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The Best of Both Worlds

2019 Summary Annual Report

Small banks are flexible and provide great client service.

Big banks have leading-edge technology and corporate finance-minded bankers.

We think our clients deserve the best of both worlds.

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Douglas E. HuttChairman and CEO

A Message from Management Over the years “Dallas” has become synonymous with both business and success, due largely to our “can do” entrepreneurial spirit. For this reason, North Texas has become a hub for banks of every shape, size, and geography. Dallas Capital Bank offers a true advantage; we are from here. Dallas isn’t just where we operate — it’s who we are, it’s how we’re built, and it’s who we serve. With this local knowledge, we’re built to serve your business.

Dallas Capital Bank is just entering our adolescence (in “corporate years”), and we still have room to develop and evolve. We’re the best of both worlds: experienced enough to have confidence in our business, but not too rigid that we can’t alter course when necessary. A prudent need at this point in history.

We’d like to take a moment to acknowledge the current pandemic and the uncertainty that follows it. This moment in time is a reminder of the true benefits of relationship banking.

Our mission is to serve our clients through the good and the bad — and we’re committed to doing so through the uncertainty of the current economic climate. We’d like to assure you that we’re making the necessary adjustments to minimize the impact on our clients and to ensure the safety of our employees.

We are confident that Dallas Capital Bank is well-positioned for the future. We’ll continue to serve our clients and our stakeholders through whatever comes our way. Because that’s HOW DALLAS DOES BUSINESS.

“We invest in people, and technology,

NOT bricks and mortar – that is how

Dallas Capital does business! This is

HOW DALLAS DOES BUSINESS!”

- Douglas E. Hutt, Chairman and CEO

DALLAS CAPITAL BANK OPERATING INCOME

in thousands

(1) 2015 operating results included only eight months of activity (based on acquisition date) and have been

annualized for comparative purposes.

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Our Banking ModelCommercial and Entrepreneurial Banking

Dallas Capital Bank brings you the expertise and technology of a big bank, combined with the world-class service of a boutique relational bank that knows you and partners with you to help your business succeed. Unlike big banks that can be very product-driven, we are client-driven. We are exclusively focused on serving the needs of middle-market businesses with best-in-class credit, depository and treasury services.

As a premier commerical bank, you can expect:

• Investing in Relationship: We are in it for the long game.

• Real-Time Local Decisions: No delays and unnecessary red tape.

• Corporate Finance-Minded Bankers: Experienced, Dallas-based bankers.

• An Exceptional Client Experience: We are here to serve you. That’s it.

THAT’S HOW DALLAS CAPITAL DOES BUSINESS

big bankssmall banks DA L L A S CA P I TA L BA N K

REAL TIME DECISIONS

REAL-TIME DECISIONS

RELATIONSHIP-CENTRIC

CORPORATE FINANCE-MINDED BANKERS

LATEST TECHNOLOGY

We are Dallas Bankers Serving Dallas Entrepreneurs

You need a bank that understands the DFW real estate market and can come up with creative, flexible solutions to seize opportunies. Dallas Capital Bank is a key resource for real estate developers, investors and mortgage companies seeking trusted advisors with custom financial solutions. We want to see the entreprenuers of Dallas thrive so that our city will continue to thrive. After all, WE ARE FROM HERE!

Dallas Farmer’s Market: A Dallas icon and DCB client.

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Relationship-CentricServing you well means investing the time to get to know you and your business.

The result is a mutually beneficial relationship, where you gain a trusted financial partner in Dallas Capital Bank.

We are not merely seeking a loan or deposit transaction, rather we desire a genuine relationship by which we measure our performance based on our clients’ satisfaction and success.

DCB Relationships are:Intentional. We are selective about clients we take on to ensure a dedicated focus so that we can best use our expertise to propel your business.

Trustworthy. We are here for you. We respond quickly and appropriately to both opportunities and challenges.

Accessible. There is something reassuring about being able to sit face-to-face with decision makers and solution providers. At Dallas Capital Bank, we are happy to come visit your office and discuss the opportunities at-hand.

Beneficial. DCB was established in Dallas with a focus on helping our clients build their business and grow their network in the DFW area.

Real-Time Decisions In a world where most banks make decisions on their timeline, we are committed to making decisions on yours.

Unfortunately, too many banks create unnecessary lag time with excess red tape, layers of bureaucracy, and an unfamiliarity with the specific market your business is in. This can not only be frustrating, it can waste your time and hinder your growth. At Dallas Capital Bank, we designed our credit approval process to be both flexible and decisive –- so we can communicate all decisions in a timely manner.

• Decisions happen right here in Dallas. We’re locally owned and managed. We have deep market knowledge and can make informed decisions quickly.

• Everyone is at the table. There is no heavy hierarchy that hinders or constrains decision time.

• Our team works together to make the process simple, quick, and efficient. You can move forward without the lag time between departments.

• We resolve issues face-to-face. If there’s ever any questions or concerns, you can meet with decision-makers at DCB and work through a solution.

“We were ready for a long drawn out conversation and a little nervous because of the complexity of our situation. In a 30-minute conversation, DCB explained everything so simply and in 2 days we had a term sheet. They gave us options no other bank had offered and it was a seamless transition. We have really valued their process and love the people we work with over there.”

Adam McKelvey, Knight Services

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“Dallas Capital is more of a business partner from a financial aspect. They offer long-term business relationships that can grow with you both during times of prosperity and adversity. They understand business changes and understand banking solutions and are able to bring those two worlds together.”

Gene Gray, Innovative IDM

Corporate-Finance Minded Bankers Knowledgeable bankers who are here to serve you and equip you, not sell you.

At Dallas Capital Bank we are not interested in selling the product of the month. We are interested in helping you grow your business by bringing custom, simplified solutions using our local knowledge, business acumen, and financial capabilities. With Dallas Capital Bank, you get the sophistication of a banker who has worked in larger financial institutions, while at the same time, reaping the benefits inherent of a smaller more nimble financial institution. Solutions are presented in a friendly, down-to-earth way so you always feel equipped and confident. After all, we believe your banker should be one of your most trusted advisors, not just a provider of credit and banking services.

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“Usually in banking, our experience has been characterized by all the reasons why we can’t do something. Most bankers need you to fit in their cookie cutter. If you don’t, they can’t help. At DCB it is just the opposite. They will bake whatever cookie we need and adapt.”

Lee Dunlap, Quest Events

Exceptional Service When choosing a bank, it can feel like you’re always having to compromise when it comes to service and technology. With Dallas Capital Bank, you get the best of both worlds, so you don’t have to settle for mediocrity in either. A few ways we accomplish this are:

• Streamlining communication. No one has time for duplicative paperwork or unnecessary emails. Rather, we value your time and are efficient in our communication.

• Collaborating as a team. No need to worry if an issue arises. You have a lead banker, supported by a dedicated team, who ALL have extensive knowledge of you and your business.

• Investing in leading-edge technology. We invest in secure and integrated banking technology, designed to provide clients with the most advanced and convenient digital banking experience available.

• Understanding our clients’ unique needs. We acknowledge that no two businesses are alike, and therefore, strive to provide customized solutions.

• Making your transition seamless. We realize changing banks requires effort. We anticipate any potential inconveniences, and will provide a “white glove” transition process where we seek to do the work for you.

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Proof in Numbers

Loans(in thousands)

Thanks to our team of great bankers and our vibrant Texas economy, Total Loans have grown at a compound annual growth rate of 22% over the last four years.

Deposits(in thousands)

During the past four years, Total Deposits have grown at a compound annual growth rate of 11%. During the same period, Core Deposits grew by an even more impressive CAGR in excess of 21%.

Total Assets(in thousands)

Total Assets have grown at a more moderate rate, as we have purpose-ly reduced our non-core securities portfolio in order to fund loans to our growing client base.

Stockholder’s Equity(in thousands)

We continue to grow our Capital through Retained Earnings and by increasing our Reserves. As of De-cember 31, 2019, we remain well capitalized with a Tier 1 Leverage Ratio of 9.1% and Total Risk Based Capital Ratio of 12.5%.

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From left standing:

Wendy Blackwell Executive Vice President, Deposit & Treasury Services

Patrick Brown Executive Vice President, Commercial Real Estate

Travis Houstoun Executive Vice President, Chief Credit Officer

Jason Matthews Executive Vice President, Commercial & Private Banking

Doug Staley Executive Vice President, Chief Risk Officer

From left seated:

Patrick Hazelip Executive Vice President, Chief Financial Officer

Douglas E. Hutt Chairman and CEO

Tracy Lozes Senior Vice President, Human Resources

Not pictured:

John Thomson Senior Vice President, Mortgage Warehouse

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All the Right People When you bank with us, you aren’t just getting a banker, you are getting a whole team. Our leaders have a myriad of invaluable backgrounds and experiences that accrue to the benefit of our clients. Dallas Capital Bank culture believes we go further together vs competing with one another. Therefore, our whole team is here to support your banking needs – together.

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“Quality is never an accident; it is always the result of high intention, sincere effort, intelligent directions, and skillful execution; it represents the wise choice of many alternatives.”

Willa A. Foster

Statement of Condition

Assets DEC 2015 DEC 2016 DEC 2017 DEC 2018 DEC 2019

Cash and cash equivalents $ 113,017 $ 90,144 $ 43,565 $ 64,073 $ 53,551

Securities 186,508 215,441 206,881 171,837 111,875

Loans, net 289,130 363,966 488,989 567,512 635,703

Other assets 39,064 48,738 50,532 50,277 49,699

TOTAL ASSETS $ 627,719 $ 718,289 $ 789,967 $ 853,699 $ 850,828

Liabilities and stockholder’s equity

Deposits 409,488 442,253 498,973 569,879 630,645

Federal Home Loan Bank advances 142,825 197,644 205,000 191,000 123,000

Other liabilities 2,244 2,240 3,141 3,857 3,408

Total liabilities 554,557 642,137 707,114 764,736 757,053

Stockholder’s equity 73,162 76,152 82,853 88,963 93,775

TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY $ 627,719 $ 718,289 $ 789,967 $ 853,699 $ 850,828

(in thousands)

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Larry Makel, Director

Mr. Makel has been a partner of Dorsey & Whitney LLP since 2017. He is a founding partner of the Dallas office of Patton Boggs, LLP, which doubled in size under his leadership. Mr. Makel has deep roots in Dallas banking and founded three successful banking institutions: Highland Bancshares, Inc., Texas Capital Bank, and Resource Bank.

Doug Deason, Director

Mr. Deason is the president of Deason Capital Services, LLC. He currently serves on the Board of Directors of Ryan, LLC, Foreland Resources, Intrexon Energy Part-ners, and DCS Hospitality. Mr.Deason also serves on the Advisory Board of Valesco Industries, the Texas Public Policy Foun-dation, the Lone Star Justice Alliance, the Executive Board of The Bobby Lyle School of Engineering at SMU and is chairman of the Advisory Board of The Darwin Deason Institute for Cyber Security at SMU.

Bruce Monroe, Director

Mr. Monroe is the CEO and Co-Founder of OTB Global Enterprises, Inc. Previously, Mr. Monroe was the CEO of the Denkmann family of businesses. Mr. Monroe has over thirty years of experience in the oil and gas industry, non-hydrocarbon gases, commercial development/construction, timberland management, and other real estate industries.

Board of Directors

Doug Hutt, Chairman and CEO

Mr. Hutt is chairman and CEO of Dallas Capital Bank and Park Cities Financial Group. Previously, he was president of Compass Bank, Texas, and president of Bank of America, Dallas. Mr. Hutt served on the boards of directors at the Cox School of Business at SMU, the Dallas Chamber of Commerce, the Dallas Citizens Council, and Goodwill Industries.

Robert Schack, Director

Mr. Schack is the chairman emeritus of American Business Bank in Los Angeles, and he has been in the banking business since the late ‘60s at both Security Pacific Bank and 1st Business Bank. In 1998, he joined four other executives to form American Business Bank, a financial institution serving small and middle size companies in Southern California.  Mr. Schack also acts as an advisor for the Endicott Group, a private equity firm specializing in investments in the financial services industry.

Donald Powell, Director

Mr. Powell served as FDIC chairman from ‘01–’05, and was named by President Bush as the Federal Coordinator of Gulf Coast Rebuilding. In 2008 he was award-ed the Presidential Citizens Medal. He was chairman, president, and CEO of The First National Bank of Amarillo. He served on the Board of Regents of Texas A&M, and is now a board member of the George Bush School of Government and Public Service. He has served as Director at Bank of Amer-ica, and currently serves on the board of T.D. Williamson and Gateway Mortgage.

Thank you to our employees for always

going above and beyond. You have

loyally served our clients and our

company during this unprecedented

time. Because of you, we will prevail!

From the Board of Directors

04.2020

dallascapitalbank.com | 972.391.680014185 Dallas Pkwy #200, Dallas, TX 75254

HOW DALLAS DOES BUSINESS