2020 Executive Summary
To our Corporators, Customers, Staff and Other Friends
Since 1852, Bath Savings Institution has been here for our customers and neighbors in good times and bad. We have been through the Civil War, the Great Depression, two World Wars, 9/11 and many other challenging times. 2020 brought a new and unprecedented challenge — the Coronavirus pandemic (COVID-19). This pandemic closed the economy as we tried to limit its spread.
Bath Savings was deemed an essential business, so we found new ways to continue to deliver exceptional service — so our customers would receive that service safely and without exception. We enhanced remote deposit capture. We closed our lobbies but kept our drive-thru areas open. We opened accounts online, over the phone, outside in parking lots and on the hoods of cars. We learned the importance of wearing masks and created Plexiglas barriers for employee interactions with customers. We practiced proper social distancing, used technology to hold virtual meetings, and allowed at-risk employees to work from home.
In the middle of the pandemic, we originated and opened 664 SBA Paycheck Protection Program (PPP) loans providing $42 million in forgivable funds to small businesses to help them and their 5,313 employees survive the pandemic. We opened record numbers of checking accounts as well as record amounts of home mortgage loans and trust relationships. These activities were possible because of the extraordinary efforts of our team, who worked to overcome any obstacle put in their way to continue to deliver exceptional service without exception.
The pandemic has challenged us, but our team rose to the occasion and continued to deliver that exceptional service that has set us apart, as we have done since 1852.
Despite the pandemic, we opened over 2,400 new checking accounts, increasing the balance in these accounts by 31% and ended the year at $458 million. Total deposits grew to $900 million, as customers continued to turn to Bath Savings to provide safe and convenient access to their funds.
With interest rates falling to historic lows, Bath Savings provided loans to consumers and businesses across our markets. In 2020, the bank originated nearly 2,500 new loans totaling $489 million, increasing our loan balances to a record $644 million. The bank’s total assets also ended the year at a record $1.114 billion as we crossed the billion-dollar threshold for the first time in our long history.
In 2020, the bank posted net income from operating activities of $13.3 million providing a return on asset of 1.19%. In 2019, the bank was required to adopt a new accounting standard compelling us to record the change in market value on our investments in equity securities, or our stock portfolio, through our Statement of Income.That change resulted in a net of tax $4.9 million addition to income, bringing our net income to $18.2 million for the year.
The strength and safety of a bank is reflected in its capital, and in 2020 our capital grew to a record level of $164 million — a very healthy 14.7% of total assets. By way of comparison, the FDIC would deem a bank to be “well capitalized” with a capital ratio of only 5%.
Bath Savings Trust Company continued to combine exceptional investment performance with an unparalleled level of care, respect and individual attention to each client. Our total managed client assets increased by 23%, ending the year at nearly $1.4 billion — another year of exceptional service driving exceptional growth.
In 2020, it was more important than ever to be a good neighbor and support our local communities. The bank contributed over $663 thousand to hundreds of non-profit groups in our region. We supported our local foodbanks with employee food drives and contributions. Our employees, once again, stepped up and generously contributed over $46,000 to the United Way. The bank supported local restaurants by buying lunch for our employees each Friday during the economic shut down, and we purchased local gift cards which were distributed to healthcare workers at Mid Coast Hospital — neighbors helping neighbors!
We were honored to, again, be named as one of the Best Places to Work in Maine by the Best Company Group, an independent workplace research firm. We are pleased to be recognized as an organization with a culture that creates an environment where customers love to bank and people love to work.
In 2020, the bank began construction of our new office to be located on the corner of Spring Street and William Clarke Drive in Westbrook. We expect to open our tenth office in the summer of 2021.
We owe a huge thank you to our employees for the care and respect they show for our customers, our communities and each other. It is their ongoing commitment to providing exceptional service without exception to each of our customers that is the foundation of our success.
While we believe there will be better days ahead, the pandemic and its aftermath still affect us all. So, we will continue our never-ending journey of providing exceptional service without exception and strive to overcome any obstacles in our way because our customers deserve it.
Glenn L. Hutchinson, President & CEO