2017 Executive Summary
To our Corporators, Customers, Staff and Other Friends
Our mission of Exceptional Service Without Exception is brought to life every day by the efforts of our employees. Our team of talented and professional bankers provides value and builds mutually beneficial and enduring financial relationships. This level of service helps turn satisfied customers into loyal customers who happily recommend Bath Savings to their friends, families and neighbors. It is because of this, that Bath Savings posted its tenth consecutive year of record financial results.
Net income for 2017 was $11,370,413 — $3.3 million more than last year’s record. The Bank’s income before taxes and gains on securities in 2017 was $1.6 million more than 2016. In 2017 the Bank recorded $554 thousand more in gains on the sale of investment securities than we did in the previous year. The remainder of the increase, $1.2 million, was attributed to the provision for income taxes.
Late in 2017 the corporate tax rate fell to 21%. While that rate will not be effective until 2018, the accounting standards require that organizations must revalue their deferred tax accounts in the year the law was enacted. Since Bath Savings has deferred tax liabilities, the reduction of that liability caused a corresponding reduction in our provision for tax expense of $2.1 million. That caused our 2017 provision for taxes to total $1,467,213, or $1.2 million less than 2016.
As a mutual organization, all our earnings are retained as Capital Reserves and Undivided Profits. In 2017 our capital reached a record level of $112.9 million, nearly 13% of total assets. This ratio is a measure of a bank’s strength and safety. At the end of December our capital ratio was more than twice the amount the FDIC requires to be designated as well capitalized.
Customers continue to seek the exceptional service our employees provide, pushing our total deposits to a record $706 million. By the end of 2017 the total number of checking accounts, the cornerstone of a full banking relationship, grew to 20,000, nearly equaling the total number of savings and time deposits combined, while the balance in those accounts grew to $305 million.
The Bank’s total assets grew to $876 million. Loan portfolios grew by nearly 7% to finish the year at a record $602 million. In 2017 the Bank originated $282 million in new loans to individuals, businesses and municipalities throughout our region.
In 2017 Bath Savings increased its investment in facilities and technology by slightly over $1 million. The primary investment was the purchase of the former Bank of America building located at 83 Front Street, next door to our main office in Bath. This building is currently undergoing renovations for our expansion of deposit support staff to this new location by mid-2018. We also completed renovations to our Falmouth and Bath offices during the year, improving customer privacy, office efficiency and aesthetics.
Customers continue to choose Bath Savings Trust Company to manage their financial assets. By the end of the year the Trust Company managed 1,745 accounts, to a record $921 million in managed assets. Our clients were delighted with another outstanding year of financial performance, and even more pleased with the unmatched level of care, respect and individual attention they receive.
In 2017 the Bank continued its strong support of our local communities with contributions of $617 thousand to hundreds of non-profit groups in our region. Our employees showed their support by providing over 5,232 volunteer hours to nonprofit and charitable organizations, both during and after business hours.
Last summer our Chairman of the Board of Trustees, Brian Perkins, retired after 26 years of service, 16 as Chairman. We thank Brian for his years of service and many contributions to the success of Bath Savings Institution. Bath Attorney and Judge of Probate John W. Voorhees was elected Chairman of the Board in August. A corporator since 1978, he has been a member of the Board since 2009. Erik Hayward, Senior Vice President of the Libra Foundation of Falmouth, was elected a new Trustee in October. We are fortunate to have these strong leaders on our Board of Trustees.
In 2017 we were named as one of the Best Places to Work in Maine once again by the Best Company Group, an independent workplace research firm. We are honored to be recognized as an organization that creates an environment where people love to work.
I am proud to work alongside our team of talented and caring professionals who truly care about our customers, the Bank and each other. I thank them for their continued efforts building and maintaining loyal customer relationships. Together, we will always deliver that exceptional service which sets us apart.
Glenn L. Hutchinson, President & CEO