Grand River Commerce : 4TH qUARTER eARNINGS STATEMENT

GRAND RIVER COMMERCE, INC.

Table of Contents

March 21, 2022

To Our Shareholders:

We are pleased to present this performance summary for Grand River Commerce, Inc. (the "Company") and its subsidiary, Grand River Bank (the "Bank"), for the twelve-month period ended December 31, 2021.

2021 was a very good year for our Company; by many important measures, the best in our history. Earnings and total assets posted new records, while asset quality - the performance of our loan portfolio - remained exceptionally strong. Our uniquely talented team was bolstered by the addition of a number of financial professionals who share our commitment to community banking and whose skills will help us be even more successful. We completed critical system upgrades, honed our strategic plan, opened a new office, navigated the ongoing pandemic and contributed in a variety of ways to the betterment of the individuals, businesses, non-profits and communities we serve - all with our signature optimism, energy and enthusiasm.

As of December 31, 2021, total assets of the Company stood at $489 million, an increase of $38 million from year-end 2020. The forgiveness of $76 million in PPP balance during the year - a positive in terms of how the program was designed to operate, but a drag on our asset growth - camouflaged our robust annual loan growth of $63 million. Loan demand, particularly in the commercial sector, was strong and indicative of the appeal of our brand of banking and the general resiliency of the West Michigan economy. Loan growth was funded by strong deposit growth of $45 million or 11.8% and excess cash reserves, with the surplus invested in available-for-sale securities.

Growth in our loan portfolio and the associated revenue are important, but only to the extent that the loans we make perform according to their contractual terms. Booking new loans while chasing bad debt is, ultimately, a zero-sum exercise. Historically, our portfolio has been pristine. That was again the case throughout 2021, with negligible delinquency, no charge-offs and only one well- managed non-performing loan relationship. We take pride in the skill of our lenders, the strength of our borrowers and the thoroughness of our credit administration practices. We're also proud that our portfolio performance puts us in an elite group of banks within our Federal Reserve district.

At year-end, our allowance for loan losses, net of fully-guaranteed PPP loans, stood at 1.29%, compared to 1.49% a year ago. Following industry standards, we calculate our reserve, in part, by applying quantitative and qualitative factors, including indicators that represent overall economic conditions and trends. The decrease in our reserve percentage is primarily the result of continued improvement in those economic indicators as of year-end. Those strengthening indicators favorably impacted the calculation, resulting in a lower provision expense despite growth in the portfolio. On a gross basis, the allowance was 1.27% at December 31, 2021. The reduced allowance percentage equates to approximately $604,000 in net income.

The Company and the Bank reported pre-tax net income of $4,243,000 and $5,169,000, respectively, as of December 31, 2021. Pre-tax/pre-provision Company income was up approximately 9.6%.

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Net interest income increased $2,329,000, or 21%, on a year-over-year basis. Key contributing factors were reduction in interest expense, growth in earning assets and the recognition of PPP- related loan fee income, which, in accordance with accounting standards, is being recognized over the life of the loans. Pervasively low interest rates continue to impact both sides of the balance sheet, resulting in overall reductions in both earning asset yields and the cost of funds.

Non-interest income declined 26% from last year, primarily due to a reduction in the volume of residential mortgage loans sold to secondary market investors. Decreased year-over-year commercial banking revenue from intermediary fees on third party interest rate swap transactions - a function of the low-rate environment - also contributed to the NII decline. Fluctuating interest rates and a continued supply/demand imbalance (more buyers than properties available for sale) may further distort local market dynamics, contribute to production limitations over which we have no control and diminish the contribution from our West Michigan mortgage unit in future reporting periods.

Non-interest expense increased $2,197,000, or 21.7%, year-over-year. Approximately $387,000 of the increase resulted from deferred salaries and benefit expenses associated with the first round of

1. lending in 2020. As with PPP-related fee income, origination costs are also recognized over the lives of the loans. The year-over-year variance reflects both reduced PPP loan volume and the lower origination cost per loan for round two PPP activity in 2021. Net of these PPP-related expenses, the year-over-year NIE increase was 16.9% and was attributable to pre-planned expenditures for critical operating systems, technology enhancements and strategic team member additions to support continued growth and profitability.

Maintaining capital ratios that meet or exceed the regulatory definition of well-capitalized continues to be a priority. As has been the case since its inception, the Bank again met those requirements as of December 31, 2021. The Company also holds reserves that can further support the growth of the Bank and the Company and provide a cushion in the event of unanticipated economic pressure.

Our new office, located at 50 Crahen Avenue, N.E. in the Ada/Cascade area, is proving to be a valuable addition. Opened in January 2021, this impressive new facility, which appears on the cover of this report, allows us to more effectively serve our growing customer population, while enhancing our visibility in this important market. As our second office in thirteen years of operation, it also speaks to our conservative brick-and-mortar philosophy and complements our other delivery channels, including our sophisticated technology platform and our very popular mobile banking courier service.

Our comprehensive strategic plan identifies the success of our core banking operation, coupled with the careful exploration and development of additional revenue streams, as drivers of shareholder value. After evaluating and rejecting a number of opportunities over several years, our board has approved an initiative that, when fully functional later this year, will expand our mortgage lending capabilities well beyond West Michigan, while prudently managing the associated risks. We believe that this expansion has the potential to provide impressive shareholder value and we look forward to sharing more information in subsequent reports.

In a world that's connected like never before, yet at times, strikingly impersonal, we're passionate about what it means to be community bankers. For our team, that means that we thrive on

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personal relationships and equally-personal service, with a strong commitment to our community. We're nimble and flexible, responsive, and consultative and we make the best financial products and services available to those who depend upon us. We're cheerful, energetic, and thoughtful and our culture is based upon optimism, achievement, and a passion to serve.

The best and brightest financial professionals in West Michigan are drawn to our team and, in a commoditized business and a competitive environment, they make us uniquely appealing. Our team members and our board of directors make our Bank a premier financial partner to all those who rely upon us and we're deeply grateful to each of them.

Our financial results are always available via the Investor Relations section of our website, www.grandriverbank.com. We encourage you to use this comprehensive resource to track our performance and to gain valuable information about your investment in our Company. We remain committed to taking full advantage of our many opportunities, pleased with our overall trajectory and confident in our future. Thank you for your investment and your support.

Sincerely,

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