Monticello Bankshares, Inc. was established in 1982 to provide strength and oversight for its wholly owned subsidiary, the Monticello Banking Company (MBC). MBC is a Kentucky commercial bank chartered in 1895 with its corporate office located in Monticello. The bank has operated under the same name and at the same location since its inception. MBC operates sixteen full service community banking offices in 8 counties in Southern Ken-tucky. MBC offers a wide range of banking and investment services which are provided through our branch offices and our growing internet presence. We would like the opportu-nity to serve all of your financial needs. Please call or visit our offices at your convenience and visit us online at www.mbcbank.com.

Note to Shareholders

Shareholder Inquiries, Stock Transfer or Dividend Payments If you have inquiries or questions regarding your Monticello Bankshares shareholder account, please call Helen Dolen-Richardson at (606) 348-1202 or 1-800-909-3420 or write

Monticello Bankshares, Inc. • P.O. Box 421 • Monticello, KY 42633

InternetFor information on financial results, products and services please visit our website: www.mbcbank.com

Corporate HeadquartersMonticello Bankshares, Inc. • 50 N. Main St., P.O. Box 421

Monticello, Kentucky 42633 • (606) 348-8411 or 1-800-909-3420

Annual MeetingThe annual meeting of shareholders will be held on Thursday, April 12th, 2018 at the Historic Wayne Theater, 30 N. Main Street, Monticello, Kentucky at 3:30 p.m. EDT.

Dividend CalendarDividends, as declared by the Board of Directors, are customarily paid to shareholders of record as follows:March 1 – payable March 10June 1 – payable June 10September 1 – payable September 10

December 1 – payable December 10

Financial InformationFor a copy of our audit report, please contact Frances Watson, Sr. Vice President

at (606) 348-8411 or 1-800-909-3420

or email fwatson@mbcbank.com.

Independent AuditorsCrowe Horwath LLP 144 N Broadway Lexington KY, 40507Office: 859-280-5156

Shareholder Information

Corporate Profile

Monticello Bankshares, Inc. (MBI) is once again a single bank holding company as of March 17, 2017 when the Bank of Harlan was merged into Monticello Banking Company (MBC). The com-bining of our efforts brought improved efficien-cy and additional competency that resulted in another tremendous year for our company. We continue to look for opportunities for growth that will increase market diversity and enhance value to our shareholders. On February 12, 2018, MBC announced its intentions to acquire the Bluegrass Community Bank in Danville, KY. The proposed transaction, if approved, would bring our total of counties served to nine with 18 full service banking offices in eastern, western, and central Kentucky.

We want to provide all of your banking needs and ask that you continue to recommend our bank to others. For additional information, please feel free to contact us directly.

Glasgow Russell Co. Casey Co. Albany Bowling Green Somerset MonticelloHarlan

ASSETS

Cash and due from Banks Federal funds sold Total Cash and Cash Equivalents

Interest Bearing Time Deposits in Other Financial Institutions Securities - Available for Sale Securities - Held to MaturityRestricted Investments Total Securities

Net LoansBank premises and equipmentGoodwill, NetOther assets

Total Assets

Non-interest bearing deposits Interest-bearing deposits Total Deposits

FHLB BorrowingsLine of Credit Total Other Borrowed Funds

Other Liabilities

Total Liabilities

Preferred stock: $5 Par Value, 50,000 sharesAuthorized: (2017) 24,896 (2016) 26,736 shares Issued & Outstanding

Common stock: $5 Par Value, 8,000,000 shares Shares Authorized & Issued: (2017) 4,267,467 (2016) 4,250,627 respectively Shares Outstanding: (2017) 4,120,762 (2016) 4,117,422 respectively

SurplusRetained earningsAccumulated Other Comprehensive Income (Loss) Total Shareholders’ Equity Total Liabilities and Shareholders’ Equity

$ 25,452,0001,000

$ 25,453,000

$ 1,488,000 153,616,000

05,145,000

$160,249,000

$464,580,00016,876,000

1,000,00025,603,000

$693,761,000

$ 85,321,000515,007,000

$600,328,000

$ 16,051,000 0

$ 16,051,000

$ 2,086,000

$618,465,000

$ 125,000

20,604,0007,602,000

47,179,000(214,000)

$ 75,296,000

$693,761,000

$ 30,596,0007,475,000

$ 38,071,000

$ 1,984,000175,122,000

05,062,000

$182,168,000

$438,739,00015,821,000

1,000,00025,977,000

$701,776,000

$ 97,572,000512,014,000

$609,586,000

$ 21,371,000 0

$ 21,371,000

$ 2,025,000

$632,982,000

$ 134,000

20,587,0007,569,000

42,259,000(1,755,000)

$ 68,794,000

$701,776,000

LIABILITIES AND SHAREHOLDERS’ EQUITY

Consolidated for the Year Ended December 31, 2017

STOCKHOLDERS’ EQUITY

2017 2016

Statement of Financial Conditionfin

an

cia

ls

2017$ 22,976,000

4,030,000

498,000

$ 27,504,000

$ 2,739,000

154,000

$ 2,893,000

$ 24,611,000

$ 926,000

$ 2,960,000

216,000

143,000

2,290,000

$ 5,609,000

$ 11,772,000

2,600,000

5,715,000

$ 20,087,000

$ 9,207,000

$ 1,792,000

$ 7,415,000

Interest Income on Loans

Interest Income on Securities

Interest Income on Federal Funds Sold & Other Interest Income

Total Interest Income

Interest Expense on Deposits

Interest Expense on Other Borrowed Funds

Total Interest Expense

Net Interest Income

Provision for Loan Losses

Service Charges on Deposit Accounts

Gain (Loss) on Sale of Securities

Secondary Market Mortgage Fees

Other Income

Total Non-Interest Income

Salaries & Employee Benefit Expense

Occupancy Expense

Other Non-Interest Expense

Total Non-Interest Expense

Net Income Before Income Taxes

Income Tax Expense

Net Income

$18,983,000

3,503,000

264,000

$22,750,000

$ 2,797,000

12,000

$ 2,809,000

$19,941,000

$ 475,000

$ 2,721,000

291,000

485,000

3,609,000

$ 7,106,000

$10,000,000

2,283,000

5,612,000

$17,895,000

$ 8,677,000

$ 1,208,000

$ 7,469,000

Consolidated for the Year Ended December 31, 2017

2016

Statement of Incomefin

an

cia

ls

Monticello Bankshares, Inc. Kenneth Ramsey, Chairman

Kenny Ramsey, President & CEO

Dr. James K. Phillips, Jr., Vice Chairman

D. Mack Butler

Earl Croushorn

Roger Dalton

Marilyn Drake

Rick Drake

Bob Hayden

Van Phillips

Albany Advisory Board Rick Drake - Chairman, D. Jeff Choate, Gene Dunnington, Paula Little, E. Howard Stockton, Steve Tallent

Bowling Green Advisory Board Dr. J. K. Phillips, Jr. - Chairman, Adam Burden, Lanny Loague, Jr., Marc Lovell, Rodney Rogers, David Tarter, Ben Thornton, Gayla Warner, Dr. Michael Zachek

Casey County Advisory Board Lyle Denney - Chairman, Todd Hoskins, Garland Sharp, Brian Woodrum

Glasgow Advisory Board Van Phillips - Chairman, T. Richard Alexander, Sheila Dishman, Bobby Hurt, John Taylor, III

Harlan Advisory BoardEarl Croushorn - Chairman, Rayburn Doss, Rick Fox, Mark David Goss, Wayne Greene, Don Parsons

Russell County Advisory Board Michael Blevins - Chairman, Randy Baird, Steve Bledsoe, David Smith, Fred Tarter

Somerset Advisory Board Sam Brown - Chairman, Mack Butler, Danny Ford, Matt Ford, Mark Haney, Bruce Orwin, Dr. Keith Sinclair, Terri Tuttle, LaNette Wright

Monticello Banking CompanyKenneth Ramsey, Chairman

Kenny Ramsey, President & CEO

Dr. James K. Phillips, Jr., Vice Chairman

Mike Blevins

Sam Brown

D. Mack Butler

Lyle Denney

Marilyn Drake

Rick Drake

Charles Fletcher

Mark Goss

Bob Hayden

President/Chief Executive OfficerKenny Ramsey*

Chief Operations Officer/EVPRegina Brinson

Chief Financial OfficerSandra Frost*

Chief Credit OfficerRodney Weaver

Chief Human Resource Officer Becky Dolen*

Chief Technology Officer Randy Parsons

Compliance Pattie Corder*

MarketingBarbara Gehring*

Auditor Dawn Harmon

Information & Security Officer Melissa Piercy

Board of Directors Corporate Management

CORPORATEHuman ResourceJones, JamieLester, Barbara*

ComplianceBrowning, BrandiGoley, Misty*

Marketing Edwards, Natalie

AccountingWatson, Frances,* SVP/ControllerCrabtree, Crystal*McGinnis, Amanda

AuditStearns, Johnna

Underwriting & Loan ServicingDunnington, Brandon, AVP/Underwriting Mgr.Reagan, Jamie,AVP/Loan Processing Mgr. Morrow, Brian, AVP/Loan Operations Mgr. Alexander, ZackaryBrewster, AmandaBurkhart, TiffanyBurnette, Nicole Decker, Norma Goley, Jonathan* King, LenaMilwee, MaryParmley, ChristyWillis, Charity

AppraiserSummers, Joe

Collections McClendon, Rick,* SVP/Special Assets Mgr.Nelson, TommyParmley, Heather

Information Technology Brown, Rickey,VP/Information Technology Mgr.Asberry, Kyle Coffey, GarrettDennis, JackieLowhorn, AmieTuttle, Tre`

Information Security Ramsey, Becky

Deposit OperationsDecker, Tabatha,*VP/Deposit Operations Mgr.Dobbs, MelissaDobbs, TabithaGuffey, Leverne*Lozano, AngelaMcGinnis, SylviaNelson, Debbie*Phipps, Elissa*

Maintenance & CourierHarmon, DavidNorfleet, Eddie

TRADEWAY BRANCHBranch Mgr.Weston, Angela*New AccountsBunch, ReneeLoansRoberts, Mary Lois*Tellers Day, BethaniEllis, JaKeillaHumble, PeggyHurd, AmyLucia, JaredStinson, Tiffany

HWY 90/BARNES DR. BRANCHSr. Exec. Officer Hicks, Jean* New AccountsAdams, Renee*LoansFoster, Wendy Rednour, Jayma*Rose, Kevin*TellersBertram, Elizabeth Davis, MarissaDuke, Misty Hicks, Whitney Staples, Shanyn

ALBANYRegional Exec. OfficerTucker, Anita Sr. Exec. OfficerJohnson, WillardNew AccountsSmith, RebeccaLoansBrown, Debbie*TellersAdams, RachelJones, Kendra Melton, Ashley Norris, AshleyStevens, HunterStockton, Kimberly

BOWLING GREEN

HARTLANDSr. Exec. OfficerTaylor, JoeExecutive Assistant Firkins, JenniferNew AccountsValles, AdrianaLoansStratton, MarvinTellersGraves, Kayla

CAVE MILLBranch MgrPierce, JanetNew AccountsLutzen, ElizabethLoansYates, ShandaTellersRogers, JanetVespa, Sabina

FAIRVIEWNew AccountsHoward, StephanieLoansKemp, KathrynTellersFeldman, RachelHagan, Courtney Hurd, MalloryWalters, AnnWoodburn, Dianne

GLASGOW Sr. Exec. OfficerWitty, LeighNew AccountsBowles, AmberLoansRedford, Tonya TellersAdwell, Lisa D. Cannon, KimCarter, Tiffany

CASEYSr. Exec. OfficerMeece, TonyaNew AccountsDowns, KristiLoans Hansford, Gregory Leigh, AnneMcClendon, MelissaTellersCochran, MelissaHines, MirandaSandusky, KendraTucker, SandraWright, Nanette

RUSSELLRegional Exec. OfficerTucker, AnitaExecutive AssistantMoney, NancyNew AccountsSmith, AngelaLoansHoover, BelindaMatney, ChristinTellersAntle, PaulaCoppage, MarshaJasper, CindyRoy, Lisa L.Tucker, Sharon

SOMERSET

NORTHSr. Exec. OfficerHudson, WallyAdm. Asst.McGrew, KaylaReceptionistParkey, LisaNew AccountsPrice, GlendaLoans Dungan, DebbieLyons, KennyReynolds, ValerieTellersCaballero, HelenHarden, MazettaHarper, JeffTaylor, VanessaVinson, Amber

SOUTHBranch Mgr./LoansCompton, SheilaExec. Asst. to COO/EVPGreene, JudyNew AccountsPrice, MatthewLoansBeshears, Amanda

DOWNTOWNBRANCHNew AccountsSimpson, Nadine*LoansDalton, TimHurd, Billy*TellersBarrier, Brenda*Bell, Amy Bell, Janet*Carrender, CaseyMartin, BeulahMassengale, Stephanie*

MONTICELLOMain OfficeReceptionistLair, Mary*New AccountsKeith, Patty*LoansBertram, ElaineDolen-Richardson, Helen*TellersCorder, DeLesia Gregory, Kista

Business DevelopmentElam, Perry

CustodiansStinson, PatriciaWalker, Debra

Bill Hall & Steven Booth

Corporate Management

* Employees with 20 plus years of service

SOUTH (continued)TellersHale, Sheila Hatfield, BrooklynMcQueen, DonnaMullins, Kendall Roy, Lisa A.

HARLAN

MANSIONSr. Exec. OfficerTolliver, SteveNew AccountsCraig, BethLoansHenson, GarryLoan ProcessingMiller, WhitneyTellersBlanton, AlexisMcMillian, EloraRoark, Londa

MAINNew AccountsWhite, Sheila*TellersJones, TinaNoah, KatelynCustomer Call CenterHoward, Kay*Thompson, Shirley*White, Kim*White, Rhonda*

VILLAGEReceptionistClem, MelissaOperations Mgr.Estep, Ashley New AccountsCavins, KevinLoansEnix, EugeneTellersChasteen, JaidForester, Alicia*Robbins, KindraWhite, Samantha