XII. e Mortgage Boom and Advances in Technology

e Mortgage Boom and Advances in Technology

Kennebec Savings Bank completed a major website redesign in 2005, which provided customers with more information and a fresh new look.

Our Bank

In 2001, the Bank launched an online mortgage center with 24-hour access to rates, mortgage calculators and loan applications. It also began o ering educational events for rst-time homebuyers.

2002 marked the launch of the KSB Anytime internet banking platform. In less than six months, more than 1,000 customers had logged on to the new, real time and online service.

e Bank’s growth was enhanced by the lowest prime lending rate since May 1959 and the lowest mortgage rates in 40 years. Customers took advantage in record numbers, resulting in more than 1,000 new mortgage loans. e total number of households using the Bank for services was approximately 14,000.

e Investment and Trust Services Department also hosted its First Annual Autumn Social, and more than 200 people attended.

In 2003, the prime lending rate dipped even lower. e Bank streamlined its lending process resulting in 1,158 new mortgage accounts and making customers’ dreams of owning a home a reality.

Kennebec Savings Bank upgraded its Bank by Phone system in 2004, providing customers with the ability to obtain even more information about their accounts through the service.

e Investment and Trust Services Department also experienced signi cant growth that year, with investments in the Bank’s care rising to more than $18 million. In total, Kennebec Savings Bank closed out the year with almost $472 million in assets, making it one of the strongest banks in Maine.

e Bank upgraded its telephone banking system in 2004, allowing bank-by-phone customers to obtain more information than ever on their accounts. at same year, Kennebec Savings Bank was named the Best Place to Do Banking in the Greater Augusta Area in a yearly survey conducted by Market Surveys.

2005 was another highly successful year for Kennebec Savings Bank. e Bank continued to focus on technology upgrades to provide its customers with the easiest, most e cient and worry-free banking experience possible. First, it upgraded all its ATMs and became

ATMS UPGRADED

In 2005, Kennebec Savings Bank became one of the first institutions in the country to offer its customers the bank-wide ability to deposit cash and checks without envelopes via ATM.

The Bank acquired and demolished property adjacent to the Waterville location in 2007 to create more green space around the branch.

one of the rst nancial institutions in the country to o er its customers the bank-wide ability to deposit cash and checks without envelopes via ATM. Internet banking and bill payment services were dramatically improved, nearly doubling the number of customers using the technology as a result. A new website with increased capabilities, more information about the Bank, and a fresh look was also unveiled.

Also in 2005, Kennebec Savings Bank received a superior 5-star rating by nationally recognized nancial analysis rm BauerFinancial, Inc. for maintaining a superior rating for the past 64 consecutive quarters (16 years). According to BauerFinancial, Inc., only 7.6 percent of all nancial institutions in the entire country had ever achieved a ve-plus star designation for that long of a consecutive time period of that length.

2006 marked the opening of the rst-ever Manchester electronic banking center, and a major construction project in Waterville expanded the branch by 12,000 square feet. e third oor of the Augusta branch was also redeveloped to house the growing Investment and Trust Services Department. At 9 Western Avenue, next door to the Augusta branch, the Capitol City Motel was demolished to make way for green space and more parking.

Continuing with its leading edge approach when it comes to technology, the Bank converted to high-speed ber optics and became one of the rst in Maine to implement two-factor authentication for internet banking security, which used a unique matrix to con rm the customer’s identity.

1 2 3 4 5 A 4 6 4 7 7 B 2 7 6 4 4 C 7 2 8 7 1 D 2 5 9 0 9 E 5 1 8 1 8 F 1 7 6 3 7 G 9 4 1 9 7 H 7 1 2 7 0 Card Code: 5064

This matrix card was used to implement two-factor authentication for internet banking, which provided customers with additional security.

Opposite: The Waterville branch is located on Main Street and features large green spaces and flowerbeds.

2006 was also a big year for awards. Kennebec Savings Bank took home two national awards, one from the Independent Community Bankers of America and another from the American Lung Association. It earned local recognition from the Town of Manchester, the United Way of Kennebec Valley and the United Way of Mid-Maine.

Real-time transaction updating was introduced in 2007, adding another layer of bene t for Kennebec Savings Bank customers. e Bank also acquired new property on Waterville’s Main Street to create more green space around the branch for all to enjoy.

e Bank earned three more awards, as well. It received a Bike Friendly Business Award from the Bicycle Coalition of Maine and a Best Places to Work in Maine award, in addition to being named Business of the Year by the Mid-Maine Chamber of Commerce.

In 2008, the recession hit. In a year lled with uncertainty, Kennebec Savings Bank served as a safe haven for its customers. While other banks were forced to close or merge, it was business as usual. e Bank even saw growth despite the worst economic downturn in many years, attracting 2,300 new customers. rough a very successful ad campaign, the Bank was seen as a safe haven for people’s money during this time of great uncertainty.

Left: Kennebec Savings Bank opened a second KSB Anytime Electronic Banking Center in the lobby of the Augusta office in 2008.

ough mortgage activity was low in Maine and nationally, Kennebec Savings Bank still recorded $83 million in new mortgage business, representing 20 percent of all mortgages granted in Kennebec County that year.

e Bank also expanded, opening a second KSB Anytime 24-hour Electronic Banking Center in the lobby of the Augusta o ce.

Technological advancements continued to exceed the pace of customers’ demands. Nearly a million transactions were processed through ATMs, bank by phone, and internet banking—a considerable increase over past years.

Kennebec Savings Bank expanded its real estate holdings, as well. e Bank nalized the purchase of a new property on Augusta’s Civic Center Drive in addition to properties in Waterville including a few parcels that were converted into more lovely green spaces for the community.

Kennebec Wealth Management

Securities offered through LPL Financial

Member FINRA & SIPC The Bank began providing services in a new town when it opened an electronic banking center in Manchester in 2006.

Another big development that year was the beginning of Kennebec Wealth Management. e new division was created to enhance the o erings of the eight-year-old Investment and Trust Services Department. Despite very unfavorable market conditions, it added $7.7 million in new money and 20 new accounts to its wealth management area in 2008.

Mainebiz ranked Kennebec Savings Bank 11th out of 31 banks statewide in terms of asset size, and the Bank continued to maintain its 5-star rating from BauerFinancial, Inc., a distinction it now had held for 18 consecutive years and one only six percent of institutions nationwide could claim.

e Bank had $407 million in deposits at the end of 2008. By the end of 2009, that gure had grown to $462 million, representing a growth rate of almost 13.5 percent, double from the previous year.

Kennebec Savings Bank also launched its Safe, Secure and Stable promotion in 2009, resulting in a record number of new checking and savings accounts being opened. By year’s end, the Bank had 2,061 new customers and opened more than 6,700 new accounts.

e Bank helped customers purchase or build 974 new homes that year, representing more than $92 million—and it proved to be one of the best mortgage lenders out there. According to the Mortgage Bankers Association’s National Delinquency Survey, the national delinquency rate for mortgage loans on one- to four-unit residential properties in 2009 rose to an adjusted rate of 9.64 percent at the end of the third quarter. But at Kennebec Savings Bank, the delinquency rate was only .82 percent, the result of good underwriting and exceptional collection management by the Kennebec Savings Bank team and a strong customer base committed to home ownership.

Opposite: Through teamwork and tenacity, the Gardiner branch was opened in just 52 days in 2009.

A Safe Haven for Your Money

If you’ve been watching the news over the past several days, you are probably well aware of the turmoil in the financial services industry which is causing depositor concerns across the country, including right here in Maine.

In fact, I’ve had a few calls from customers who are concerned about the safety of their deposits here at Kennebec Savings Bank. I tell them that there’s really no safer place to keep their money. We are financially strong, and very well capitalized! And, for the past 18 years (74 consecutive quarters), we have received Bauer Financial’s five-star rating as a superior financial institution, a distinction held by only 5.7% of banks in the country! (www.bauerfinancial.com)

Our customers should have no concerns about funds that they have on deposit at KSB. They should, however, have concerns about any uninsured deposits that they have at other financial institutions, particularly ones with whom they are not well acquainted. It is certainly no time to be sending money to banks they’ve never heard of just because they are paying a high rate of interest.

We are, in fact, a safe haven for your money. If you’re not a customer, now is a great time to experience the KSB difference.

Mark L. Johnston President Kennebec Savings Bank

Augusta 622-5801 • Waterville 872-5563 • Winthrop 377-5801

www.kennebecsavings.com

THE GREAT RECESSION

In response to uncertainty in the midst of the recession of the mid 2000s, the Bank ran an ad campaign aimed at easing depositor concerns.

Our People

Kennebec Savings Bank continued to expand its presence in the region, and the team continued to grow. In 2009, teamwork and tenacity got the new Gardiner branch up and running in an incredible 52 days from concept to opening day. e Bank now had 92 employees, including an additional ve hired that year to further develop the thriving Kennebec Wealth Management division.

Kennebec Savings Bank started KSB Striders in 2002, a program that encouraged employees to walk their way to better health. In that inaugural year, 50 employees logged more than 5,700 miles on their road to tness.

In 2003, two long-time Bank employees retired: Vice President & Loan O cer omas A. Trafton with more than 22 years of lending at the Bank, and Assistant Vice President & Accounting/Operations Manager Elaine E. Wardwell with 26 years of service.

Ray Pepin retired from the Board in 2003. He had previously retired as Bank president in 1993. Longtime Kennebec Savings Bank trustee Donald “Peanut” Rodrigue retired from the Board in 2005. He had served as a corporator since 1983 and a trustee since 1984. Andrew Silsby was promoted from senior vice president and treasurer to executive vice president and treasurer in 2008, while Bank President Mark Johnson received the town of Manchester’s Spirit of America award. He was also named to the Independent Community Bankers Association’s national board of directors.

Kennebec Savings Bank hired, promoted and relocated current employees to staff the new Gardiner branch. Left to right are Tracy Plourde, Brent Hall, Amanda Spearin, Kristi Lamoreau, Carol Bockman and Patty Coan.

Assistant Vice President & Accounting/ Operations Manager Elaine E. Wardwell retired in 2003 after 26 years at the Bank.

Ray Pepin served as president of Kennebec Savings Bank from 1980 to 1993, but remained on the Board of Directors until 2003. During his presidency, the Bank acquired the Tappan-Viles Mansion and installed the Bank’s first in-house computer system. Donald “Peanut” Rodrigue, a longtime trustee, retired after 31 years of service to the Board of Directors.

Vice President & Loan Officer Tom Trafton retired in 2003 after 22 years of service to the Bank.