank and as an Executive Vice President and Chief Operating Officer at Cumberland Bank. Ferrell has worked in virtually all areas of banking over the length of her career, including compliance, technology, internal audit, operations, lending and management.

DEBBIE MARSH is the Mortgage Admin i s t r a t ion Officer at Main Office. When Marsh joined First Freedom, she brought with her more than 20 years of experience in the mortgage industry. Previously, she had been employed with Guaranty Trust and Vision Mortgage.

H E A T H E R SPURLOCK is an Admin i s t r a t i ve Assistant in the loan department at Main Office. Before joining First Freedom in March of 2012,

Spurlock was employed with Farm Credit Services for 6 years. In addition to her years of experience, Spurlock has also completed various lending courses and certificates.

FFB Employees Recognized for Five Years of Service

Stay connected online!

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FFB Annual Shareholder’s MeetingFirst Freedom’s Annual Shareholder’s Meeting was held on May 18th at the Five Oaks Country Club. Shareholders, board members, and bank officers that attended this meeting listened to a presentation on growth, profitability, and dividends, as well as re-elected three existing directors.

Pictured LEFT from left to right are JOHN LANCASTER, Chairman and CEO, and JOHN ROSE, shareholder, and VIC SHAH, shareholder. Pictured RIGHT from left to right is MIKE SMITH, shareholder, and DON TURNER, First Freedom Bank Director.

KELLY FERRELL is a Senior Personal Banker and Team Leader at Main Office. Ferrell has been with the bank since its inception in 2006. Ferrell earned an AAS Degree from Volunteer State and received the 2011 Red Carpet Award and the 2014-2015 Financial Planning Award. A native of Lebanon, Ferrell currently resides in Castalian Springs with her husband, Ray.

WHY DO YOU THINK FIRST FREEDOM HAS EXPERIENCED SO MUCH SUCCESS SINCE THEIR FOUNDING IN 2006?

“People bank with people, not a bank. The difference is the employees. As a Personal Banker, since day one, I’ve always wanted every customer to feel welcomed and comfortable that we can handle their financial needs.”

WHAT IS ONE WAY IN WHICH YOU FEEL FIRST FREEDOM IS DIFFERENT FROM MOST OF ITS COMPETITORS?

“At First Freedom we’ve always used the catchphrase “Experience the Difference.” Our employees are that difference. We all care and want each customer to have a peace of mind that we have the training, education, and ability to help them with their financial needs. ”

YOU WORKED AT TWO OTHER BANKS BEFORE HELPING TO START FIRST FREEDOM – ONE LARGE NATIONAL BANK AND ONE LOCAL COMMUNITY BANK. WHAT IS DIFFERENT ABOUT WORKING AT FFB?

“Community banking is night and day from the big corporate banks. At First Freedom Bank you are not only our customer, but our friend. We may worship together and we may live in the same neighborhood. We not only know your name, we know you – and probably half your family!”

WHAT IS SOMETHING INVALUABLE YOU HAVE LEARNED FROM WORKING AT FIRST FREEDOM BANK?

“Always expect the unexpected.”

DO YOU HAVE ANY HOBBIES?

“I enjoy gardening and raising chickens.”

WHAT IS ONE FACT ABOUT YOU THAT YOU THINK WOULD SURPRISE PEOPLE?

“I love to snorkel.”

WHAT’S YOUR FAVORITE THING TO DO ON THE WEEKEND?

“I like to relax and chill with my family.”

WHAT IS ONE THING YOU HAVE YET TO CROSS OF YOUR BUCKET LIST?

“I really want to travel to Hawaii.”

FFB Employee Spotlight: Kelly Ferrell

“I’ve always wanted every customer to feel welcomed and comfortable

that we can handle their financial needs.” — KELLY FERRELL

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CHRISTY TRAMMEL, Main Office Personal Banker, has been promoted to Shareholder Services R e p r e s e n t a t i v e . Trammel will continue in her role as Personal

Banker, as well. Trammel has been with First Freedom Bank since its inception more than 11 years ago.

KIM HULSE has joined First Freedom Bank as a Deposit Operations Clerk. Hulse was previously employed with Novus, LLC as an Operations Manager for 14 years.

TORI FLATT has joined First Freedom Bank as a Financial Services Representative at Main Office. Flatt was previously employed with

Gondola Restaurant for three years.

JENNY ETHERIDGE has joined First Freedom Bank as a Financial Services Representative at Main Office. Etheridge was previously employed with University Medical Center for more than 11 years.

FFB Employee Hires and Promotions

First Freedom Bank hosted its annual Spring Employee Party on May 20th at Lebanon’s Don Fox Park. This was the first Spring party since the purchase of the Upper Cumberland offices and employees from all six offices were in attendance, as seen in the picture above.

FFB Hosts Annual Spring Employee Party

FIRST FREEDOM BANK1620 West Main StreetLebanon, Tennessee 37087