2016 Financial Highlights

Table of Contents

2 President’s Letter

4 Testimonial – Len Bicknell

5 South Shore Synergy

6 Consolidated Statements of Condition

7 Consolidated Statements of Income

8 Corporate Officers

1

Dear Friends of South Shore Bank,

It has certainly been a busy and full year since I took over as your President and CEO and there is much to be said about the positive changes experienced during that time. What truly resonates with me as we create new opportunities for the year ahead is best described by a 1960’s business leader, Max DePree, who fi rst

fostered the idea of an inclusive corporation: “We cannot become what we want to be by remaining who we are.” South Shore Bank has experienced much change and growth in 2016 while maintaining its strong tradition of service to our South Shore communities. By tackling challenges together and launching products and programs that propel us forward, our growth and continued evolution is possible. During this period, we grew our customer base signifi cantly, enhanced both our team and our services, and improved our balance sheet while maintaining our very strong capital position.

Th e success of 2016 was not the work of one person, but represents results driven by a collection of initiatives executed by teams of dedicated professionals. As with any set of strategies that involve change, there can be a period of adjustment. During this past year of such change, a primary focus of mine was and continues to be ensuring that our team members know they’re valued and have the support they need to reach their full potential. Th is same focus is refl ected in our commitment to and engagement in the communities which we serve. Many of the programs that came to fruition this past year, I believe, help reinforce our promise and message.

We remain committed to providing the very best service to our clients and have taken proactive steps this past year that refl ect that commitment. We have developed an expanded product set for businesses and added team members with expertise in these areas. Th is has enabled us to provide a full array of products to our commercial and small business clients and to attract a growing number of new clients. When our ATMs become next-generation interactive with a real-time interface with a knowledgeable and helpful bank employee on the other end, you know our commitment to service is genuine. Our passion to serve the needs of our clients and neighbors runs deep and is what matters. With Face2Face kiosks now in 9 branches, our clients interact with a live person who can answer banking questions immediately, with hours that are convenient to them.

Engagement in our communities remains of paramount importance. While some might argue that technology is what drives growth and profi t, I think diff erently. Although it is true that technology can simplify and enhance our lives, true growth and progress comes from leadership and learning. To foster that premise, in 2016 we launched Leadership South Shore with a clear mission to encourage volunteering and strong regional leadership. By enrolling local existing and emerging senior managers, and encouraging a healthy exchange of perspectives and experiences, the program provides these leaders with a forum in which they learn about their communities and lend their skills to make a diff erence. In partnership with the South Shore Chamber of Commerce, we are actively recruiting participants for the second year, so I urge you to consider becoming part of this community-centric program.

At the root of all growth and progress is education and we continue to allocate resources to empower our youth with knowledge and the necessary skills to succeed. Whether its

James M. DunphyPresident & Chief Executive Offi cer

President’s Letter

2

reading to elementary school students at Lincoln Hancock Community School in Quincy or taking part in Credit for Life fairs at area high schools, our team is committed to igniting a passion for learning and leadership in our region’s children. SSB is proud to introduce programs that provide interactive, thought-provoking content teaching students how to manage money and make academic and economic decisions that set them up for a lifetime of success. Our Financial Scholars Program provides high school students with an in-school curriculum that features the nationally recognized EverFi Financial Education™ software. An 8-hour, web-based program, EverFi uses the latest media technology to bring complex financial concepts to life for today’s digital generation. Through our charitable giving campaign, we are bringing the software to classrooms across the bank’s footprint at no cost to the high schools.

While most members of the millennial generation would love to find their dream job, graduating from college with a degree certainly doesn’t guarantee a favorable outcome. With leadership and strategic partnerships, however, we are making it easier for graduates from Bridgewater State University to connect with employers that require their skills and youthful energy to grow and thrive, through their Internship Program. Bringing qualified graduates together with employers with positions to fill is the mission of this unique partnership with the University. This is a tangible representation of the power of bringing together open minds with common interests – great things CAN happen.

Through a South Shore Charitable Foundation grant, we support an innovative new organization, the Veterans Entrepreneurial Training and Resource Network (VETRN) that provides no-cost classroom and on-line training to Massachusetts based veteran owned businesses seeking to expand through growth or acquisition. In addition, the

business owners are connected to a network of prominent leaders in the business, finance and legal and education community to act as resource post-training. In its third year of operation, the VETRN program has been quite successful and the Bank has established customer relationships with several businesses and owners having benefited from the training.

As anticipated, we’ve positioned ourselves for additional growth in North Quincy with the opening of our new office on Hancock Street. The branch is strategically located near the Red Line, a convenient stop for commuters, and it is one of the branches featuring our new Face2Face kiosk service. My thanks to the team for successful execution of this initiative. Opening doors across the regions means we can help even more of our neighbors achieve their financial goals and manage their money.

In closing, my sincere thanks for granting us the privilege of being your partner in financial management and for your support in making this year remarkable. There will inevitably be more change as time moves forward, and I’m pleased to report that South Shore Bank is well-positioned to manage through what challenges may lie ahead while remaining committed to you, our clients, our communities, our team members and our core values.

Sincerely,

James M. DunphyPresident & Chief Executive Officer

3

Len Bicknell recently participated in his 31st consecutive Pan-Mass Challenge, cycling 192 miles from Sturbridge to Provincetown as a member of South Shore Hospital’s Team SSH and raising nearly $38,000 for the Dana-Farber/Brigham and Women’s Cancer Center at the hospital. South Shore Bank supported this great cause with a signifi cant donation of $10,000 last year, continuing the 20 year tradition of being his lead sponsor.

Bicknell, who retired last year as president of Alvin Hollis & Company of South Weymouth, is a longtime member of South Shore Bank’s Board of Directors. He fi rst rode in the Pan-Mass Challenge aft er his father, Alvin, was diagnosed with advanced prostate cancer in 1986.

“My dad lost his battle and died from his cancer in 1989,” Bicknell said. “He was relatively young and very healthy. I never imagined it would take his life. I became a warrior, determined that I would ride this event and raise as much money as I could until there was no more cancer. Aft er 30 years of riding and raising money, my hope is as strong as ever that cancer will be cured in my lifetime, and I am grateful to South Shore Bank for their outstanding support.”

Testimonial – Len Bicknell

Len Bicknell raised nearly $38,000 riding in the Pan-Mass Challenge for the Dana-Farber/Brigham and Women’s Cancer Center at South Shore Hospital, including a $10,000 donation from South Shore Bank.

4

The interactive relationship between South Shore Bank (SS Bank) and South Shore Hospital (SS Hospital) runs deep and wide. Currently, for example, five former SS Hospital Board Chairs sit on the Bank’s Board of Directors, while SS Bank’s EVP/Chief Operating Officer and Chief Technology Officer is a SS Hospital Board member.

Both headquartered in South Weymouth, Massachusetts, SS Bank’s heritage of community commitment and network of 16 Retail offices has been serving Southeastern Massachusetts since 1833. SS Hospital, which is part of South Shore Health System, opened its doors in 1922 to provide quality medical care close to home.

With a combined two hundred and seventy-nine years’ experience, SS Bank and SS Hospital’s affiliation flows throughout the region like a fresh Spring river. Each is devoted to providing leadership, state-of-the-art products, up-to-date technology, and top-notch personal customer service.

“One of the best parts of my job is meeting with the many leaders who have shaped our organization into what it is today,” says Gene E. Green, MD, MBA, President & CEO, South Shore Health System. “Among them are the members of South Shore Bank’s Board of Directors who also have served on the Board of South Shore Hospital. Their volunteer leadership during the last three decades has measurably advanced the health and well-being of the people of our region. We are grateful for their enduring commitment to our charitable mission.”

“The collaboration between South Shore Bank and South Shore Hospital is a primary example,” explains James M. Dunphy, South Shore Bank President & CEO, “of how working together helps create a vibrant and healthy south shore.”

South Shore Synergy

A reunion of community-minded leaders. Pictured (l-r) are Len Bicknell, SS Bank Director and former SS Hospital Board Chair; John Boucher, former SS Bank President & CEO and former SS Hospital Board member; Pamela O’Leary, SS Bank EVP/COO/CTO & current SS Hospital Board member; David Jones, former SS Hospital Board Chair; Dr. Gene Green, MD, MBA, President & CEO, South Shore Health System; James M. Dunphy, SS Bank President & CEO; Arthur Sharp, SS Bank BOD Chair/ former SS Hospital Board Chair; Jim Bristol, former SS Hospital Board Chair; Arthur Connelly, former SS Bank President & CEO and former SS Hospital Board Chair.

5

Consolidated Statements of Condition (Years Ended December 31)

(unaudited) 2016 2015 2014

ASSETS

Cash & Due from Banks $ 23,913,758 $ 23,616,077 $ 11,085,630

Short-Term Investment 0 0 0

Federal Funds Sold 4,906,588 975,276 2,493,511

Investment Securities, net 209,723,425 229,669,135 216,254,055

Loans, net 764,807,927 729,213,021 716,441,922

Premises and Equipment, net 9,575,790 8,772,479 9,970,040

Other Assets 28,228,123 33,737,781 36,791,114

Total Assets $ 1,041,155,611 $ 1,025,983,769 $ 993,036,272

LIABILITIES & CAPITAL

Total Deposits $ 816,315,827 $ 747,848,487 $ 695,930,427

Borrowed Funds 98,000,000 157,000,000 175,000,000

Other Liabilities 10,808,112 9,953,392 12,144,185

Total Liabilities 925,123,939 914,801,879 883,074,612

Capital, net 116,031,672 111,181,890 109,961,660

TOTAL LIABILITIES & CAPITAL $ 1,041,155,611 $ 1,025,983,769 $ 993,036,272

6

(unaudited) 2016 2015 2014

INTEREST & DIVIDEND INCOME

Interest and Fees on Loans $ 29,966,956 $ 28,655,500 $ 29,112,670

Interest and Dividends 5,623,821 5,330,943 5,308,041

Total Interest and Dividend Income 35,590,777 33,986,443 34,420,711

INTEREST EXPENSE

Interest on Deposits 3,336,218 3,050,791 3,177,826

Interest on Borrowed Funds 3,058,394 3,845,206 4,227,614

Total Interest Expense 6,394,612 6,895,997 7,405,440

NET INTEREST INCOME 29,196,165 27,090,446 27,015,271

Provision for Loans Losses 1,092,231 551,000 396,796

Net Interest Income after Provision for Loan Losses

$ 28,103,934

$ 26,539,446

$ 26,618,475

TOTAL NON-INTEREST INCOME $ 3,114,529 $ 3,537,356 $ 2,772,882

TOTAL NON-INTEREST EXPENSE 24,864,711 25,715,338 25,425,178

Net Income Before Taxes $ 6,353,752 $ 4,361,464 $ 3,966,178

Provision for Income Taxes 1,939,951 1,252,671 737,056

NET INCOME AFTER TAXES $ 4,413,801 $ 3,108.793 $ 3,229,122

Consolidated Statements of Income (Years Ended December 31)

7

As of April 1, 2017Arthur H. Sharp Chairman of the Board of Trustees Chairman of the Board of Directors of South Shore BankJames M. Dunphy President & Chief Executive Officer/ Treasurer of South Shore BankJ. Leonard Bicknell Clerk of the Corporation

Trustees of South Shore Bancorp, MHCPhyllis F. Bailey Anderson Retired Business OwnerJ. Leonard Bicknell1 Retired President, Alvin Hollis & Company, Inc.John C. Boucher 1 Retired President & Chief Executive Officer, South Shore Bank

James E. Bristol, Jr.1 President, Bates Brothers Granite CompanyArthur R. Connelly1 Retired Chairman & Chief Executive Officer, South Shore Bancorp MHCJames M. Dunphy1 President & Chief Executive Officer, South Shore BankWilliam F. Garvey, CPA1, 2 Principal, W.F. Garvey, CPAPreston H. Hoffman2 President/Treasurer, A.E. Barnes & Co. Insurance Agency, Inc.David A. Jones1 Retired Vice Chancellor, Archdiocese of BostonDavid S. MacCoy1 Retired Owner, South Weymouth Car WashWilliam J. McNulty, Jr., Esq. Attorney at Law

Richard Nash2 President, Precision ReproGraphicsDaniel J. Quirk2 President/Owner, Quirk DealershipsHarry Salerno, CPA1, 2 Retired, O’Connor & Drew, PCArthur H. Sharp1 President, Sharp EnterprisesMichael Sheehan1 White Cap Performance Leonard F. Smith Retired Owner, Smith PrintMargaret K. Spagone1 President, East Bridgewater Insurance Agency, Inc.George W. Toma1 Retired Business Owner

Corporators of South Shore Bancorp, MHC (In addition to the Trustees)Jerry Agbon ALT Tach Choice Advisors LLC

Corporate Officers

8

Lawrence W. Baker Owner, Fringe Benefit PlanningClayton A. Bemis Retired Operations Manager, Carlysle Engineering, Inc.Robert J. Breen Retired, Raytheon CompanyJohn J. Clifford, Esq. Attorney at LawJohn F. Cunningham Retired, Boston Edison CompanyRobert J. Falconi Partner, Falconi Co.Judith N. Flukes Retired Retail MerchandiserGeorge Friedman Retired PharmacistChester A. Gillis President & CEO, W.M. Gulliksen Mfg.Richard F. Holbrook President, Holbrook Associates, Inc.Elena Kirkiles Principal, Kirkiles and Associates Commercial Insurance Brokerage

Frank S. Lagrotteria, Jr. Maintenance SupervisorJoel A. Leonard, D.M.D. Retired DentistRobert T. Looney, Esq. Attorney at LawPaul T. Modestino General Manager, Standish & Standish Realty GroupWilliam J. Murphy, Jr. Trustee, Unicorn Realty TrustGeorge H. Raymond Owner, Herbert W. Raymond & Son RealtorsEric B. Remsen President, Remsen Insurance Agency, Inc.Frederick J. Sheehan, Jr. Financial ConsultantRobert D. West Retired Superintendent, Weymouth Public School

Honorary TrusteesRonald A. Downing

South Shore Bank Executive OfficersJames M. Dunphy President & Chief Executive Officer/ Chief Financial OfficerPamela J. O’Leary Executive Vice President/ Chief Operating Officer/ Chief Technology Officer Amy Geogan Senior Vice President/ Chief Credit OfficerMichael Healy Senior Vice President/ Senior Commercial Loan Officer Rosemarie McGillicuddy Senior Vice President/ Director of Human Resources

Corporate Officers continued

1 Board of Directors2 Audit Committee 9

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