Rendering by Gossens Bachman Architects 2013 ANNUAL REPORT TO THE COMMUNITY Northfield Mutual Holding Company and Northfield Savings Bank Personal Service • Local Decision Making • Commitment to Community President’s Message March 2014 Dear Friends and Customers, On behalf of the Board, Corporators, management and staff of Northfield Savings Bank, I am pleased to report 2013 was a successful and productive year for the Bank. Our longstanding commitment to customer focused traditional banking proved once again to be an effective strategy. The Bank’s friendly knowledgeable staff, contemporary products and services, competitive interest rates and reasonable fees all contributed to the year’s success. Total assets and equity capital at year end were $754.1 million and $91.8 million, respectively. The Bank’s balance sheet remained liquid and well capitalized. Net income for the year was $5.45 million. The strong balance sheet and consistent earnings allow the Bank to contribute at least 10% of net income annually to community based non profit organizations. The “community dividend” in 2013 was $561,000. Loans at year end of $ 517.5 million were supported by $570.6 million of customer deposits and repurchase agreements. Loan quality remained very good throughout the year. Delinquent loans were a fraction of state and national averages. Northfield Investment Services experienced meaningful growth in 2013. Financial assets under management increased to $127.6 million. Nearly 1,500 customers in Central Vermont and Chittenden County are now utilizing the investment services division. The Bank’s continued success will be dependent on adherence to the attributes which have served us well since our founding in 1867. Remaining a depositor owned, locally managed community bank; maintaining a conservative and strong financial position; measuring success in terms of the customer experience, efficiency of operations and corporate citizenship; sound corporate governance; and attracting and retaining qualified staff who care about their customers and communities continue to frame our direction. We anticipate 2014 will be a fast paced year as the economy continues to improve and banking activity increases. Internally, our focus will be on several technology initiatives and the construction of a new operations center in Berlin. A rendering of the operations center appears on the front of this report. We greatly appreciate your support and thank you for allowing us to be your Bank. Sincerely, Thomas N. Pelletier President & CEO Front cover pictures (left to right): Original NSB home office, picture circa 1910; current NSB home office; new operations center in Berlin, scheduled for completion early 2015. Financials NORTHFIELD MUTUAL HOLDING COMPANY AND SUBSIDIARY BALANCE SHEETS STATEMENTS OF EARNINGS AS OF DECEMBER 31 (Dollars in thousands) FOR YEARS ENDED DECEMBER 31 (Dollars in thousands) 2013 2012 $ 22,112 $ 22,327 3,754 4,066 25,866 26,393 Interest Paid on Deposits Interest Paid on Borrowings 3,126 546 3,828 1,020 Total Interest Expense 3,672 4,848 22,194 21,545 (150) 4,372 395 (19,983) (450) 4,302 742 (19,705) 6,828 1,376 6,434 1,261 $ 5,452 $ 5,173 2013 2012 Cash and Cash Equivalents U.S. Government and Agencies Federal Home Loan Bank Stock Residential Loans Commercial Loans Consumer Loans Allowance for Loan Losses Bank Premises and Equipment Other Assets $ 8,794 $ 12,862 182,758 6,130 241,242 223,747 52,536 (6,011) 10,370 34,577 187,305 5,034 222,788 215,420 52,490 (5,987) 10,183 30,981 Total Assets $ 754,143 $ 731,076 Net Interest Income $ 527,364 Deposits Customer Repurchase Agreements 43,251 Federal Home Loan Bank Borrowings 85,564 Other Liabilities 6,126 Equity Capital 91,838 $ 518,633 Provision for Loan Losses Other Operating Income Security Gains Operating Expenses $ 754,143 $ 731,076 Assets Liabilities & Capital Total Liabilities and Capital 44,513 70,084 5,238 92,608 Interest on Loans Interest on Investments Total Interest Income Earnings Before Income Taxes Income Taxes Net Income The Bank had outstanding standby letters of credit of $1,485,000 as of December 31, 2013 and $1,246,000 as of December 31, 2012. Standby letters of credit are conditional commitments issued by the Bank to guarantee the performance of a customer to a third party. NET INCOME $754 $731 $685 2011 2012 2013 MILLIONS OF $ MILLIONS OF $ ASSETS $5.5 $5.2 $4.9 2011 2012 2013 Highlights • For the fifth consecutive year, NSB was voted “Best Bank” in the Times Argus Readers’ Choice poll. • Results from a customer survey showed 97% would recommend NSB to a friend or family member. • NSB partnered with ReSOURCE for a Green Up Day event. Customers were invited to bring small household items for free recycling and to see demonstrations of eStatements, a paperless way to bank. • NSB helped organize the first annual Chittenden County Saves Week, a series of free events and classes to promote budgeting and saving strategies. • Through a partnership with the Federal Home Loan Bank of Boston, NSB provided $90,000 in down payment and closing cost assistance to new home owners. • The Bank provided $60 million in mortgage financing and $17.9 million in home equity financing to 626 customers. • An eLoan Pay option was launched on the Bank’s website, allowing customers easier access to make NSB loan payments. • The Bank expanded the Mortgage Lending Department with the addition of a new lender in South Burlington. • Six employees were recognized for reaching the ten years of service milestone. A total of 73 (51%) NSB employees have been with the Bank for at least ten years. • Sixty-three percent of NSB employees took part in wellness programs, including a walking challenge, the annual Vermont Corporate Cup Race and a health coaching program. • As part of its commitment to employee development, the Bank provided $117,000 of training and education. Employees took advantage of several education opportunities including classes offered by the Northern New England School of Banking and the Center for Financial Training. • The Barre Branch and Northfield Investment Services offices were remodeled. NSB’s Corporate Cup Race team. The Barre Branch benefited from a new look in 2013. NSB In The Community Racing, Hockey, The World’s Fair, Swimming, Mardi Gras, and More Vermont offers a wide variety of activities and events throughout the year and NSB supports many of them. During 2013, NSB sponsored the July 4th stock car race and fireworks celebration at Thunder Road, the Norwich University Holiday Hockey Tournament and the Tunbridge World’s Fair. Our Flying Pig Plungers team, a hearty group of 11 employees and friends, raised $2,300 for Special Olympics Vermont while swimming in The 2013 Flying Pig Plungers huddle together for a group Lake Champlain picture after braving the icy waters of Lake Champlain. on a beautiful February morning. An additional 25 employees volunteered with registration, checking in all 1,400 swimmers. Who doesn’t love a parade? 2013 marked NSB’s tenth entry in the best celebration north of New Orleans, the annual Mardi Gras Parade. While it’s a bit colder in Vermont than the south, that didn’t stop over 25,000 people from coming out to scream for beads at this family friendly afternoon. The entire event benefited HOPE Works, a program dedicated to ending sexual violence. Thousands of people fill Church Street to celebrate Mardi Gras in support of HOPE Works. As a community bank, we take great pride in supporting local activities. In addition, NSB staff participated in many other events, including the July 4th celebration in Montpelier, the South End Art Hop in Burlington, Green Up Day, the Vermont Mountaineers, the Northfield Labor Day parade and walk-a-thons for the March of Dimes and breast cancer awareness programs. Skip sports an NSB shirt during a Mountaineers game. The Northfield Branch Green Up team. NSB In The Community Music, Music, Music Helping to Feed the Hungry What do Bobby McFerrin, Cabot High School, Bradford Marsalis, the Essex High School Flying Submarine Band, and Ivan Neville’s Dumpstaphunk all have in common? All were featured during the 2013 Burlington Discover Jazz The flying pig spotlight appears in the Festival. waterfront tent during the Dumpstaphunk concert. Seven years ago a group of NSB employees began organizing a St. Patrick’s Day Feast Against Famine dinner to benefit the Chittenden Emergency Food Shelf. This event raised over $36,000 in 2013 and $214,000 over the last seven years. The funds are used to support programs such as the Homebound Grocery Delivery program and Community Kitchen Academy, a culinary job training program. The Festival, now in its 30th year, is considered one of the top ten summer events by the Vermont Chamber of Commerce. NSB has been the Presenting Sponsor of the Festival since 2007 and looks forward to bringing music to the streets of Burlington in 2014 and beyond. Three years ago NSB formed a partnership with Vermont Public Television (VPT) during their holiday membership drive. For every pledge made to VPT during the drive, NSB donated three meals to the Vermont Food Bank. In 2013, 25,000 meals went to the Food Bank. In addition, NSB staff participated by answering phones at VPT during the drive. As one person put it, “I look forward to Jazz Fest all year because it has the power to wake this town up after a long, cold winter and bring us all together to dance, sing, smile, let go, support our amazing local musicians, and celebrate being alive!” NSB also helped bring music to many other venues throughout Vermont. The Bank sponsored the VSO Holiday Pops, Music in the Park in Bethel and Waterbury, and Broadway at the Barre Opera House, a summer musical production camp for kids. A festive table at the St. Patrick’s Day Feast Against Famine fundraising dinner. Donations Program At Northfield Savings Bank, we go above and beyond to give you 100% of the local, personal bank you want, plus we donate at least 10% of profits to Vermont community organizations. In disbelief, some skeptics may say, "When pigs fly!" But this is where pigs fly every day. In keeping with this tradition, in 2013 the Bank donated $561,000 to Vermont community organizations. Since the Board formalized this practice in 2002, donations have totaled over $4.7 million. In addition to monetary donations, NSB staff donates time and talent during business hours and on their own to hundreds of organizations. During 2013, NSB staff spent over 5,900 hours volunteering in the community. To learn more about the Bank’s donation program, please visit our website at nsbvt.com and look under learn/community-support. To view the list of organizations to which NSB made a monetary donation or employees volunteered time, look under learn/publications. United Way Flying Pig Footrace NSB is a proud supporter of the United Way. Each year the Bank participates in the annual fundraising A group of NSB employees clean up a trail campaign. In damaged by inclement weather. 2013, the total amount donated was $48,900. Employee pledges were matched dollar for dollar by the Bank and fun events such as “jeans day” and drawings helped build excitement for the campaign. One employee took part in the “Loaned Executive” program, working on the campaign full time at the United Way of Chittenden County office for 12 weeks, while his salary was paid by NSB. In 2013, over 340 racers took part in either a 5k or kids one mile fun run as part of the 35th Annual Flying Pig Footrace. A mainstay of the Northfield Labor Day Celebration, this event depends on over 60 volunteers from the Bank, the community and Norwich Corps of Cadets. Girls on the Run Vermont was the beneficiary of the 2013 race. Later during the weekend festivities, Penny Pig could be seen flying down Main Street in a custom built snow globe. A group of very creative employees embraced the theme: Winter Wonderland. In addition to financial support, several staff members volunteered to serve on the Board and committees of the Green Mountain United Way and United Way of Chittenden County. Our volunteers helped organize events such as the annual Kaleidoscope of Talent and Day of Caring events at Camp Ta-Kum-Ta, Camp Downer and the Mallory Brook trail. The NSB Labor Day parade snow globe. NSB Foundation The NSB Foundation directs a portion of the Bank’s charitable giving efforts by selecting a community organization to partner with over a three year period. This approach provides an opportunity to make a substantial financial pledge to one organization with the goal of achieving meaningful long lasting results. The Foundation is now halfway through a partnership with ReSOURCE. Their mission is to meet the community and individual needs through education and job skills training, environmental stewardship and economic opportunities. Foundation funding is used to support overall operating activities and specifically to assist with expanding the Weatherization Program. Weatherization services are provided to low and moderate income households through the YouthBuild program. The YouthBuild program provides an opportunity for men and women 16 to 24 years of age who have not yet completed high school, to obtain their diploma or fulfill GED requirements and gain valuable job skills. Participants are trained in construction while building affordable housing or weatherizing homes of low income Vermonters. The results provide lifelong skills for the student and lasting energy efficiency for homeowners. The YouthBuild team works together to provide renovations to a local park. Funds are also used to support the ReLIEF Essential Goods Program. The ReLIEF Program provides vouchers for low income families to shop at the ReSOURCE stores free of charge, saving the family money and diverting tons of materials from landfills. In addition to the Foundation’s contribution, and following the remodel of the Barre branch, NSB donated office furniture, as well as 30 computers to ReSOURCE. For more information about ReSOURCE, visit their website at www.resourcevt.org and click on the link to a documentary produced by NSB. The YouthBuild Americorps team enjoys a day of snow while providing community service. Northfield Mutual Holding Company Northfield Mutual Holding Company Officers Directors Nancy F. Pope, Chair J. Timothy Burke Brian C. Eagan Anne L. Gould Charles E. Haynes Brian C. Harwood Jonathan M. Jamieson John W. Lyon Mary Alice McKenzie Robin C. Nicholson Lauren D. Wobby Thomas N. Pelletier. . . . . . . . . . President and Chief Executive Officer Timothy M. Ross. . . . . . . . . . . . Treasurer Eileen W. Bradley. . . . . . . . . . . .Corporate Secretary Corporators Jon T. Anderson. . . . . . . . Montpelier Meredith T. Augustoni. . . Montpelier Anne E. Bourdon. . . . . . . Burlington J. Timothy Burke. . . . . . . Shelburne Brian A. Button. . . . . . . Chelsea Lilli B.Cain. . . . . . . . . . . Montpelier Paul J. Carbonneau. . . . Barre Nicole M. Carignan. . . . Essex Laura Carlsmith. . . . . . Hinesburg H. Wright Caswell. . . . . Shelburne Edward J. Corrigan. . . . . Northfield Jon P. Cunningham. . . . Montpelier Richard W. Darby. . . . . . Waterbury Michael C. Diender. . . . . Stowe Robert Dostis. . . . . . . . . Waterbury Brian C. Eagan. . . . . . . Grand Isle Ted Elzey. . . . . . . . . . . . Brookfield Jennifer Emens-Butler. . Bethel Samuel C. FitzPatrick. . . Montpelier Yael Friedman. . . . . . . . Williston Anne L. Gould. . . . . . . . . Northfield Sharon B. Gutwin. . . . . . Williston L. Stephen Hackett. . . . . Charlotte Stephanie T. Hainley. . . . Burlington John J. Handy. . . . . . . . . Essex Junction Brian C. Harwood. . . . . . Waterbury Charles E. Haynes. . . . . East Montpelier Timothy M. Heney. . . . . . Montpelier James Hermanowski. . . . Waterbury Stephen W.Hill. . . . . . . . Brookfield Robert J. Holden. . . . . . . Moretown Jonathan M. Jamieson. . Waitsfield F. Brian Joslin. . . . . . . . . Waitsfield Lisa L. Keysar. . . . . . . . . Burlington Travis J. Kingsbury. . . . . . Waterbury Susan M. Klein. . . . . . . . . Fayston Ky B. Koitzsch. . . . . . . . . .Fayston Karen Gillespie Korrow. . . Northfield Leo C. Laferriere. . . . . . . . Waitsfield Michael R. Lajeunesse. . . East Barre Jeffrey Larkin. . . . . . . . . . Waterbury Betty T. Lord. . . . . . . . . . . Brookfield Kevin B. Lord. . . . . . . . . . Barre John W. Lyon. . . . . . . . . . . Barre Mary Alice McKenzie. . . . Burlington Thomas Mehuron. . . . . . . Waitsfield Mary P. Miller. . . . . . . . . . Waterbury Center Marion C. Milne. . . . . . . . West Topsham Sue M. Minter. . . . . . . . . . Waterbury Center Eva M. Morse. . . . . . . . . . Calais Allyson H. Myers. . . . . . . . Shelburne Robin C. Nicholson. . . . . . Barre Jeffrey R. Nick. . . . . . . . . Shelburne Mary Heagarty Nowlan. . . Montpelier W. Dan Noyes. . . . . . . . . . Waterbury Center Adam C. Osha. . . . . . . . . Randolph Marissa Parisi. . . . . . . . . Shelburne Deborah A.Phillips. . . . . East Montpelier Jeffrey M. Phillips. . . . . . . Shelburne Nancy F. Pope. . . . . . . . . . Barre Samantha Quinn. . . . . . . Essex Nicole J. Ravelin. . . . . . . . Colchester C. Paul Reed. . . . . . . . . . Waterbury Thomas Robbins. . . . . . . Northfield Sandra A. Rousse. . . . . . . Barre Paula Routly. . . . . . . . . . . Burlington Mark Saba. . . . . . . . . . . . Burlington Leslie A. Sanborn. . . . . . . Barre Liz Schlegel. . . . . . . . . . . Waterbury Philip B. Scott. . . . . . . . . Berlin Steven M. Shea. . . . . . . . Waitsfield Marc E. Sherman. . . . . . . Burlington Heather F. Shouldice. . . . East Calais Linda W. St. Amour. . . . . . Richmond Fran Stoddard. . . . . . . . . Williston B. Thomas Sweet. . . . . . . Waterbury Center Wallace W.Tapia. . . . . . . Colchester Judith C. Tartaglia. . . . . . Northfield Daniel Van Der Vliet . . . . Huntington Charles W.Welch. . . . . . . South Royalton Donald E. Wells. . . . . . . . Colchester David J. Whaley. . . . . . . . Northfield James H. Wick. . . . . . . . . Burlington Lauren D. Wobby. . . . . . . .Northfield Joseph L. Woodin. . . . . . . Sharon Karen A. Zecchinelli. . . . . Berlin Nancy Zorn. . . . . . . . . . . . Barre Northfield Savings Bank Chuck H. Abare . . . . . . . . . . . . Northfield Manager M. Kelly Andrews . . . . . . . . . . . Waitsfield Manager Ian T. Arnold . . . . . . . . . . . . . . Mortgage Originator/Team Leader Lori H. Belding . . . . . . . . . . . . Product Development/CRA Manager Chad A. Bell . . . . . . . . . . . . . . Northfield Investment Services Clay E. Bell . . . . . . . . . . . . . . . Northfield Investment Services Donna M. Bohonnon . . . . . . . . Bethel Manager Eileen W. Bradley . . . . . . . . . . Corporate Secretary Kimberly S. Chapin . . . . . . . . . Human Resources Manager Linda J. Chugkowski . . . . . . . . Mortgage Originator Megan L. Cicio . . . . . . . . . . . . Commercial Lender Karen L. Cox . . . . . . . . . . . . . . Essex Manager Tracy L. Davis . . . . . . . . . . . . . Williston Road and College Street Manager Sherry L. Doane . . . . . . . . . . . Special Projects Manager Joel Dubé . . . . . . . . . . . . . . . . Commercial Lender Alfred J. Flory . . . . . . . . . . . . . Commercial Services Team Leader Nubia Z. Fuller . . . . . . . . . . . . Montpelier Manager Donna M. Gerdes . . . . . . . . . . Collections Manager Mary E. Gleason . . . . . . . . . . . Shelburne Road Manager Peter W. Goodell . . . . . . . . . . . Senior Retail Lending Manager Julie H. Goodrich . . . . . . . . . . Retail Lending Manager Nicole Hayes . . . . . . . . . . . . . Mortgage Originator Wendy C. Kellett . . . . . . . . . . . Waterbury Manager Debra L. Kerin . . . . . . . . . . . . . Barre Manager Kathy M. LaCross . . . . . . . . . . Branch Administrator Cheryl A. LaFrance . . . . . . . . . Senior Vice President/Consumer Banking/Marketing and Technology Maryellen LaPerle . . . . . . . . . . Mortgage Originator Delora J. Livingston . . . . . . . . Randolph Manager Christine E. Martin . . . . . . . . . Security Officer Stephen P. Mucha . . . . . . . . . Credit Administration Manager Richard B. Nelson . . . . . . . . . Technology/Information Systems Manager Melissa A. Neun . . . . . . . . . . Compliance/Bank Secrecy Officer Stephen J. Page . . . . . . . . . . . Cash Management Specialist Thomas N. Pelletier . . . . . . . . President and Chief Executive Officer Lois J. Pigeon . . . . . . . . . . . . . Taft Corners Manager Roger P. Pinan . . . . . . . . . . . . Mortgage Originator Wright C. Preston . . . . . . . . . . Commercial Lender John P. Ravaschiere . . . . . . . . Commercial Lender Cory B. Richardson . . . . . . . . Senior Vice President/Commercial Banking and Consumer Lending Timothy M. Ross . . . . . . . . . . . Senior Vice President/Treasurer and Administrative Services Edward T. Sulva . . . . . . . . . . . Controller/Assistant Treasurer/Operations Manager Paul H. Watson . . . . . . . . . . . . Commercial Lender Ava l. Whitcomb . . . . . . . . . . . Electronic Banking Manager Rosemarie White . . . . . . . . . . . Commercial Lender Debra L. Williams . . . . . . . . . . Retail Training Manager www.nsbvt.com 800-NSB-CASH BARRE (2) • BETHEL • BURLINGTON • ESSEX JUNCTION • MONTPELIER • NORTHFIELD • RANDOLPH • SOUTH BURLINGTON (2) • WAITSFIELD • WATERBURY • WILLISTON Personal Service • Local Decision Making • Commitment to Community
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