March 2024

Dear Friends,

In 2023, we again stepped up to challenge and finished the year in solid condition.  Instability on the national banking scene – dramatized by the failures and regulatory takeovers of Silicon Valley Bank, Signature Bank, and First Republic Bank during the first half of the year – had ripple effects throughout the sector.  Northfield Savings Bank responded by assuring customers of our strengths and by being proactive in providing multiple options for depositors to ensure balances were federally insured.  In its efforts to contain and reduce inflation, the Federal Reserve continued to raise interest rates, with four additional hikes through July.  The rapid escalation beginning in March 2022 resulted in a rise of 5.25% over a 16-month period.  Rates at the shorter end of the yield curve exceeded those at the longer end, making it more expensive for households and enterprises to borrow money and for financial institutions of all sizes to fund their asset commitments with deposits and other sources.  The effect was a drop in our net interest margin, the primary driver of net interest income and overall earnings.  Despite these headwinds, NSB executed our strategic initiatives and fully met expectations of our customers and communities, highlighted by us earning for a second year running “Best Bank Statewide” in the annual Vermont Business Magazine “Best of Business” readership survey.

2023 Financial Summary

The company finished the year at $1.505 billion in assets, a 6.5% rise over the prior year.  Net loans grew 7.1% to $1.031 billion.  Deposits and other local funding declined less than 1% year-over-year, finishing at $1.268 billion.  With a 0.46% year-over-year decline in net interest margin, earnings fell to $3.2 million.  During the final quarter of the year, we were successful in exiting the defined benefit pension program by transitioning commitments to a reputable third party at a one-time plan withdrawal cost of $1.2 million. Equity capital rose 10.9% to $126.4 million.  Tangible and regulatory equity ratios remain strong, as does overall asset quality.

Untamed Waters

Federal monetary policy was not the only force of consequence in 2023.  Hydraulics kicked in July 10, devastating Montpelier, Barre, and other river towns in Vermont.  We lost our State Street office in Montpelier (NSB’s largest) to flooding and were closed at our Barre Main Street office for a week.  Our team and customers remained resilient as we got to work installing a temporary branch in the Capitol Plaza parking lot, opening in late August.  In keeping with our commitment to downtowns throughout our service area, we have been under construction in our State Street space, building in some future remediation.  We will move back in early spring.

Enterprise24

Since our move beyond pandemic mode in mid-2021, we have been guided by our Enterprise24 strategic plan.  All initiatives in four of the six themes noted in last year’s report were completed within the original 30-month plan window concluding December 31, 2023.  Two themes – Enterprise Market Development and Information Technology Strategic Plan – were deemed by our Board worthy of extending 12 months through 2024 to allow several promising projects to be fully executed.  We are methodically asserting ourselves as Vermont’s preeminent bank for enterprise.  Our fortified value proposition is gaining new relationships as more and more businesses, firms, practices, non-profits, local governments, and institutions determine that Northfield Savings Bank delivers.  On the technology front, we have been building a 21st century backbone for a decade, beginning with the opening of our state-of-art Operations Center in 2015.  The work we will be completing in 2024 will realize the scale and efficiency that gives us parity with larger players.  These two themes are vital to our return to the financial trajectory we had been enjoying prior to 2023 and the advancement of our 157-year-old independent mutual bank stature.

2023 Financial Overview

Committed to Community

As a mutual institution, we are committed to our customers and the communities where we live and work. Our major donations to local non-profits exemplify this commitment in action, supporting the Vermont communities we serve, year after year. In 2023, Northfield Savings Bank contributed $350,000 to more than 100 community organizations in Vermont.

Leadership

Northfield Mutual Holding Company

Directors

John T. Burke
Nicole M. Carignan
Kyle Dodson
Brian Eagan
Jon Jamieson
Thomas S. Leavitt
John Lyon - Vice Chair
Mary Alice McKenzie - Chair
Thomas Robbins
Mark Saba
Kerin Stackpole

Officers

Thomas S. Leavitt
President
Cory B. Richardson
Treasurer
Amy Turosak
Corporate Secretary

Corporators

Indra J. Acharya
Belan Antensaye
Kim Bolduc
John T. Burke
Lilli Cain
Nicole M. Carignan
Laura Carlsmith
H. Wright Caswell
Stephanie T. Clarke
Edward Corrigan
Michael C. Diender
Kyle Dodson
Dr. Nadia A. DuBose
Brian Eagan
Ted Elzey
Jennifer Emens-Butler
Dolly Fleming
Yael Friedman
Karen Galfetti Zecchinelli
John Grenier
John J. Handy
Jeffrey Harkness
Brian Harwood
Katie Hawley
Wanda Heading-Grant
Jon Jamieson
Scott Johnstone
Fletcher Brian Joslin
Lisa L. Keysar
Travis J. Kingsbury
Susan M. Klein
Rob Korrow
Jeff LaBonte
Mike Lajeunesse
Jeffrey Larkin
Sean Lawson
Thomas S. Leavitt
Kevin Lord
Steven Loyer
John Lyon
Owiso Makuku
Mary Alice McKenzie
Sue Minter
Eva M. Morse
Allyson Myers
Bob Nelson
Jeffrey Nick
Chris Noyes
W. Dan Noyes
Adam Osha
Nancy Owens
Marissa Parisi
Keith Paxman
Deborah A. Phillips
Roberto J. Pierre
Dave Pocius
Nancy Pope
Sarah Richards
Thomas Robbins
Sandy Rousse
Mark Saba
Leslie Sanborn
Liz Schlegel
RADM Richard Schneider USCGR (Ret)
Matt Schrag
Steven Shea
Heather F. Shouldice
Kerin Stackpole
Frances Stoddard
Philip T. Sussman
Wallace W. Tapia
David J. Whaley
James H. Wick
Lauren D. Wobby
Nancy F. Zorn

Northfield Savings Bank

Officers