Bank the change you want to see.

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2 Bank the change you want to see.

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4 b corp Community First Since 1899 For Mascoma Bank becoming a B Corp was a natural extension of what we have always been a bank chartered to serve the needs of our communities. Now, we will take that commitment even further. As a Certified Benefit Corporation: We strive to be a force for positive change, creating benefit for all our stakeholders not just shareholders. We conduct business knowing that people and place matter, aspiring both to do no harm and to benefit all. We recognize our INTERdependence, because we are dependent on and responsible for each other as well as future generations. We are not just any other bank, and we will continue to change and grow to better serve the world around us. We are not afraid to do things differently and we constantly strive to do things better. We make the change we seek happen and we invite everyone to be part of this future. Mascoma Bank has always been different by design. It s been set up for our communities and our customers. That gives us a lot of latitude to focus on the return to our broad range of constituents versus the return to a group of investors. Clay Adams President Mascoma Bank

5 2017 BY THE NUMBERS 5,200 VOLUNTEER HOURS THANKS TO NEW POLICIES CODIFIED IN 2017, WE ARE GIVING OUR TEAM MEMBERS A TOTAL OF 5,200 HOURS TO VOLUNTEER IN THE COMMUNITY IN Josh Allen Agile Coach Maureen Labonte Product Manager, Compliance and Loans

6 b corp Making a Positive Impact 1,892 kw OF SOLAR POWER Our new solar loan program has already enabled the installation of 1,892 kw of new solar generation for local homes. 77% GROW AND LEARN 77% of our team members report that in 2017, Mascoma Bank provided them with the opportunity to learn and grow at work. $5.5 MILLION+ 70% WOMEN 70% of our team members are female. 10% TO PHILANTHROPY The annual budget for giving from the Bank is based on 10.06% of budgeted pre-tax income. As the Bank grows and prospers, so does the amount of money we infuse directly into the community. B IMPACT REPORT Certified Since June 2017 Company Score Median Score SUPPORT FOR NONPROFITS In the past five years, we have been able to support nonprofits and communities through direct and subsidized programs, as well as grants from the Mascoma Bank Foundation we view this as a core part of our mission. $41.9 MILLION IN NEW MARKETS TAX CREDITS Mascoma Community Development deployed $41.9 million in New Markets Tax Credits, which supported 7 projects that created 72 full time and 541 temporary jobs. ENVIRONMENT 6 7 WORKERS CUSTOMERS 20 N/A COMMUNITY GOVERNANCE 20 6 OVERALL RATING

7 2017 BY THE NUMBERS 1,024 HOME LOANS THERE IS NOTHING MORE CENTRAL TO OUR MISSION THAN HELPING PEOPLE BUY, OR IMPROVE THEIR HOME. Eric Hemond Woodstock, Vermont

8 impact Dedicating Time and Resources For nearly 30 years, Mascoma Bank has been supporting the work of the AVA Gallery and Art Center in Lebanon, New Hampshire. AVA is dedicated to promoting the visual arts through exhibitions and educational programs that nurture, support, and challenge New England artists, and to providing art classes for children, teens, and adults of all levels and abilities. AVA s programs including special events that foster interaction among artists, patrons of the arts, and the community, and which emphasize sustainability are dedicated to recognizing the ways in which art enriches our lives. In the past year, we have been proud to support many projects, including the Bente Torjursen West Sculptural Studies Building, a 4,000-square-foot, customdesigned addition that is both energy efficient and environmentally sustainable. This building provides a new home for their stone carving studio; a woodworking studio; a hot studio for metalworking, metal and glass forging, welding, and encaustics; a core studio of workbenches and ceramics stations; an outdoor patio/studio; as well as a green roof sculpture garden. Mascoma Bank is also a perennial supporter of a broad range of exhibitions at AVA, including the annual Best of Upper Valley High School Exhibition. The long-term support from Mascoma Bank means so much to AVA and our arts community. It allows us to keep moving forward, engaging more people every year. Trip Anderson AVA Executive Director

9 PHOTOS BY: FAR LEFT; GARY HALL. THIS PAGE: MICHAEL SEAMANS 2017 BY THE NUMBERS $1.5 MILLION SUPPORT FOR NONPROFITS THIS 2017 SUPPORT FROM MASCOMA BANK INCLUDES DIRECT AND SUBSIDIZED PROGRAMS, AS WELL AS GRANTS FROM THE MASCOMA BANK FOUNDATION.

10 ommunity Strengthening the Fabric of Each City and Town Since 1965, Keene Housing (originally Keene Housing Authority) has played a vital role in promoting a stronger Monadnock region by providing housing assistance to the community s vulnerable and lowincome populations. Keene Housing believes that the best way to help households is by providing the tools and resources needed to change their lives. Mascoma Bank is honored to be able to support Keene Housing s work by being their bank, assisting with cash management, handling deposits, and helping them find creative solutions to financial challenges. Keene Housing s goals are also very much in line with those of the New Markets Tax Credit programs facilitated through Mascoma Community Development, and we look forward to helping them do even more to further their mission in coming years. In this past year, we have also become the banking partner for the City of Keene. Our staff at the Mascoma Bank Keene Branch, as well as our full municipal services department, provide local support to help the city with its daily cash management and banking needs, as well as helping plan long-term projects. We have one common goal: to support the residents and the community and to continue to make Keene a better place to work and live. Sheila Jacobs Business and Municipal Officer

11 2017 BY THE NUMBERS 93 MUNICIPALITIES WE PROVIDE BANKING SERVICES TO 93 MUNICIPALITIES THROUGHOUT NEW HAMPSHIRE AND VERMONT.

12 partners The Partner We Want Two years ago, our former bank was purchased by a large company. This was my 26th year with West Lebanon Feed & Supply, and we d stayed with the same bank for more than 20 of those years. We don t take change lightly. When we look at changing our practices here, we spend a lot of time researching to ensure we are making the best choice. For us, as with any business, it s really a matter of finding the right partners: the right bank, the right attorney, the right CPA and the bank is at the top of that list. When I look at the basis for our success over the years, it s very much about being local and being involved with our community. To continue to prosper, we need community partners and we found that Mascoma Bank aligned with our values. It was really a no-brainer to reach out to them. We are very confident and truly thrilled that we have a partner like Mascoma. The more time we spent with them, the more we realized that they have so much more to offer us as both a community bank and a community partner. We are very confident and truly thrilled that we have a partner like Mascoma Bank. Curt Jacques Owner West Lebanon Feed & Supply

13 2017 BY THE NUMBERS $249 MILLION COMMERCIAL LOANS WE INVESTED NEARLY A QUARTER OF A BILLION DOLLARS IN OUR LOCAL COMMUNITIES THROUGH BUSINESS LOANS IN 2017 TO FUEL THE ECONOMIC ENGINE OF NORTHERN NEW ENGLAND.

14 people A Focus on Strengthening Our Team Ways in which Mascoma Bank supports team members at every level: Paid volunteer time off Generous benefit packages Average of 7 days professional development programs. Employees receive formal training, including skills-based training, public speaking, work/life balance, and leadership development training. 100 percent of team members have social or environmental mission-related responsibilities or expectations outlined in their job description Access to free banking services, including lowinterest loans and financial planning advice percent of above-entry level positions are filled internally Incentives for health and wellness activities More than 70 percent are women or underrepresented populations The Bank s commitment to our customers and employees provides me with endless engaging and energizing days. At the end of each day, I feel like I ve made a difference somehow, someway and that s pretty special! Chris Morin Chief Risk and Loans Operations Officer I enjoy working at Mascoma Bank because I get the chance to help customers reach their dream in homeownership. Shannon Ebbighausen Loan Production Assistant

15 2017 BY THE NUMBERS 81% BEST EVERY DAY 81% OF OUR TEAM MEMBERS REPORT THAT AT WORK, THEY HAVE THE OPPORTUNITY TO DO WHAT THEY DO BEST EVERY DAY. AND BY ASKING, WE CAN FOCUS ON RAISING THAT NUMBER. Kenneth Wells Senior Vice President, Chief Retail Lending Officer

16 financials U.S. Government Securities and Obligations: $144,793,374 Other Investments: $55,534,666 Commercial Real Estate Loans: $551,775,321 Cash and Cash Equivalents: $21,722,726 Other Assets: $57,907,159 Bank Building and Equipment: $26,040,518 Less: Allowance for Loan Losses: $14,285,185 Consumer and Other Loans: $212,527,897 Total Assets 2017 $1,684,132,800 Residential Real Estate Loans: $628,116,324

17 CONSOLIDATED STATEMENT OF CONDITION ASSETS 12 months ending months ending Cash and Cash Equivalents $21,447,583 21,722,726 U.S. Government Securities and Obligations 133,733, ,793,374 Other Investments 54,377,116 55,534,666 Real Estate Mortgage Loans 1,061,535,624 1,179,891,647 Consumer and Other Loans 206,358, ,527,897 Total Loans 1,267,893,793 1,392,419,543 Less: Allowance for Loan Losses (13,522,238) (14,285,185) Net Loans 1,254,371,555 1,378,134,358 Bank Building and Equipment 25,721,278 26,040,518 Other Assets 59,502,414 57,907,159 TOTAL ASSETS $1,549,153,287 1,684,132,800 LIABILITIES Demand and NOW Deposits $446,033,920 $470,066,499 Savings, Time and Other Deposits 786,098, ,793,194 Total Deposits 1,232,132,138 1,374,859,693 Sweep Accounts 15,552,715 12,292,629 Subordinated Debt 14,602,580 14,702,630 Borrowings 142,295, ,489,209 Total Borrowings 172,451, ,484,467 Other Liabilities 15,630,899 18,644,286 TOTAL LIABILITIES 1,420,214,235 1,545,988,446 CONSOLIDATED INCOME STATEMENT INCOME 12 months ending months ending Interest Income on Loans & Investments 51,073,266 57,753,693 Interest Expense on Deposits & Borrowings 6,599,160 7,960,332 Net Interest Income 44,474,106 49,793,361 Provision for Loan Losses 2,313,000 1,390,000 Net Income After Provision for Loan Losses 42,161,106 48,403,361 Other Non-interest Income (misc fees, overdrafts, service charges) 11,409,403 11,969,281 Gains / (Losses) on Sales of Securities 80,999 33,876 Other Non-interest Expenses (personnel, occupancy, other overhead) 44,727,284 47,151,111 Income Before Income Taxes 8,924,225 13,255,407 Applicable Income Taxes 1,630,220 5,823,049 NET INCOME $7,294,004 $7,432,358

18 board & corporators 2018 BOARD OF DIRECTORS CHAIR Gretchen E. Cherington Meriden, NH VICE CHAIR Frank J. Leibly III Taftsville, VT SECRETARY Deirdre B. Goodrich Norwich, VT Clayton R. Adams Norwich, VT Joel J. Bedor Littleton, NH Timothy C. Briglin Thetford Center, VT Paul B. Gardent Etna, NH Gary W. Gray Westmoreland, NH Daniel P. Jantzen Etna, NH Edward T. Kerrigan Hanover, NH Sara L. Kobylenski North Hartland, VT Barry E. McCabe West Hartford, VT Daniel B. McGee Lebanon, NH Catherine Richmond Norwich, VT CORPORATORS Clayton Adams Norwich, VT Joel Bedor Littleton, NH Jay Boucher Enfield, NH Robert Bowers, Jr. New London, NH Timothy Briglin Thetford Center, VT Melissa Carlson Lyme, NH Gretchen Cherington Meriden, NH Stephen Christy Lebanon, NH Stuart Close Norwich, VT Susan Coburn South Strafford, VT Doug Cooley Windsor, VT Carol Ann Cunningham Woodstock, VT James Damren West Lebanon, NH Lang Durfee Bethel, VT Patti Friedman Lebanon, NH Paul Gardent Etna, NH Joan Goldstein Royalton, VT Deirdre Goodrich Norwich, VT Gary Gray Westmoreland, NH Rebecca Hamilton Gilsom, NH Judy Hayward South Royalton, VT John Hochreiter Etna, NH Katharyn Hoke Elkins, NH Joy Hutchins, Plainfield, NH Daniel Jantzen Etna, NH Meredith Johnson Lebanon, NH Jean Kennedy Plainfield, NH Edward Kerrigan Hanover, NH Sara Kobylenski North Hartland, VT Mary Ann Kristiansen Roxbury, NH Patricia Ladd Chelsea, VT David Laurin White River Junction, VT Frank Leibly III Taftsville, VT Jennifer Levy Norwich, VT Joseph Longacre North Haverhill, NH Peter Mason, M.D. Lebanon, NH Barry McCabe West Hartford, VT Sally McEwen Lebanon, NH Daniel McGee Lebanon, NH Edward McGee, Jr. Canaan, NH Deborah Field McGrath Grantham, NH Virginia McGrody Enfield, NH Robert Meyers Woodstock, VT Katherine Milligan Thetford, VT Margaret Mitchell Canaan, NH Susan Mooney, M.D. Grantham, NH Robert Moses Lebanon, NH Gary Neil Quechee, VT Hildegard Ojibway White River Junction, VT Sonia O Banion Wilder, VT Patricia O Neill Windsor, VT Chester Pasho Hartland, VT Rebecca Powell Enfield, NH Scott Putney Bethel, VT Susan Reeves New London, NH Catherine Richmond Norwich, VT Victor St. Pierre Charlestown, NH Anne Sprague Plainfield, NH Marcos Stafne White River Jct., VT Thomas Terry, O.D. White River Junction, VT Gary Thulander Woodstock, VT Tami Weeks Windsor, VT Todd Winslow Wilder, VT

19 2017 BY THE NUMBERS 38 COMMUNITIES THE MASCOMA BANK CORPORATORS ARE AN EVER-BROADENING GROUP THAT REPRESENT 38 OF THE COMMUNITIES WE SERVE, GIVING US VALUABLE INSIGHT INTO THE NEEDS OF DIFFERENT AREAS. Susan Paterson Relationship Manager

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21 SENIOR LEADERSHIP TEAM Clayton Adams President & CEO Barry McCabe Executive Vice President, Chief Operating Officer Robert Boon Senior Vice President, Wealth Management Kenneth Howe Senior Vice President, Chief Commercial Banking Officer Richard Jennings Senior Vice President, Mascoma Community Development Philip Latvis CEO, Centurion Insurance Group Christine Morin Senior Vice President, Chief Risk and Loan Operations Officer Samantha Pause Senior Vice President, Chief Marketing Officer Raphael Reznek Senior Vice President, Chief Information Officer Donald Thompson Senior Vice President, Chief Financial Officer and Treasurer Kenneth Wells Senior Vice President, Chief Retail Lending Officer Beverly Widger Senior Vice President, Chief Human Resources Officer Scott Young Senior Vice President, Chief Retail Officer leadership From Our Benefit Officer 2017 was a watershed year for Mascoma Bank. In October, we completed our Benefit Corporation certification. This two-year process with the nonprofit group B Lab encouraged us to very consciously examine and consider what we do, why we do it, and how we do it. A key motivation for embarking on the certification process was that becoming a B Corp both perfectly aligned with the principles we ve always followed as a mutual bank and encouraged us to set new, even higher standards to attain. We have always sought to do good in the world, and now we have an annual report card to chart our progress. I am pleased to report that we achieved our goal of creating a public benefit in 2017 through the many initiatives described in this report and the commitment at all levels of the bank to pursuing that purpose. Let s highlight just a few of those aspects now codified at Mascoma Bank. We updated our purchasing policy to encourage the purchasing of environmentally conscious products. We implemented a consumer solar loan that enables home owners to borrow funds to purchase solar equipment with an unsecured, low-rate loan without needing to tap into home equity. We stepped up our monitoring of the indoor environmental air quality of our buildings to ensure a healthy, comfortable workspace for our team members. We added a socially responsible investing option to our team members 401(k) plan. We implemented a Volunteer Time Off program that allows team members to volunteer for local, nonprofit organizations during work hours. Each employee is given 16 hours a year to support their personal efforts to give back. Looking forward, in 2018, we will discover more ways to increase our use of environmentally friendly energy sources at our many locations, and we will establish four impact teams to focus on improving programs and processes in these areas. Our Communities Our Customer Our Team Members The Environment Thank you for allowing us to support you and your community. If you have any questions about Mascoma Bank, please contact me at or Samantha.Pause@ MascomaBank.com Samantha Pause Mascoma Bank Benefit Officer

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