Welcome

to the Chelsea Groton Bank and Chelsea Groton Foundation

Annual Meeting
April 17, 2014

Chelsea Groton Bank

Ballot No. 1 NEW CORPORATORS

Michael Alfultis, PhD Ellen C. Brown Fred A. Conti

Chelsea Groton Foundation

Annual Meeting
April 17, 2014

Chelsea Groton Foundation Board

Chelsea Groton Corporators: Jeffrey R. Godley Eric M. Janney Chelsea Groton Officers: Harry P. Colonis Anne L. Odgen Zuzanna T. Olszewski Michael Rauh Denise T. Stapienski Laureen Tracy-Dufficy Lori-Ellen Wesolowski Anne H. Wilkinson

Chelsea Groton Trustees: D. Ben Benoit Mary Ellen Jukoski

Chelsea Groton Foundation Officers

Michael Rauh, President Eric M. Janney, Vice President Harry P. Colonis, Treasurer Lori-Ellen Wesolowski, Secretary

Chelsea Groton Foundation

Ballot No. 1
RE-ELECTION to the BOARD of TRUSTEES for a Second Three-Year Term ending with the Annual Meeting to be held in 2017 Mary Ellen Jukoski B. Michael Rauh, Jr.

Chelsea Groton Foundation

Statement of Activities 2013
Fund Balance 1/1/13 $ 2,804,953 Additions: Contributions Received 206,364 Increase in Market Value of Investments 298,514 Interest and Dividends Earned 29,638 Realized Gains on Investments 140,229 Reductions: Grants Awarded 150,405 Administrative Expenses 7,661 Income Taxes Due 9,050

Fund Balance 12/31/13

$ 3,312,582

Chelsea Groton Foundation Grant Making

Applications received 84 Grants awarded 64 Amount distributed $150,405

A Sample of Grants Made

Center for Hospice Care SE CT

Children's Museum of SE CT

Covenant Shelter of New London, Inc.

A Sample of Grants Made

OIC of New London County, Inc.

Malta, Inc.

Southeastern Council of Alcoholism & Drug Dependence (SCADD)

Chelsea Groton Bank

Annual Meeting
April 17, 2014

Officer Promotions
Margaret H. Blundon, Vice President Marie A. Carmenati, Vice President Dawn M. Day, Vice President Kathryn D. Alves, Assistant Vice President Kelly M. Burke, Assistant Treasurer

New Officers
Michael T. Sheahan, Senior Vice President Ishmael Bryan, Assistant Secretary Michele Magowan, Assistant Secretary Melissa Mercado, Assistant Secretary

Chelsea Groton Bank

Report on Board and Corporator Activities

Chelsea Groton Bank

Ballot No. 2 ELECTION to the BOARD of TRUSTEES for a Three-Year Term ending with the Annual Meeting to be held in 2017 Mary Ellen Jukoski Thomas R. Switz
ELECTION to the BOARD of TRUSTEES for a One-Year Term ending with the Annual Meeting to be held in 2015

Marilynn Malerba

Chelsea Groton Bank

Ballot No. 3 ELECTION of OFFICERS

Agenda


Income Balance Sheet Deposits Loans Investments Capital 2014 Highlights

Income Income

2013 Net Income

$29,046,969 8,632,100 $37,679,069 -$27,867,173 -3,559,414 0 -1,502,433 -$32,929,020 $4,750,049

Interest Income Non-Interest Income Sub-Total

Expense

Non-Interest Expense Interest Expense Loan Loss Provision Income Taxes Sub-Total Net Income

Net Income 2012 vs. 2013

(000s omitted)
$5,000
$4,750

$4,062

17% Increase

$4,000

$3,000
2012 2013

Deposit Growth
(000s omitted)
800,000 700,000

$647,000 $598,000

$683,000

$721,000

$759,000

600,000
500,000 400,000 300,000 200,000 100,000 0

+5%

2009

2010

2011

2012

2013

Deposit Mix
Time 25% DDA 13% NOW 17%

Savings & MM 45%

Cost of Funds
1

0.68

0.71

0.72

0.5

0.43

0
CGB Market Peers CT Mutuals US Mutuals

New London County Deposits

(6/30/13) Market Share 2013 18.4% 17.3% 13.2% 11.3% Market Share 2012 19.1% 16.3% 13.8% 11.1% Offices Citizens 14 14 12 10 10 9 Deposits
(000 omitted)

Change - .7% + 1.0% - .6% + .2%

$783,644 $738,016 $563,173 $482,066

Chelsea Groton
Peoples Dime Bank of America Liberty

$468,677
$457,484

11.0%
10.7%

10.1%
10.7%

+ .9%
NC

Assets
($ in millions)
$1,000
883 932

$800 $600 $400

808
748

836

121

218

242

240

244

+5.5%
592

537

$200 $0
2009

505

507

551

2010

2011

2012

2013

Loans

Investments

Other

Loan Growth
(000s omitted) 600,000

$592,000
590,000 580,000 570,000 560,000

+7.4%

$551,000
550,000

540,000
530,000

2012

2013

Loan Production
(000s omitted) 250,000 230,000 210,000 190,000 170,000 150,000 130,000 110,000 90,000 70,000 50,000

$221,070

$223,762

+1.2%

2012

2013

Loan Portfolio
2% 5% 22%

Residential Mortgage
Commercial Mortgage Commercial Installment

71%

Mortgage Market Share

New London County, CT 2013

Purchase Mortgages Chelsea Groton

Re-Finance

Total

# 136 93
51 30 66 76 27

$ 26,886,000 17,452,036
13,817,291 8,468,063 14,487,912 13,340,962 6,591,783

# 667 808
332 356 404 359 288

$ 90,469,914 94,919,515
65,456,839 69,101,387 56,443,055 52,592,356 56,934,617

# 803 901
383 386 470 435 315

$ 117,355,914 112,371,551
79,274,130 77,569,450 70,930,967 65,933,318 63,526,400

Charter Oak
Wells Fargo Bank of America Citizens Liberty Quicken

Navy Federal
Dime

102
67

23,599,978
10,944,274

223
280

39,570,982
50,092,095

325
347

63,170,960
61,036,369

Net Interest Margin

6.00 4.50
Earning Asset Yield

3.00 1.50 0.00 2009 2010 2011 2012 2013

Cost of Funds Net interest margin

Whats behind the numbers?

Chelsea Groton is an independent, mutually owned, community bank, committed to serving Eastern CT and the surrounding communities. We help our customers safely, simply, and effectively manage their finances, and we help make their long-term goals a reality.

First Time Homebuyer

Jumbo Second Home

Loan Product: CHFA/FHA Property Location: Montville, CT Property Value: $123,000 Loan Amount: $112,750 Downpayment: 3.5%

Loan Product: 30 Year Fixed Jumbo Property Location: Stonington Borough Property Value: $1,800,000 Loan Amount: $650,000 first mortgage $350,000 Home equity line Downpayment: 44%

New Construction

Community Bank Loan

Loan Product: 30 Year Fixed Construction Property Location: Stonington, CT Property Value: $750,000 Loan Amount: $350,000 Downpayment: 53%

Loan Product: 5/1 Adjustable Rate Mortgage Property Location: Groton, CT Property Value: $225,000 Loan Amount: $175,000 Downpayment: 22%

Thames Edge at Fairview

Chelsea Groton Banks borrowing relationship with Odd Fellows dates back to 1988. Most recently the Borrower has received State of CT approvals to add a Continuing Care Retirement Community (CCRC) which will be known as Thames Edge. Three loans were underwritten in August totaling $16,742,000. These funds are being used to refinance existing CGB debt and well as complete construction for this project.

Starbucks

Loan proceeds were used to construct a Starbucks Restaurant on Salem Turnpike in Norwich which opened on July 19, 2013. The Borrower currently leases the building to Starbucks; however, it is scheduled to be sold to another party by the end of September.

Mystic Drawbridge Ice Cream

Mikes Famous Harley Davidson

Tilwell Petroleum

Reliance House

Asset Quality
$20,000,000 $15,000,000

$10,000,000

$5,000,000

$0
4Q2009 4Q2010 4Q2011 4Q2012 4Q2013

NPL

ALLL

Non-Current Loans to Total Loans Peer Data Comparison

2.5

2.06
2

1.68
1.5

1.06
1 0.5

0
Chelsea Groton CT Mutuals US Mutuals

Provision for Bad Debts

(000s omitted)

$4,498

$5,000 $4,000

$2,848

$2,925

$3,000 $2,000 $930 $0 $1,000

$0

2009

2010

2011

2012

2013

Investment Portfolio
As of March 31, 2013 US Agency Corp. Bonds Municipal Bonds Asset Backed Equities CD's Cash

Security US Agency Corp. Bonds Equities

% of Portfolio 53% 17% 10%

Market Value
(In Millions)

$132 42 35

Mun. Bonds
Asset Backed Cert. of Dep. Cash TOTAL

8%
5% 3% 4%

20
13 6 10 $258

Investment Performance
Portfolio Fixed Income Equities 1 Year 0.2% 29.3% 3 Years 3.0% 18.0% 5 Years 3.9% 17.9% 10 Years 3.8% 9.9% Since Inception 5.7% 7.4%

Capital
($ in millions)
$134

$127
$121 $118 $114

2009

2010

2011

2012

2013

Minimum Requirements and Peer Comparison

(% as of 12/31/13)
Minimum

Well Capitalized 5.00

10.00

CGB

Peer Average 10.85

19.27

Tier 1/Total Assets

Total Risk Based

4.00
8.00

14.1
22.5

Financial Services Revenue

$800,000
$700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $0 2009 2010 2011 Fee Income 2012 2013 Percentage Recurring Revenue 25% 20% 40% 35% 30%

50%
45%

Product Mix
Category Total Principal Total Revenue

Mutual Fund Stock Variable Annuity ETF Fixed Annuity

Equity Indexed Annuity REIT Bond Fixed Annuity Municipal Bonds FEE BASED Broker CD Universal Life Term Life Whole Life Variable Life Long Term Care

$12,490,196 $7,995,262 $2,643,478 $1,535,669 $1,180,839

$743,414 $743,091 $329,074 $235,827 $138,660 $39,945 $28,000 $2,663 $2,501 $1,142 $801 $0

$351,559 $41,969 $201,200 $2,117 $22,798

$28,406 $1,077 $3,082 $4,933 $13,616 $39,490 $525 $2,075 $867 $1,185 $16 $1,036

Risks & Concerns

Interest Rate Risk

Fraud/Cyber Security
Regulations/CFPB

Economy

New Programs

New website, online banking, mobile app On-boarding, concierge Refer-A-Friend Management Development Program

1st Time Homebuyers

Document management system 160th Birthday-Acts of Kindness

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25

30

35

40

Re co m m en da tio n Dr ov e By Ot he r

Si nc e Ch ild ho od Ne w sp ap er Co -w or ke r Em pl oy er Di re ct M ai l

Referrals Rank #1 for New Business

Questions?????

Time for cocktails and dinner!