tsbs, inc. (a non-profit organization) financial

FINANCIAL STATEMENTS & INDEPENDENT ACCOUNTANTS' REPORTCOMMUNICATION TO THOSE CHARGED WITH GOVERNANCECOMMUNICATION ABOUT INTERNAL CONTROLS

TSBS, INC.

JUNE 30, 2021 AND 2020

FINANCIAL STATEMENTS

BATON ROUGE, LOUISIANA

(A NON-PROFIT ORGANIZATION)

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Exhibit 9

PAGE

INDEPENDENT ACCOUNTANTS' REPORT 1-2

STATEMENT OF ASSETS, LIABILITIES & NET ASSETS - INCOME TAX BASIS 3AS OF JUNE 30, 2021 AND 2020

STATEMENT OF REVENUES RECEIVED, EXPENSESPAID, DEPRECIATION & CHANGES INNET ASSETS - INCOME TAX BASISFOR THE YEAR ENDING JUNE 30, 2021 AND 2020

NOTES TO FINANCIAL STATEMENTS 6-26

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TABLE OF CONTENTS

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TED SOILEAU, CPA, LLC

1

TED SOILEAU, CPA, LLC CERTIFIED PUBLIC ACCOUNTANT

2133 Silverside Drive, Suite C * Baton Rouge, Louisiana 70808 * (225)766-7910 * (225)766-7961 MEMBER

AMERICAN INSTITUTE TED A. SOILEAU, CPA CERTIFIED PUBLIC ACCOUNTANTS

INDEPENDENT ACCOUNTANTS’ REPORT

To the Board of Trustees TSBS, Inc. Baton Rouge, Louisiana

Report on the Financial Statements

I have audited the accompanying financial statements of TSBS, Inc., which comprise the Statement of Assets, Liabilities, & Net Assets – Income Tax Basis as of June 30, 2021 and 2020, the related Statement of Revenues Received, Expenses Paid, Depreciation & Changes in Net Assets – Income Tax Basis for the year ending June 30, 2021 and 2020, and the related notes to the financial statements.

Management’s Responsibility for the Financial Statements

TSBS, Inc. management is responsible for the preparation and fair presentation of these financial statements in accordance with the income tax basis of accounting, as described in Note 1, that TSBS, Inc. uses for income tax purposes; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Fund’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control. Accordingly, I express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

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TED SOILEAU, CPA, LLC

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Opinion In my opinion, the financial statements referred to above present fairly, in all material respects,

the Assets, Liabilities, and Net Assets – Income Tax Basis of TSBS, Inc. as of June 30, 2021 and 2020 and its Revenues Received, Expenses Paid, Depreciation & Changes in Net Assets – Income Tax Basis for the year ending June 30, 2021 and 2020 in accordance with the basis of accounting TSBS, Inc. uses for income tax purposes, as described in Note 1.

Basis of Accounting

As described in Footnote 1, the financial statements are prepared on the basis of accounting TSBS, Inc. uses for income tax purposes, which is a basis of accounting other than accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter.

Baton Rouge, Louisiana

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TSBS, INC.BATON ROUGE, LOUISIANA

STATEMENT OF ASSETS, LIABILITIES & NET ASSETS INCOME TAX BASIS

AS OF JUNE 30, 2021 AND 2020June 30, 2021 June 30, 2020

Total Total

Cash & Cash Equivalents (Notes 1, 3, 7 & 9) 111,227$ 1,143,333$ Prepaid Expenses - 2,260 Investments (Notes 3 & 9) 8,045,432 8,694,019 Rabbi Trust Investment Assets (Notes 3, 4 & 9) 709,978 689,094 Buildings and Improvements (Note 5) 732,070 531,783 Office Equipment & Furniture (Note 5) 123,041 119,506 Accumulated Depreciation (Note 5) (269,390) (249,095) Land & Land Improvements (Note 5) 945,000 344,195 Utility Deposits 1,980 1,980 Total Assets 10,399,338$ 11,277,075$

LIABILITIESPayroll Liabilities -$ 1,437$ Tuition Received in Advance (Note 2) 93,945 12,585 Paycheck Protection Loan (Note 12) 126,759 100,005 Total Liabilities 220,704$ 114,027$

NET ASSETS (NOTES 1 & 9) Net Assets without Donor Restriction 10,178,634$ 11,163,048$ Net Assets with Donor Restriction - - Total Net Assets 10,178,634$ 11,163,048$ Total Liabilities and Net Assets 10,399,338$ 11,277,075$

LIABILITIES AND NET ASSETS

ASSETS

The accompanying notes are an integral part of these statements3

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STATEMENT OF REVENUES RECEIVED, EXPENSES PAID, DEPRECIATION & CHANGES IN NET ASSETS - INCOME TAX BASIS

FOR THE YEAR ENDING JUNE 30, 2021

SUPPORT AND REVENUETuition, Fees and Program Revenues 348,451$ -$ 348,451$ Bank Interest Income 16 - 16 Book Sales 54 - 54 Referral Fee 3,300 - 3,300 Unrealized Gain - Land & Building (Notes 1 & 5) 801,092 - 801,092 Total Support and Revenue 1,152,913$ -$ 1,152,913$

EXPENSES: (Note 11) SESSION SERVICESDirect Session 66,503$ -$ 66,503$ Indirect Session 665,590 - 665,590 Total Session Services 732,093$ -$ 732,093$

SUPPORT SERVICESAdministrative 883,472$ -$ 883,472$ Total Support Services 883,472$ -$ 883,472$ Total Expenses 1,615,565$ -$ 1,615,565$ Change in Net Assets from Operations (462,652)$ -$ (462,652)$

Investment Return: (Notes 3 & 4)Investment Return 1,636,977$ -$ 1,636,977$ less : Investment Fees (50,508) - (50,508) less: DLW Salary (72,475) - (72,475) Total Investment Return 1,513,994$ -$ 1,513,994$

Change in Net Assets: (Notes 1 & 10)Change In Net Assets 1,051,342$ -$ 1,051,342$ Net Assets at Beginning of Year 11,163,048 - 11,163,048 PPP Loan Forgiveness (Note 12) 100,005 - 100,005 Transfer of Net Assets (Note 13) (2,135,761) - (2,135,761) Net Assets At End of Year 10,178,634$ -$ 10,178,634$

Net Assets without Donor

Restriction

Net Assets with Donor

RestrictionTotal


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STATEMENT OF REVENUES RECEIVED, EXPENSES PAID, DEPRECIATION & CHANGES IN NET ASSETS - INCOME TAX BASIS

FOR THE YEAR ENDING JUNE 30, 2020

SUPPORT AND REVENUETuition, Fees and Program Revenues 1,681,944$ -$ 1,681,944$ Book Sales 170 - 170 Reimbursements 5,540 - 5,540 Total Support and Revenue 1,687,654$ -$ 1,687,654$

EXPENSES: (Note 11) SESSION SERVICESDirect Session 256,568$ -$ 256,568$ Indirect Session 226,923 - 226,923 Total Session Services 483,491$ -$ 483,491$

SUPPORT SERVICESAdministrative 779,004$ -$ 779,004$ Total Support Services 779,004$ -$ 779,004$ Total Expenses 1,262,495$ -$ 1,262,495$ Change in Net Assets from Operations 425,159$ -$ 425,159$

Investment Return: (Notes 3 & 4)Investment Return (29,547)$ -$ (29,547)$ less : Investment Fees (79,994) - (79,994) less: DLW Salary (72,475) - (72,475) Net Assets Released from Restriction 76,530 (76,530) - Total Investment Return (105,486)$ (76,530)$ (182,016)$

Change in Net Assets: (Notes 1, 3 & 10)Change In Net Assets 319,673$ (76,530)$ 243,143$ Net Assets at Beginning of Year 13,440,209 76,530 13,516,739 Transfer of Net Assets (Note 13) (2,596,834) - (2,596,834) Net Assets At End of Year 11,163,048$ -$ 11,163,048$

Net Assets without Donor

Restriction

Net Assets with Donor

RestrictionTotal


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TSBS, INC. BATON ROUGE, LOUISIANA

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 AND 2020

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NOTE 1 – ORGANIZATION AND ACCOUNTING POLICIES Nature of Activities: a) TSBS, Inc. (operating as The Graduate School of Banking at Louisiana State University)

was organized on September 19, 1980 to provide classroom training in areas of interest toindividuals employed by the banking industry and other financial institutions. Theorganization concentrates its activities in the southern United States.

Accounting Policies: a) TSBS, Inc. is a non-stock, not-for-profit corporation which is exempt from federal

income taxes under Section 501(c)(3) of the Internal Revenue Code. TSBS, Inc. operatesas The Graduate School of Banking at Louisiana State University. (See Note 10)

b) Property and equipment are presented in the financial statements on the basis of cost lessallowance for depreciation. Depreciation expense is computed using the straight-linemethod over the estimated useful lives of the respective assets. Costs associated withthese assets or new assets purchased which have a useful life of more than one year arecapitalized ($500 capitalization policy) and depreciated over their estimated useful lives.Effective June 30, 2021, TSBS, Inc has elected to report it’s building and land at FairMarket Value, see note 5.

c) The preparation of financial statements in conformity with an other comprehensive basisof accounting requires the Officers of the School to make estimates and assumptions thataffect certain reported amounts and disclosures. Accordingly, actual results may differfrom those estimates.

d) The Board has elected to present a non-classified Statement of Assets, Liabilities, & NetAssets reflecting both assets and liabilities in their order of liquidity beginning with themost liquid.

e) Cash & Cash Equivalents is defined as the FDIC Insured checking account as well asCash Equivalents held by the Investment Custodian, Hancock/Whitney, in their TempAccount Money Market Fund.

f) Investments are stated at fair value which is determined by quoted market prices asreported by the custodian financial institution, Hancock/Whitney (i.e. Hancock Bank andTrust), as of June 30, 2021 and 2020, respectively. No collateral is required on anyinvestment assets acquired. All investment assets are designated as trading securities.

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NOTE 1 – ORGANIZATION AND ACCOUNTING POLICIES (Continued)

g) The organization allocates all expenditures under two expense classifications. Those classifications are program services and support services. The nature of the differences in the types of expenses classified under these major categories are as follows:

Session Services - activities involving the conduct of the educational programs and courses offered by the School.

Support Services - activities that involve the management of the organization’s operations.

Functional Expenses - The cost of providing certain activities of TSBS, Inc. have been summarized on a functional basis in the statement of revenues received, expenses paid, depreciation & changes in net assets – income tax basis. Certain categories of expenses are attributable to membership programs and others administrative support. These expenses include depreciation, salaries, payroll taxes and other benefits, and supplies. Depreciation is allocated entirely to Administrative Supporting Services. Other expenses are allocated based on estimates of time and purpose.

h) Non-Direct Advertising costs are expensed as incurred. Non-direct advertising costs include brochures mailed out to all known students. Board members are charged with responsibilities to verbally communicate the rewards of a TSBS, Inc. education. The TSBS, Inc. website and e-newsletter along with faculty and former students all play a part in the overt non-direct advertising to verbally communicate the rewards of a TSBS, Inc. education. Such non-direct costs are included with printing, technology, travel costs of the Executive Director and the Board members.

i) Also, in accordance with FASB ASC 958, TSBS, Inc. has elected to present the Statement of assets, liabilities & net assets – income tax basis as of June 30, 2021 using a sequenced statement presentation (i.e. non – classified. Assets are presented sequentially according to their nearness of conversion to cash and liabilities according to the nearness of their maturity and resulting use of cash. See Note 9.

The financial statements of TSBS, Inc. are prepared under the income tax basis of accounting whereby revenues are recognized when received and expenses are recognized when paid.

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8

NOTE 1 – ORGANIZATION AND ACCOUNTING POLICIES (Continued)

j. Subsequent events are events or transactions that occur after June 30, 2021 but before the financial statements are available to be issued. There are two (2) types of subsequent events;

a. Recognized Subsequent Events - are subsequent events that provide additional evidence about conditions that existed at the date the Statement of Assets, Liabilities & Net Assets, including the estimates inherent in the process of preparing the financial statements. The measured impact of these events will impact the recording of adjustments to account balances as of June 30, 2021.

b. Nonrecognized Subsequent Events - are subsequent events that provide evidence about conditions that did not exist at the date of the Statement of Assets, Liabilities & Net Assets but, arose after June 30, 2021 but before the financial statements were available to be issued and will not generally have a measured financial statement impact on account balances as of June 30, 2021.

As of PENDING the date of release of the financial statements to the management of TSBS, Inc., management has evaluated the impact of all subsequent events occurring after June 30, 2021. Management of TSBS, Inc. has not identified any recognized subsequent events nor any non-recognized subsequent events that require disclosure in the attached financial statements.

NOTE 2 – TUITION RECEIVED IN ADVANCE

During the Pre-COVID-19 year(s), there were certain instances that would arise where students who have already paid their tuition were unable to begin the course as originally scheduled. In those instances, the student’s participation is rescheduled for a later class year and the tuition received is recorded as a liability until the student commences class participation. The impact of COVID-19 on the school year ending June 30, 2020, resulted in the suspension of the School. The tuition received will be applied to the school years ending June 30, 2021, if COVID-19 does not cause a repeat suspension. The management of TSBS, Inc. has decided for income tax reporting purposes it must recognize the tuition received as income for the fiscal years ending June 30, 2021 and 2020.

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9

NOTE 3 – INVESTMENTS

Investments are stated at fair value which is determined by quoted market prices as reported by the custodian financial institution as of June 30, 2021 and 2020 and are listed below. No investment assets are identified as derivative financial instruments. TSBS, Inc. has significant investments in stocks, bonds and money market funds which are held by an investment manager and are therefore subject to concentrations of credit risk.

Cost Market237,315$ 237,315$

4,277,547$ 5,686,877$ 2,124,034$ 2,121,240$ 6,638,896$ 8,045,432$

38,403$ 38,403$ 322,991$ 345,318$ 237,049$ 326,257$ 598,443$ 709,978$

Rabbi Trust: (See Note 4)Money Market Funds

Fixed IncomeEquityTotal

June 30, 2021

Money Market FundsMarketable Securities:

Fixed IncomeEquityTotal

Cost Market257,727$ 257,727$

2,416,129$ 2,471,397$ 5,776,580$ 5,964,895$ 8,450,436$ 8,694,019$

23,165$ 23,165$ 367,786$ 393,999$ 255,927$ 271,930$ 646,878$ 689,094$

9,097,314$ 9,383,113$

June 30, 2020

Rabbi Trust: (See Note 4)

Fixed Income

Total Investment Holdings

Money Market Funds

Money Market Funds

EquityTotal

Marketable Securities:

EquityTotal

Fixed Income

Note: Total investment holdings do not include money market funds held by the investment custodian. These funds have been classified as cash & cash equivalents on the Statement of Assets, Liabilities, & Net Assets – Income Tax Basis.

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10

NOTE 3 – INVESTMENTS (Continued)

These funds represent amounts set aside in prior years for the purpose of providing an income stream for annual operations. All investments are held for trading purposes and the income which can be generated for use in the tax-exempt functions of TSBS, Inc. The following schedule summarizes the investment return and its classification on the Statement of Revenues Received, Expenses Paid, Depreciation and Changes in Net Assets – Income Tax Basis for the years ended.

Jun 30, 2021 Jun 30, 2020Interest & Dividends 161,721$ 288,340$ Net Realized Losses 242,985 (42,115) Net Unrealized Gains 1,232,271 (275,772)

Total Investment Additions 1,636,977$ (29,547)$ less:

Trust/Investment Fees (50,508) (79,994) Retiree Salary (72,475) (72,475)

Total Investment Subtractions (122,983) (152,469) Total Investment Return 1,513,994$ (182,016)$

Investment Activity

As mandated by FASB ASC 820-10, for assets measured at fair value on a recurring basis the following quantitative disclosures about the fair value measurements for each major category of investment asset is required.

FMV RECONCILIATIO

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NOTES TO FINANCIAL STATEMENTSJUNE 30, 2021 AND 2020

NOTE 3 - INVESTMENTS - Continued

Quoted Prices Significant Other Significant in Active Markets Observable Unobservable

For Identical Assets Inputs Inputs TOTAL FMV ( Level 1 ) ( Level 2 ) ( Level 3 )

TEMP ACCOUNT - Hancock/Whitney ** 51,016$ 51,016$ -$ -$ ** - Cash included in Cash Equivalents

OPERATING ACCOUNT - Hancock/WhitneyMoney Market Fund 237,315$ 237,315$ -$ -$

Fixed Income: (Corp & Gov't Oblig.)A 63,307$ -$ 63,307$ -$ A- 366,148$ -$ 366,148$ -$ A+ 57,011$ -$ 57,011$ -$ AA 75,425$ -$ 75,425$ -$ AA- 30,997$ -$ 30,997$ -$ Aaa 650,322$ -$ 650,322$ -$ BBB+ 78,556$ -$ 78,556$ -$ N/A 799,474$ -$ 799,474$ -$ Total Fixed Income $ 2,121,240 $ - $ 2,121,240 $ -

Hancock/Whitney Mutual Funds:HANCOCK HORIZON BURKENROAD SMALL CAP FUND INSTITUTIONAL CLASS $ 98,098 $ 98,098 -$ -$

BLACKROCK SYST MULTI STR INST $ 163,578 $ 163,578 -$ -$ CAUSEWAY EMERGING MARKETS FUND - INST $ 449,943 $ 449,943 -$ -$

COHEN & STEERS GLOBAL REALTY SHARES I $ 295,186 $ 295,186 -$ -$

COHEN & STEERS GL INFR-I $ 142,771 $ 142,771 -$ -$ DFA COMMODITY STRATEGY PORTFOLIO $ 88,269 $ 88,269 -$ -$

GOLDMAN SACHS GOVERNMENT FUND - CLASS: INST (#465) $ 237,315 $ 237,315 -$ -$

GOLDMAN SACHS ABSOLUTE RETURN TRACKER FUND - I $ 165,330 $ 165,330 -$ -$

HANCOCK HORIZON MICROCAP FUND CLASS I $ 105,541 $ 105,541 -$ -$

HANCOCK HORIZON INTERNATIONAL SMALL CAP FUND CLASS I $ 326,735 $ 326,735 -$ -$

HANCOCK HORIZON QUANTITATIVE LONG/SHORT FD INSTITUTIONAL CLASS $ 236,756 $ 236,756 -$ -$

Total Mutual Funds 2,309,521$ 2,309,521$ -$ -$

FAIR VALUE MEASUREMENTS AT REPORTING DATE USING

2021

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2021

Equities:CONSUMER DISCRETIONARY $ 549,041 549,041$ -$ -$ CONSUMER STAPLES 167,694 167,694 - - CORPORATES 18,369 18,369 - - ENERGY 136,106 136,106 - - FINANCIALS 392,175 392,175 - - HEALTH CARE 416,799 416,799 - - INDUSTRIAL 315,382 315,382 - - INFORMATION TECHNOLOGY 1,077,188 1,077,188 - - MATERIALS 112,639 112,639 - - TELECOMMUNICATIONS SERVICES 46,686 46,686 - - MUNICIPAL BONDS 1,320 1,320 - - UNCLASSIFIED 115,410 115,410 - - UTILITIES 28,547 28,547 - - Total Equities 3,377,356 3,377,356 - -

Total Operating A/C Investments 8,045,432$ 5,924,192$ 2,121,240$ -$

12

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2021

RABBI ACCOUNTMoney Market Fund - Hancock/Whitney 38,403$ 38,403$ -$ -$

Fixed Income: (Corp & Gov't Oblig.)BLACKROCK HIGH YIELD PORTFOLIO $ 15,635 $ 15,635 -$ -$ FEDERATED TOTAL RETURN BOND FUND 314,485 314,485 - - GOLDMAN SACHS EMERGING MKTS DEBT 15,198 15,198 - - Total Fixed Income $ 345,318 $ 345,318 -$ -$ Equities/Mutual Funds:HANCOCK HORIZON BURKENROAD 5,271$ 5,271$ -$ -$ BLACKROCK SYST MULTI STR INST 10,928 10,928$ CAUSEWAY EMERGING MARKETS 29,415 29,415 - - COHEN & STEERS GLOBAL REALTY 17,863 17,863 - - COHEN & STEERS GL 9,329 9,329 - -

DFA COMMODITY STRATEGY PORTFILO 5,354 5,354 - -

DELAWARE SMALL CAP CORE FUND 5,300 5,300

FEDERATED HERMES KAUFMANN LARGE 52,808 52,808 - -

FEDERATED HERMES MDT LARGE CAP 40,208 40,208 - - GOLDMAN SACHS ABSOLUTE RETURN TRACKER FUND-l 11,310 11,310 - -

HANCOCK HORIZON MICROCAP FUND CLASS l 5,349 5,349 - -

HANCOCK HORIZON INTERNATION SMALL CAP FUND CLASS I 19,723 19,723 - -

HANCOCK HORIZON DYNAMIC ASSET ALLOCATION FUND CLASS l 15,881 15,881 - -

HANCOCK HORIZON DIV. INCOME FUND INSTITUTIONAL CLASS 9,312 9,312 - -

HANCOCK HORIZON QUANTITATIVE LONG/SHORT FD INSTITUTIONAL CLASS 15,779

15,779 - -

LAZARD INTERNATIONAL EQUILTY PORT 44,129 44,129 - -

MFS MID CAP GROWTH FUND - I 15,908 15,908 - - TORTOISE MID CAP VALUE - INST 12,390 12,390 - - Total Equities 326,257$ 326,257$ -$ -$

Total Rabbi Trust Investments Assets 709,978$ 709,978$ -$ -$

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NOTE 3 INVESTMENTS - ContinuedQuoted Prices Significant Other Significant

in Active Markets Observable Unobservable For Identical Assets Inputs Inputs

TOTAL FMV ( Level 1 ) ( Level 2 ) ( Level 3 )

TEMP ACCOUNT - Hancock/Whitney ** 1,060,625$ 1,060,625$ -$ -$ ** - Cash included in Cash Equivalents

OPERATING ACCOUNT - Hancock/WhitneyMoney Market Fund 257,727$ 257,727$ -$ -$

Fixed Income: (Corp & Gov't Oblig.)A 45,038$ -$ 45,038$ -$ A- 182,371$ -$ 182,371$ -$ A+ 32,429$ -$ 32,429$ -$ AA- 108,777$ -$ 108,777$ -$ BBB 31,304$ -$ 31,304$ -$ BBB+ 162,677$ -$ 162,677$ -$ N/A 1,908,801$ -$ 1,908,801$ -$ Total Fixed Income $ 2,471,397 -$ $ 2,471,397 -$

Hancock/Whitney Mutual Funds:BLACKROCK SYST MULTI STR INST 205,423$ $ 205,423 -$ -$ CAUSEWAY EMERGING MARKETS FUND 386,256$ $ 386,256 -$ -$ COHEN & STEERS GL INFR 133,187$ $ 133,187 -$ -$ COHEN & STEERS GLOBAL REALTY SHARES I 260,710$ $ 260,710 -$ -$ DFA COMMODITY STRATEGY PORTFOLIO 60,934$ $ 60,934 -$ -$ GOLDMAN SACHS ABSOLUTE RETURN TRACKER FUND - I $ 139,477 $ 139,477 -$ -$

HANCOCK HORIZON BURKENROAD SMALL CAP FUND INSTITUTIONAL CLASS 176,061$ $ 176,061 -$ -$

HANCOCK HORIZON DIV. INCOME FUND INSTITUTIONAL CLASS 138,183$ $ 138,183 -$ -$

HANCOCK HORIZON INTERNATIONAL SMALL CAP FUND CLASS I 279,574$ $ 279,574 -$ -$

HANCOCK HORIZON MICROCAP FUND CLASS I 157,437$ $ 157,437 -$ -$ HANCOCK HORIZON QUANTITATIVE LONG/SHORT FD INSTITUTIONAL CLASS 236,802$ $ 236,802 -$ -$

ISHARES CORE S&P 500 ETF 34,376$ $ 34,376 -$ -$ ISHARES MSCI EAFE ETF 10,531$ $ 10,531 -$ -$ ISHARES MSCI EMERGING MARKETS ETF 10,597$ $ 10,597 -$ -$ ISHARES RUSSELL 2000 ETF 9,879$ $ 9,879 -$ -$ TORTOISE MLP & PIPELINE - INST 93,875$ $ 93,875 -$ -$ VANGUARD GLOBAL EX-US REAL ESTATE ETF 6,346$ $ 6,346 -$ -$ VANGUARD REAL ESTATE ETF 12,408$ $ 12,408 -$ -$ Total Mutual Funds 2,352,056$ 2,352,056$ -$ -$


2020

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NOTE 3 INVESTMENTS - ContinuedQuoted Prices Significant Other Significant

in Active Markets Observable Unobservable For Identical Assets Inputs Inputs

TOTAL FMV ( Level 1 ) ( Level 2 ) ( Level 3 )


2020

Equities:CONSUMER DISCRETIONARY $ 180,263 180,263$ -$ -$ CONSUMER STAPLES 201,652 201,652 - - CORPORATES 26,119 26,119 - - ENERGY 200,873 200,873 - - FINANCIALS 809,887 809,887 - - HEALTH CARE 517,146 517,146 - - INDUSTRIALS 378,822 378,822 - - INFORMATION TECHNOLOGY 1,071,053 1,071,053 - - MATERIALS 103,746 103,746 - - MISCELLANEOUS 52,648 52,648 - - TELECOMMUNICATIONS SERVICES 70,630 70,630 - - Total Equities 3,612,839 3,612,839 - - Total Operating Account Investments 8,694,019$ 5,964,895$ 2,471,397$ -$

RABBI ACCOUNTMoney Market Fund - Hancock/Whitney 23,165$ 23,165$ -$ -$

Fixed Income: (Corp & Gov't Oblig.)BLACKROCK HIGH YIELD PORTFOLIO $ 10,118 $ 10,118 -$ -$ EATON VANCE FLOATING RATE CLASS l 5,071 5,071 - - FEDERATED TOTAL RETURN BOND FUND 363,766 363,766 - - GOLDMAN SACHS EMERGING MKTS DEBT 15,044 15,044 - - Total Fixed Income $ 393,999 $ 393,999 -$ -$

Equities/Mutual Funds:CAUSEWAY EMERGING MARKETS FUND - INST 68,217$ 68,217$ -$ -$ COHEN & STEERS GL INFR-I 14,834 14,834 - - COHEN & STEERS GLOBAL REALTY SHARES I 30,060 30,060 - - DFA COMMODITY STRATEGY PORTFOLIO 9,378 9,378 - - HANCOCK HORIZON INTERNATIONAL SMALL CAP FUND CLASS I 13,173 13,173 - -

HARBOR MID CAP VALUE FUND - INST 23,629 23,629 - - LAZARD INTERNATIONAL EQUITY PORT - INST 56,539 56,539 - - MFS MID CAP GROWTH FUND - I 40,187 40,187 - - TORTOISE MLP & PIPELINE - INST 15,913 15,913 - - Total Equities 271,930$ 271,930$ -$ -$

Total Rabbi Trust Investments Assets 689,094$ 689,094$ -$ -$

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16

NOTE 3 – INVESTMENTS (Continued)

FASB ASC 820-10, Fair Value Measurements, establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy consists of three broad levels;

Level 1 Inputs - consist of unadjusted quoted prices in active markets for identical assets and have the highest priority,

Level 2 Inputs - are inputs other than quoted prices that are observable for the asset, either directly or indirectly. If the asset has a specified contractual term, a Level 2 input must be observable for substantially the full term of the asset. Level 2 inputs include the following;

a) Quoted prices for similar assets or liabilities in active markets,

b) Quoted prices for identical or similar assets or liabilities in markets that are not active, i.e. markets in which there are few transactions for the asset or liability, the prices are not current, or price quotations vary substantially either over time or among market makers or in which little information is released publicly.

c) Inputs other than quoted prices that are observable for the asset or liability,

d) Inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3 Inputs - are unobservable inputs for the asset or liability. Unobservable inputs are used when observable inputs are not available. This usually occurs when there is little, if any, market activity for the asset or liability at the measurement date. Unobservable inputs shall reflect the reporting entity's own assumptions about the assumptions that market participants would use in pricing the asset or liability which includes assumptions about risk. Level 3 inputs are developed based on the best information available under the circumstances, which might include the reporting entity's own data. Level 3 inputs have the lowest priority in pricing.

TSBS, Inc. uses appropriate valuations techniques, provided by Hancock/Whitney, based on the available inputs to measure the fair value of its investments. When available, TSBS, Inc., and Hancock/Whitney, measure fair value using Level 1 Inputs because they generally provide the most reliable evidence of fair value. Level 2 inputs would only be used when Level 1 inputs are unavailable. Level 3 inputs would be used only when Level 1 and Level 2 inputs are unavailable.

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17

NOTE 3 – INVESTMENTS (Continued) LEVEL 1 FAIR VALUE MEASUREMENTS The fair values of certain common stock, U.S. Treasury Bills, Notes and Bonds are based on quoted market prices as determined by Interactive Data and Reference Data, the pricing vendor for Hancock/Whitney Bank.

LEVEL 2 FAIR VALUE MEASUREMENTS The fair values of certain U.S. Government Agency obligations and corporate bond holdings are based on a variety of evaluation methodologies, as determined by Interactive Data and Reference Data, the pricing vendor for Hancock/Whitney Bank. A detailed listing of those methodologies, while too numerous to list, will be made available on request by Hancock/Whitney Bank.

The preceding methods described may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, although management believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

NOTE 4 – NON-QUALIFIED DEFFERED COMPENSATION LIABILITY TSBS, Inc. sponsors a non-qualified executive compensation plan for the benefit of the Former Executive Director/ Executive Vice-President. The Organization elected to freeze the plan effective July 1, 2005. (See Note 3) The non-qualified compensation plan is an un-funded and non-qualified plan and the promised benefit will be paid out of the general assets of TSBS, Inc. A Rabbi Trust has been created to serve as the funding vehicle for the promised benefit. The freezing of the Plan, effective 7/1/05, resulted in a pre-determined annual benefit totaling $72,475 per year upon the retirement of the Executive Director. Planned benefit payments began August 1, 2020. As noted above, TSBS, Inc. has implemented a plan to fund this obligation by placing investment assets in a separate investment account, established as a Rabbi Trust. Because these assets have been placed in a Rabbi Trust, the Board has elected not to use these assets for any purpose other than to pay benefits due to the Executive Director until all obligations to him under the plan are satisfied thereby non-qualified executive compensation plan restricting these assets until that obligation has been paid. Creditors of TSBS, Inc. can require that the assets in the Rabbi Trust be used to satisfy their claims instead of the non-qualified executive compensation plan to the Internally Former Executive Director.

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NOTE 4 – NON-QUALIFIED DEFFERED COMPENSATION LIABILITY (Continued) See Note 3 for a breakdown of invested assets by category, cost and fair market value of these invested assets in the Rabbi Trust. Also, listed below is a summary of the investment return on these assets. These assets are internally restricted until the retirement obligation to the Executive Director has been satisfied.

June 30, 2021 June 30, 2020Beginning Rabbi Trust FMV 689,094$ 1,236,290$

Interest & Dividends 23,190 38,855 Net Realized Gains(Losses) 11,703 (11,554) Net Unrealized Gains (Losses) 69,317 3,991 less : Trust Fees (3,963) (7,982) less : DLW Paychecks (72,475) (78,019) less : Transfer In/(Out) (6,888) (492,487)

Total Rabbi Trust Income 20,884$ (547,196)$ Ending Rabbi Trust FMV 709,978$ 689,094$

NOTE 5 – PROPERTY AND EQUIPMENT Fixed assets are comprised of three (3) major classes of assets. These assets and their recorded cost, depreciation expense and accumulated depreciation are listed below. For the fiscal year ending June 30, 2021, TSBS, Inc. has elected to present the Land and Building and Improvements at its appraised value, the fair market value adjustments for Land and Building and Improvements are listed below.

Current Accumulated NetDescription Cost Depreciation Depreciation Book ValueLand 344,195$ -$ -$ 344,195$ Land - FMV Adjustment 600,805 - - 600,805 Building and Improvements 531,783 17,205 157,421 374,362 Building - FMV Adjustment 200,287 - - 200,287 Office Equipment & Furniture 123,041 3,088 111,969 11,072 Total 1,800,111$ 20,293$ 269,390$ 1,530,721$

Current Accumulated NetDescription Cost Depreciation Depreciation Book ValueLand 344,195$ -$ -$ 344,195$ Building and Improvements 531,783 17,205 140,217 391,566 Office Equipment & Furniture 119,506 6,425 108,878 10,628 Total 995,484$ 23,630$ 249,095$ 746,389$

June 30, 2020

June 30, 2021

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NOTE 6 – 403(b) DEFINED CONTRIBUTION PLAN TSBS, Inc. sponsors a 403(b)-employee benefit plan for eligible employees who meet age and service requirements. Employee contributions are voluntary and are matched by contributions from TSBS, Inc. Since 403(b) plans are tax deferred annuity plans employee contributions are made through a salary reduction arrangement and the participants are not taxed on the amount of the contributions until distributed from the plan. Total employer matching contributions were $30,344 and $24,083 for the year ending June 30, 2021 and 2020, respectively. This plan is subject to the provisions of the Employee Income Security Act (ERISA).

NOTE 7 – CONCENTRATION OF CREDIT RISK Periodically during the year ended June 30, 2021 funds held in the operating checking account were in excess of the FDIC insurance coverage limits. This represents a concentration of credit risk. As of June 30, 2021, the checking account did not exceed the FDIC Coverage. TSBS, Inc. has significant investments in stocks, bonds and Money Market Accounts held by an investment manager engaged by this entity and is therefore subject to concentrations of credit risk. Investments are made by the investment manager and the investments are monitored by the Executive Director and the Executive Committee. Though the market value of investments are subject to fluctuations on a year-to-year basis, management believes the investment policy is prudent for the long-term welfare of the entity. Investments represent a significant portion of total assets. Such investments are subject to interest rate and other risks including the possible loss of principal. Future changes in the financial markets could affect the future earnings from these investments.

Since TSBS, Inc. provides educational services to individuals and financial institutions primarily in the southeast United States, the financial health of the banking industry can significantly impact TSBS, Inc. and therefore represents a concentration of credit risk.

TSBS, Inc. also annually negotiates its student and faculty room and board with two vendors who currently are the only viable entities to provide these services. This reliance on two key vendors represents a concentration of credit risk.

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NOTE 8 – RENT TSBS, Inc. entered into a five-year lease agreement for a copier on February 27, 2018, with a monthly minimum payment amount of $546.83, excluding usage fees. At the end of the initial lease, the lease will be automatically renewed for one-month periods until cancelled via written notice to the Lessor between 90 and 150 days before the end of any term. The total expense for rental of this equipment was $8,788, including variable usage fees, for the year ending June 30, 2021. The following is an analysis of the minimum future lease payments subsequent to June 30, 2021:

FISCAL YEAR AMOUNT2021 6,562$ 2022 6,562$ 2023 4,375$

NOTE 9 – LIQUIDITY AND AVALIABLITY OF FINANCIAL ASSETS TSBS, Inc.’s working capital and cash flows are consistent throughout the year attributable to the cash receipts for tuition in the fiscal year. Monthly cash outflows vary each year based on the specific requirements of the TSBS, Inc. ‘s activities for that fiscal year end. To manage liquidity the TSBS, Inc. maintains investments of $8,156,659 that available to drawn upon as needed during the year to manage cash flow.

The following reflects the TSBS, Inc.‘s financial assets as of the balance sheet date, reduced by amounts not available for general use within one year of the balance sheet date because of contractual or donor-imposed restrictions or internal designations. Amounts not available include amounts set aside for operating and other reserves that could be drawn upon if the TSBS, Inc. or the Executive Board approves that action.

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NOTE 9 – LIQUIDITY AND AVALIABLITY OF FINANCIAL ASSETS (Continued) 2021 2020

Cash and Cash Equivalents 111,227$ 1,143,333$ Investments 8,045,432 8,694,019 Rabbi Trust 709,978 689,094 Total Financial Assets 8,866,637$ 10,526,446$

less: Financial Assets unavailable for general expenditurewithin one year due to:

Purpose Restrictions -$ -$ Internal Restrictions (Notes 4 & 11) (709,978) (689,094) Donor-Designated Restrictions - -

Financial Assets Available for Cash Need for Expenditures Within One Year 8,156,659$ 9,837,352$

NOTE 10 – INCOME TAXES TSBS, Inc. is exempt from federal income taxes under Section 501 (c) (3) of the Internal Revenue Code and received it's tax exemption determination letter on December 18, 1981. It was determined at that date that TSBS, Inc. was in compliance with applicable Internal Revenue Code provisions. TSBS, Inc. has not amended nor changed the original plan of operation since the approval dates by the IRS. The Officers and management of TSBS, Inc. believe that TSBS, Inc. is currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Service. The IRS determination letter specifically exempts TSBS, Inc. from income tax and the Officers and management believe that TSBS, Inc. continues to operate in a manner that is in accordance with applicable Internal Revenue Code sections to remain a tax-exempt entity. Although TSBS, Inc. is exempt from income taxes, certain activities of TSBS, Inc. could become taxable. In general, unrelated business taxable income is subject to taxation. Unrelated business taxable income, i.e. UBTI, is defined as any trade or business regularly carried on. As of June 30, 2021, TSBS, Inc. had not identified any unrelated business taxable income.

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NOTE 10 – INCOME TAXES (Continued) Accounting for the uncertainty of tax positions can impact the financial statements. Even though TSBS, Inc. is exempt from income taxes, it must still consider whether their exempt income and other activities might be determined to be unrelated business income, and whether they have properly maintained their tax-exempt status. FASB ASC 740, published by the Financial Accounting Standards Board, addresses the issue of accounting for the uncertainty of material tax positions impacting the financial statements. The Officers and management of TSBS, Inc. have adopted the provisions of FASB ASC 740 as of June 30, 2009. The accounting for all material positions taken, or expected to be taken, on any income tax return is governed by FASB ASC 740. Income tax returns include those that were filed or that should have been filed with Federal taxing authorities. It is the Officers' & managements policy to assess all material positions taken on any Federal income tax return. The Officers & management of TSBS, Inc. will require their legal and tax counsel to communicate to them all such uncertain tax positions in order to evaluate the impact of the tax position and the reporting and disclosure required. This requirement will apply to not only the current reporting year but also to all prior open reporting years that could still be subject to examination by a taxing authority. The Officers and management of TSBS, Inc. have determined that any material uncertain tax positions that are presented to them will be recognized and measured using a "more-likely-than-not", (MLTN) threshold. The MLTN threshold means that;

1. A benefit related to an uncertain tax position may not be recognized in the financial statements unless it is MLTN that the position will be sustained based on its technical merits, and

2. There must be more than a 50 % likelihood that the position would be sustained if challenged and considered by the highest court in the relevant jurisdiction.

Measurement of any uncertain tax position will require calculating the cumulative probability of an outcome either for or against the tax position. The tax benefit of a qualifying position is the largest amount of tax benefit that is more than 50 % likely to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. Initial recognition of an uncertain tax position will require continued reassessment of the tax position on an annual basis. As of each year end any unresolved uncertain tax positions must be reassessed, and the Officers must determine whether (1) the factors underlying the sustainability assertions have changed and (2) the amount of the recognized tax benefit is still appropriate.

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NOTE 10 – INCOME TAXES (Continued) Developments such as case law, changes in tax law, new rulings or regulations issued by taxing authorities, could affect whether a tax position should be recognized or the amount that should be reported. TSBS, Inc. will be required to accrue interest and penalties that, under present tax law, TSBS, Inc. would incur if the uncertain tax position ultimately were not sustained. For the fiscal year ending June 30, 2021, there were no identified material uncertain tax positions for the open years of 2016-2021 with the filing of any U.S. Federal Income tax return. Tax returns have been filed for the years 2016-2021 and the statute of limitations, pursuant to IRS Section 6501, will expire for the year 2016 upon the filing of the 2021 tax return.

NOTE 11 – EXPENSES BY NATURAL AND FUNCTIONAL CLASSIFICATION

The financial statements report certain categories of expenses that are attributable to one or more session or support functions of the TSBS, Inc. These expenses include depreciation, interest, session and facilities operations and maintenance. Depreciation is allocated entirely to administrative and there was no interest expense incurred. Costs of other categories were allocated on estimates of time and purpose. Total expenses include all operating expenses and the nonoperating expenses.

Expenses of the organization are classified by a natural expense classification or a functional expense classification. The natural expense classification groups expenses according to the kinds of economic benefits received in incurring the expenses, e.g., salaries and employee benefits, professional fees, rent, supplies, telephone, travel, etc. The functional expense classification involves grouping expenses according to the purpose for which they are incurred (i.e., expenses for program services and session services).

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NOTE 11 – EXPENSES BY NATURAL AND FUNCTIONAL CLASSIFICATION (Continued)

2021 Support Services

EXPENSESAdministrative Meetings -$ -$ 19,902$ 19,902$ Administrative Salaries & Benefits (Note 6) - - 692,495 692,495 Depreciation (Note 5) - - 20,293 20,293 DLW Retirement 60,263 - - 60,263 Equipment Rentals (Note 9) - - 7,200 7,200 Faculty Honoraria - 380,922 - 380,922 Faculty Travel & Transportation - 31,433 - 31,433 Faculty Meals & Entertainment - 3,307 - 3,307 Other Session Expenses - 16,869 - 16,869 Other Support Services (Note 8) - 64,639 - 64,639 Supplies - 16,377 - 16,377 Session Rentals - 13,528 - 13,528 Payroll Taxes - - 48,359 48,359 Professional Fees - - 48,787 48,787 Postage, Supplies & Promotion - - 29,545 29,545 Rent 2,550 2,550 Room and Board - 138,515 - 138,515 Student Workers & Temporary Help 6,240 - - 6,240 Utilities - - 14,341 14,341 TOTAL EXPENSES 66,503$ 665,590$ 883,472$ 1,615,565$

Session Services

Direct Session Indirect Session AdministrativeTOTAL EXPENSES

BY NATURAL CLASSIFICATION

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NOTE 11 – EXPENSES BY NATURAL AND FUNCTIONAL CLASSIFICATION (Continued)

2020 Support Services

EXPENSESAdministrative Meetings -$ -$ 114,126$ 114,126$ Administrative Salaries & Benefits (Note 6) - - 443,949 443,949 Depreciation (Note 5) - - 23,630 23,630 DLW Retirement 120,525 - - 120,525 Equipment Rentals (Note 9) - - 4,872 4,872 Faculty Honoraria - 96,784 - 96,784 Faculty Travel & Transportation - 35,745 - 35,745 Home Study Problems 23,607 - - 23,607 LSU Parking 500 - - 500 Other Session Expenses - 8,756 - 8,756 Other Support Services (Note 8) - 49,619 - 49,619 Supplies - 34,019 - 34,019 Session Rentals - 2,000 - 2,000 Payroll Taxes - - 38,749 38,749 Professional Fees - - 58,351 58,351 Postage, Supplies & Promotion - - 80,682 80,682 Student Workers & Temporary Help 111,936 - - 111,936 Utilities - - 14,645 14,645

TOTAL EXPENSES 256,568$ 226,923$ 779,004$ 1,262,495$

Session ServicesDirect Session Indirect Session Administrative

TOTAL EXPENSES BY NATURAL

CLASSIFICATION

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NOTE 12 – PAYCHECK PROTECTION PROGRAM

TSBS, Inc., has received two Paycheck Protection Loans (“PPP”) loans since the inception of the PPP Program. The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The loans and accrued interest are to be forgiven by the Small Business Administration (“SBA”) as long as the borrower uses the loan proceeds for eligible purposes during the 8-week or 24-week Covered Period, which begins on the day the loans are received or the beginning of the first payroll cycle after the loan was received. Eligible expenses that can be paid using PPP funds include payroll, benefits, rent, utilities, and business mortgage interest; however, at least 60% of the loan must be used for payroll. In addition, the borrower must also maintain its employee headcount and payroll levels by not reducing any employee’s pay and/or hours, and if a reduction is incurred, the employee headcount, pay, and/or hours must be restored by December 31, 2021. The amount of loan forgiveness will be reduced if the borrower terminates employees, reduces salaries or hours, or uses the loan proceeds for disallowed expenses during the Covered period, unless the reductions are considered exceptions under the Safe Harbor provisions outlined by the SBA. If incurred, the reductions in forgiveness can be hedged by electing a 24-week Covered Period and including all eligible expenses incurred during that time frame.

On April 7, 2020, and January 22, 2021, TSBS, Inc. was approved to receive PPP loan proceeds in the amount of $100,005 and $126,759, respectively. TSBS used the proceeds appropriately to meet the conditions for forgiveness of the loan and received forgiveness in the full amount of both loans by the Small Business Administration on December 23, 2020, and September 8, 2021, respectively.

NOTE 13 – RELATED PARTY During the fiscal year ending June 30, 2021 and 2020, the TSBS, Inc. transferred investment assets to the Woodland Foundation, to further the tax exempt educational support organization funding for the Woodland Foundation. For the fiscal year ending June 30, 2021 and 2020, these transfers from TSBS, Inc. to the Woodland Foundation totaled $2,135,761 and $2,596,834, respectively.

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tsbs, inc. (a non-profit organization) financial

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