2020 ANNUAL REPORT
feel a tremendous sense of “Iresponsibility for the customers and their 52,000 accounts. They depend on us every day; they don’t think about it, but they depend on us every day to make sure that their transactions flow without problems. The importance of making sure that we were separated and able to continue to function —we have people’s money, and there’s nothing more important than making sure that they have access to their money. That is our job, at its core.” — Andrew Silsby
Andrew E. Silsby, President & CEO
WINTER
DEAR FRIENDS, IN ALL MY YEARS AT KENNEBEC SAVINGS BANK, I HAVE NEVER BEEN MORE PROUD OF OUR ORGANIZATION THAN I HAVE BEEN DURING THIS PAST YEAR. The pandemic not only upended all plans for our 150th anniversary, it changed everything — from finding new ways to work and communicate to redefining daily life. I’m proud to tell you that, thanks to our shared heritage, values, and strong sense of community, we were ready to respond to every challenge 2020 could throw at us.
Time and time again, we pulled together to overcome one challenge, only to find ourselves pivoting to face another unprecedented situation. We started the year off making great plans to celebrate our 150th anniversary… and then the world shifted. In the first weeks of the pandemic, we transitioned 82% of our workforce to work remotely… and then, with the Cares Act, stimulus dollars flowed into accounts and many of our account holders needed access to their money. The market volatility had our Investment Management and Trust area fielding lots of calls. We drafted employees from all departments to help our commercial loan team when the Paycheck Protection Program launched… and then our residential lenders were working around the clock to keep up with a sudden Maine real estate boom. And throughout it all, people were — are — suffering. Restaurant owners and workers, local theaters and live performers, and thousands of families struggling to put food on the table. We continued to do what we could to help. From handing out free turkeys with Augusta
Food Bank food packages, to adapting our Catalyst Grant program into a COVID Relief fund, to giving employees gift cards for local takeout, to using our anniversary party budget to allow employees to give money to local non-profits of their choice, we never stopped looking for ways to help one another get through this difficult year. I’m proud to say we’ve made it through by staying Community Strong. I’ve been amazed at how our employees were able to be nimble and adapt to a shifting landscape. There were endless challenges, where we call upon them to step up and to help out time and time again, and they just did an incredible job. I like to say that, although we’re working apart, as a team we’ve never been closer. The same goes for our entire community: our customers, business partners, and employees. In spite of everything, it was a better year for the Bank than any of us ever expected. Many of our customers also said the same thing, which is why Kennebec Savings Bank remains Community Strong today, and why we will continue to help our neighbors and customers by being here for them, in whatever ways we can, for whatever lies ahead. Andrew E. Silsby, President & CEO
CUSHNOC BREWING JOINED US IN CELEBRATING OUR 150TH ANNIVERSARY BY CREATING A LIMITED EDITION CRAFT BEER IN OUR HONOR.
1
2
kind of lined “Iupfeelforlikeus tothebestars part of something bigger than ourselves.” — Andrew Silsby
FOR 2020, KENNEBEC SAVINGS BANK’S 150TH ANNIVERSARY YEAR, WE CREATED A BEAUTIFUL COMMEMORATIVE BOOK, WITH GRAND PLANS TO INVITE CUSTOMERS INTO THE BRANCHES TO CHAT WITH THE PRESIDENT AND GET A FREE COPY. ON WHAT WOULD HAVE BEEN THE FIRST OF THESE FRIDAY OPEN HOUSES, COVID-19 FORCED US TO SHUT OUR DOORS TO REGULAR FOOT TRAFFIC IN OUR LOBBIES. We have had a pandemic response plan crafted for more than ten years, but that plan only anticipated a maximum interruption of three weeks by a pandemic; it became immediately clear that, for the survival of the organization and our ability to service our 52,000 accounts, we had to separate.
FROM JUST 2% OF OUR EMPLOYEES WORKING REMOTELY, WE MOVED TO 82% WORKING REMOTELY IN 9 DAYS.
“I’VE BEEN IMPRESSED WITH HOW PEOPLE HAVE WORKED THROUGH THE CHALLENGES. IT’S KIND OF NEAT THAT EVERYONE’S BECOMING MORE MOBILE.” — Laura Farrington, Technical Support Technician
Whether she’s taking phone calls first thing in the morning to help employees with log-ins and technical issues or doing hands-on work setting up desks, laptops, and new docking stations in the branches, Laura Farrington plays a critical role keeping Kennebec Savings Bank employees working without a hitch. She credits the “incredibly resilient and adaptable” staff and her fellow IT team members: “We’re all focused on the same goal: making sure our customers are happy.”
EARLY SPRING
Distancing begins phones open and Community Strong debuts “ANYTHING THAT’S ABOUT THE COMMUNITY IS FOR ME.” — Mark Pierce, Technical Support Supervisor
Lifelong Augusta resident Mark Pierce was new to the world of banking when he joined our IT department last year, but he knew enough about Kennebec Savings Bank to know he’d joined the right team. Having grown up playing sports and now watching his kids, he’s “always seeing the Bank’s signs. Seeing how involved the Bank is in the community, that’s huge for me.”
3
4
5
6
SPRING
PPP Loans the CARES Act
and lending a hand
KSB LENDS A HAND Whether volunteering at the local food bank, serving on a nonprofit board, running in a benefit 5k, or giving a portion of their paycheck to the United Way, our employees take an active role in helping our community thrive. To give their efforts a boost, we launched the KSB Lends a Hand program, providing every employee the opportunity to allocate $150 to the nonprofit organization of their choice.
SIXTY-SEVEN ORGANIZATIONS RECEIVED DONATIONS, INCLUDING: - Kennebec Valley Humane Society - The Children’s Center - Alfond Youth & Community Center - Bridging the Gap - Greater Waterville Area Food Bank
BEFORE 2020, KENNEBEC SAVINGS BANK OCCASIONALLY USED THE SMALL BUSINESS ADMINISTRATION, BUT WITH THE PAYCHECK PROTECTION PROGRAM, THAT ALL CHANGED. We had an opportunity to provide input in drafting the language that created the Small Business Administration (SBA) Paycheck Protection Program (PPP), but we had to apply to the SBA to be a PPP lender when the program launched — a feat accomplished in less than 48 hours. Then our programmers had to get to work programming software and updating websites to be able to take these applications, close, and fund these loans, 100% electronically. It was a case of “flying a plane at 200 miles an hour while building it.” the Commercial Loan department grew from 10 to 38 people, with employees from all departments brought on board to lend their applicable skills to the task at hand. Why did we do it? Because we knew our business community was hurting, and we wanted – needed – to help.
IN JUST A FEW SHORT MONTHS, WE PROCESSED OVER 650 PPP LOANS FOR A TOTAL OF $57 MILLION. NEARLY 6,500 JOBS WERE SAVED BY THIS EFFORT.
Customers were “anxious, nervous, but very understanding,” according to Vice President and Deposit Operations Officer Jessica Norton, “BUT OUR CUSTOMERS ARE SO GOOD, THEY MAKE IT EASY.” She also credits her team with stepping up to turn the challenges into opportunities. “The past year was empowering to a lot of our employees — it gave them a chance to spread their wings and fly. And it has catapulted advances in technology like paperless and electronic signatures. I’m proud we didn’t use the pandemic as an excuse — we’ve actually made strong advances.”
— Jessica Norton, Vice President & Deposit Operations Officer
It was scary, but it was also “exhilarating. There were problems to be solved. Endless challenges we had never experienced before. In a single week we opened 167 checking accounts, all electronically. We wouldn’t have been able to accomplish that over several years before, and we ended up being able to do it in just a couple of weeks.” — Andrew Silsby
March 19, 2020 was our official “150th anniversary and we had big party plans, but when we couldn’t hold them, we decided to take the money we were going to use to celebrate and have employees each pick a nonprofit of their choice for the Bank to send a donation of $150. We were helping nonprofits and at the same time involving our employees in telling us what was important to them.” — Andrew Silsby
WHO WOULD HAVE EXPECTED, WHEN THE PANDEMIC BEGAN, THAT MAINE WOULD EXPERIENCE A HOUSING BOOM? With warmer temperatures and record-low mortgage rates, Maine suddenly became one of the most popular real estate markets in the country, putting the spotlight on our Residential Loan department. Over the summer, home loan pre-approvals skyrocketed from what is usually around 50 in process to over 250, as people desperately looked for housing inventory.
OUR CATALYST GRANT PROGRAM BECAME THE CATALYST GRANT PROGRAM —COVID RELIEF EDITION. Normally granted to organizations for growth and expansion, we restyled our Catalyst Grant to help local nonprofits weather the economic uncertainties of the pandemic. Ten different nonprofit organizations were awarded $10,000 worth of COVID relief to help them continue to fulfill their missions during the pandemic. • Educare Central Maine • Boys & Girls Club of Augusta • Kennebec Behavioral Health • Neighbors Driving Neighbors • Freeport Community Services
• Family Violence Project • Kennebec Valley YMCA • Boys and Girls Clubs of Kennebec Valley • Spectrum Generations • Maine Children’s Home for Little Wanderers
AT THE SAME TIME, RECORD NUMBERS OF FAMILIES WERE TURNING UP AT FOOD PANTRIES AROUND MAINE. Inspired by a fundraising effort by two Freeport Middle School students, we donated $2,500 to each of five local food pantries, which was used to purchase gift cards from local restaurants and given to families in need.
SUMMER
A housing boom COVID relief funds and supporting our neighbors
KSB EATS LOCAL KICKS OFF KSB Eats Local was created as a way for the Bank to help our restaurant community and show our appreciation for our staff ’s hard work by giving every employee an extra $100 with every paycheck — with specific instructions to go spend that on local takeout food.
7
8
9
10
FALL
Supporting theaters feeding families and funding local nonprofits
WHEN THE AUGUSTA FOOD BANK GOT A GRANT FROM THE USDA’S FARMERS TO FAMILIES FOOD BOX PROGRAM TO DISTRIBUTE 2,400 FREE BOXES OF FOOD ON OCTOBER 29, 2020, KENNEBEC SAVINGS BANK PARTNERED WITH HANNAFORD TO ADD FROZEN TURKEYS. It was the third time in 2020 the food bank had been able to offer free food to Maine residents regardless of income, and the response caused a traffic jam as people came from far and wide. Several KSB employees spent their day working alongside the Augusta Food Bank staff to distribute the boxes. More wanted to help, but couldn’t get there because of the traffic jam.
AS THE PANDEMIC CONTINUED, IT BECAME CLEAR THAT SOME PARTS OF THE ECONOMY WERE HURTING WORSE THAN OTHERS. After a virtual economic summit by the Federal Reserve identified the arts community as being among the hardest hit, our response was to create the KSB Supports Local Theaters Program. Five $12,000 COVID relief grants were awarded to the Theater at Monmouth, Augusta Colonial Theater, Johnson Hall of Gardiner, Waterville Opera House, and the Maine State Music Theatre. For Tamsen Brooke Warner, the Waterville Opera House’s Executive Director, the grant proves the strength of the arts community: “This year has brought intense hardship for performing arts venues, artists, and entertainment professionals worldwide. Thanks to the support from Kennebec Savings Bank and the kindness of our patrons, donors, and sponsors, we will survive the COVID-19 pandemic and continue bringing great music and theatre to Central Maine.”
STAYING STRONG AS THE NEED CONTINUES As the cold winter weather began to set in, KSB donated $10,000 to the Waterville Area Soup Kitchen (WASK) to assist in start-up costs. In partnership with St. Mark’s Episcopal Church, WASK provides hot nutritious meals from four accessible locations throughout Waterville. According to Aline Poulin, President of the Waterville Area Soup Kitchen: “The generous donation from Kennebec Savings Bank will allow us to concentrate more on the quality of our services without having to worry about where the funding to cover next month’s distribution to those in need will come from.”
if things go wrong “—I’mbutresponsible at the same time, I get a lot of credit for the good that happens. But every business owner or leader will tell you, it’s your employees that make your business, so take good care of them and they will take good care of the customers.” — Andrew Silsby
BOARD OF DIRECTORS Although much remains unclear “after a tumultuous year, one thing remains certain: this financial institution you rely on is financially strong and well capitalized, ensuring we are more than ready for whatever 2021 and beyond brings us.”
Bill Sprague, Chairman Norman S. Elvin Mary A. Denison
Charles W. Hays, Jr., Vice Chairman Amy P. Tardiff Mark L. Johnston
— Andrew Silsby Andrew E. Silsby, Clerk Diane F. Hasting Douglas E. Reinhardt
KENNEBEC FEDERAL SAVINGS MERGER • MARCH 2021 We are proud to welcome Waterville’s Kennebec Federal Savings to our family. As we finalize our merger with an outstanding community bank that has been serving the people of Waterville for nearly a century, we look forward to offering more of the great service, products, and convenient locations that keep us locally focused and Community Strong, now and into the future.
11
Financially strong Community Strong securing the future
SAFETY AND SECURITY, GUARANTEED — YOUR MONEY IS SAFEST IN AN FDIC-INSURED INSTITUTION Five-star rated — Kennebec Savings Bank is among only 4% of banks in the country to have received Bauer Financial, Inc.’s five-star rating as a superior institution for 120 consecutive quarters (30 straight years). • Best Community Bank & Best Mortgage Company (Market Surveys of America in Augusta and Waterville) • Forbes Best-In-State Bank in Maine • Best of the Best (Kennebec Journal) • Bauer Financial 5-Star Rating
12
Corporators P. Nicholas Alberding James W. Bass Laura J. Benedict Brian S. Berry John D. Blouin Nona O. Boyink Michelle A. Bragg Christine M. Brawn Amos M. Byron Jessica J. Clark Gail P. Conley David A. Cosgrove Philip W. Davidson Cathy A. DeMerchant Mary A. Denison Steven E. Diaz, MD George W. Diplock, Jr. Katie L. Doherty Daniel J. Dubord Timothy M. Dunham Jordanne Dunn, DMD Matthew W. Dwyer Norman S. Elvin Edward J. Fabian, III John V. Finnegan Mark A. Ford Michael J. Fortin Scott D. Fossett Sarah P. Fuller Phyllis Gardiner Craig J. Garofalo Debra A. Getchell David A. Grenier Daren S. Hachey Brent L. Hall Gary L. Hammond Donn E. Harriman Diane F. Hastings Charles W. Hays, Jr. Bradley A. Hendrickson
William S. Hill Charles L. Hippler III Kathleen B. Hounsell Jeffrey E. Hubert Jennifer L. Johnson Mark L. Johnston Roger J. Katz Earle R. Kenney Patricia P. Ladd Donald O. Lagace, Jr. James R. Lagasse Joseph M. Lajoie R. Howard Lake James S. LaLiberty Gary Lapierre Alison A. Lorenz Andrew B. MacLean Abigail B. Manter Robert M. Marden Walter F. McKee Robert M. Moore Stacey L. Morrison L. Michael Murphy Lisa M. Newell Anita M. Nored Mary Kathleen O’Halloran Tobias R. Parkhurst Gary R. Peachey Daniel S. Petersen Gregory R. Piper Donald J. Plourde Matthew G. Pouliot Douglas E. Reinhardt David J. Roy Andrew E. Silsby William W. Sprague, Jr. Ingrid L. Stanchfield D. Mark Stebbins Paul D. Stein Barton J. Stevens Robin M. Struck Amy P. Tardiff
Jonathan R. Tardiff Eben A. Thomas Katie C. Vickers Matthew L. Walters Thomas G. Warren Tracy L. Warren P. Kevin Wellenius Dennis S. Wheelock Stephen J. Wood Courtney E. Yeager
Honorary Corporators Stephen W. Albison Cecile A. Bouffard Leo W. Caron Richard A. Coleman Maurice G. Fortin Thomas E. Foster Carole T. Fryover Moira H. Fuller Robert C. Hutchinson Dr. H. Winston Kipp Warren C. Kessler Peter E. Meulendyk Mary L. Morrison Leo J. Murphy Michael A. Napolitano, Jr. Richard D. O’Connor Raymond D. Pepin Carolyn B. Perry Reginald E. Perry William H. Perry Jack D. Smart Susan S. Thomas Peter G. Thompson Thomas A. Trafton Leo J. Violette Sumner A. Webber, Sr. Dorothy S. Weeks
Kennebec Savings Bank Officers Andrew E. Silsby, President & Chief Executive Officer Craig J. Garofalo, Executive Vice President, Chief Operating Officer & Chief Loan Officer Christine M. Brawn, Senior Vice President & Chief Human Resources Officer Debra A. Getchell, Senior Vice President, Chief Financial Officer & Treasurer David A. Grenier, Senior Vice President & Chief Commercial Banking Officer Anita M. Nored, Senior Vice President & Chief Retail Banking Officer David J. Roy, Senior Vice President & Chief Risk Officer Kevin T. Dono, Senior Vice President & Senior Operations Officer Gail P. Conley, Regional Vice President & Director of Investment Services David M. Eldridge, Regional Vice President & Commercial Banking Officer William S. Hill, Regional Vice President & Loan Officer Amos M. Byron, Vice President & Trust Officer Matthew W. Dwyer, Vice President & Loan Officer Brent L. Hall, Vice President & Commercial Banking Officer James R. Lagasse, Vice President & Information Security Officer Gary Lapierre, Vice President & Loan Officer Jessica J. Norton, Vice President & Deposit Operations Officer Nicolas G. Patenaude, Vice President & Assistant Treasurer Michelle L. Richardson, Vice President & Director of Lending Operations Angela B. Robbin, Vice President & Regulatory Counsel, CRA & Compliance Officer D. Mark Stebbins, Vice President & Senior Credit and Appraisal Analyst Katie C. Vickers, Vice President & Commercial Services Manager Tracy L. Warren, Vice President & Loan Officer Julie A. Armstrong, Assistant Vice President & Branch Manager Erin N. Bechard, Assistant Vice President & BSA Officer Amanda L. Cooley, Assistant Vice President & Community Engagement Officer Tracy L. Farrell, Assistant Vice President & Loan Officer Carol L. Payne, Assistant Vice President & Vendor Management and Security Officer Jennifer L. Bechard, Human Resources Managing Officer Mary A. Hammond, Human Resources Officer Tamara R. Hillman-Tardiff, Loan Officer Heather O. Knowles, Controller Jessica M. Reynolds, Branch Manager & Loan Officer Anthony W. Rhoades, Loan Officer Travis N. Rowell, Branch Manager & Loan Officer Lydia M. Tuttle, Collections Officer
13
Kennebec Savings, MHC, Parent of Kennebec Savings Bank Consolidated Summary Balance Sheet & Consolidated Summary Statement of Income
Assets
Cash and Cash Equivalents U.S. Government and Agencies Other Bonds Corporate Stock Real Estate Loans Commercial Loans Other Loans Allowance for Loan Losses Bank Premises and Equipment Other Assets Total Assets Liabilities & Capital Checking Deposits Savings Deposits Certificates of Deposit Other Retail Funding Wholesale Funding Other Liabilities Equity Capital Total Liabilities and Capital
Year Ended
Year Ended
12/31/20
12/31/19
Statement of Income
$10,850,330
$6,552,265
Interest on Loans
78,943,457
68,687,025
Interest and Dividends on Investments
11,494,823
18,578,490
62,692,898
55,050,187
730,633,025
9,463,052
9,603,003
Year Ended 12/31/20
Year Ended 12/31/19
$44,007,715
$41,848,658
Total Interest Income
48,040,227
46,233,958
705,437,913
Interest Paid on Deposits
(6,204,789)
307,035,154
264,090,451
Interest Paid on Wholesale Funding
(4,047,670)
(11,831,204)
(7,088,688)
(5,762,001)
(7,892,086) 40,148,141
34,402,754
(2,030,000)
(600,000)
18,034,817
Net Interest Income
18,459,057
16,549,190
18,665,189
$1,238,608,058
$1,159,361,579
12/31/20
12/31/19
Provision for Loan Losses Other Operating Income Security Gains/(Losses) Operating Expenses
$309,103,754
$227,991,414
91,321,698
99,917,085
160,086,430
265,636,686
170,162,319
153,893,718
$1,238,608,058
$1,159,361,579
491,668,036
398,039,205
2,089,427
1,732,344
14,176,394
Total Interest Expense
12,151,127
Earnings Before Income Taxes Income Taxes Net Operating Income
4,032,512
(3,844,416)
3,426,516
857,838
4,385,300
(5,626,415)
4,149,695 1,273,216
(27,486,258)
(25,357,814)
14,916,237
13,867,851
(3,147,103)
(2,861,792)
$11,769,134
$11,006,059
3,710,560
6,709,161
Unrealized Holding Gains/(Losses) on Equity Securities, net of tax Net Income *Unaudited
$15,479,694
$17,715,220
14
AUGUSTA (207) 622-5801 FARMINGDALE (207) 588-5801 FREEPORT (207) 865-1550 WATERVILLE (207) 872-5563 WINTHROP (207) 377-5801 WWW.KENNEBECSAVINGS.BANK