2 0 1 7 A N N U A L R E P O R T

Your Community, Your Bank

2 0 1 7 A N N U A L R E P O R T

Dear Friends and Neighbors,

As your community bank, serving you and our community are of the utmost importance to us.

We are an independent bank not owned by shareholders. Building lifetime relationships by partnering with our customers to identify and achieve their financial goals is our customer service philosophy. All of our employees demonstrate their dedication and passion about being part of the Ion Bank team which is evident by the exceptional service culture that sets us apart. It’s no surprise that for the fifth consecutive year, Ion Bank was ranked as a Top Workplace in southwest Connecticut.

We proudly serve our communities as an exemplary corporate citizen, through volunteerism and financial support.

In 2017, Ion Bank achieved a significant milestone of reaching $1 Billion in deposits. The Bank has come a long way and experienced so much growth since our first deposit of $5 in 1870.

An organizational change that took place this year is David Rotatori was named President and Director. Charles Boulier, Chief Executive Officer, has started to gradually transfer leadership of day-to-day operations to David as he prepares for his retirement in January 2019.

As we continually strive to make banking All Kinds of Easier, we are pleased to have introduced additional convenience products and services in 2017.

The Mastercard® Easy Savings Program allows businesses to save on hotels, restaurants, gas, travel and more by getting rebates when using their Ion Bank Business Debit Card.

When you and your friend register for our customer loyalty program, Refer a Friend, you will both receive a $50 Visa card if your friend opens a personal checking account and completes specified qualifications within 60 days.

Popmoney, a person to person payment service, is an easy way to safely and securely send or receive money electronically.

Ion Express Loan is an online application that provides an instant decision for unsecured business loans up to $100,000.

We expanded our Personal Teller network by installing a dual extended-hours Personal Teller and 24/7 ATM in our Wallingford and 87 Church Street, Naugatuck branches.

We are grateful for your business and thank you for your loyalty and trust in us. We look forward to meeting your financial needs and exceeding your expectations for personal attention and more convenient services.

A Letter from Your Bank’s CEO & President

Sincerely,

David Rotatori President

Sincerely,

Charles J. Boulier, III Chief Executive Officer

2 0 1 7 A N N U A L R E P O R T

Your Bank’s Happenings

Popmoney® Personal Payment ServiceSend money to friends and family quickly, easily, and securely, directly from iBanking. All you need is the recipient’s email address or mobile phone number. Popmoney is a person-to-person payments service enabling individuals to send and receive payments electronically designed to replace traditional check payments.

Mastercard Easy Savings ProgramWith the Mastercard Easy Savings Program, businesses can save on hotels, restaurants, gas, travel and more. All of our business debit card holders will be automatically enrolled and will get rebates on qualified purchases at any participating merchant; and rebates will be automatically credited to their account. This program is of no cost to our customers and they can track their rebates and learn about new merchants and offers on Mastercard’s website.

Refer a FriendWhen you and your friend register for our customer loyalty program, you will both receive a $50 Visa card if your friend opens a personal checking account and completes specified qualifications within 60 days.

A New Part of Bill Pay.

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A Top Workplace

For the fifth consecutive year, Ion Bank was listed among the top 20 workplaces in southwest Connecticut in the category of mid-sized companies and was among the top 45 workplaces of any size in an annual employee satisfaction survey of workers in Fairfield, Litchfield and New Haven Counties.

Your Bank’s Culture

Our Service Philosophy

We build lifetime relationships by partnering with our customers to identify and achieve their financial goals.

Our talented, dedicated and enthusiastic employees are committed to live our service philosophy and standards and to provide friendly and personalized service to every customer every day. To support this mission and foster a positive work culture, we have an employee recognition program that honors employees who best represent the principles of our service philosophy and service standards.

Our Employee Recognition Program Award is given every quarter to the employee who best represents the Bank’s engrained culture of giving customers the service and dedication they deserve, every day.

Safety & Security • Accuracy • Responsiveness • Friendly, Personalized Service

The survey results stressed the importance Ion Bank workers place on opening and maintaining good lines of communication between management and bank employees. It also reinforced who we are and it also told our customers that we have exceptional employees and that we put a lot of effort into hiring great people with winning attitudes who can provide unparalleled service to our customers.

20172013 2014 2015 20165YEARS STRONG

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CONSOLIDATED STATEMENT OF CONDITIONDecember 31, 2017 and 2016 (in thousands of dollars)

December 2017 December 2016

ASSETS

Cash and Cash Equivalents $ 16,529 $ 14,764

Investment Securities &

Interest Bearing Cash Equivalents 168,309 145,698

Loans —

Loans and Mortgages 1,038,406 1,000,871

Less Allowance for Possible Loan Loss 10,385 9,248

Total Net Loans 1,028,021 991,623

Other Assets 52,210 54,085

TOTAL ASSETS $ 1,265,069 $ 1,206,170

LIABILITIES AND RETAINED EARNINGSDeposits—

Savings & Time $ 523,434 $ 532,579

NOW, Money Market & Checking 507,456 445,415

Total Deposits 1,030,890 977,994

Borrowings 85,125 96,083

Other Liabilities 33,159 31,493

Total Liabilities 1,149,174 1,105,570

Accumulated Other Comprehensive Income (12,773) (12,650)

Retained Earnings 128,668 113,250

TOTAL LIABILITIES & RETAINED EARNINGS $ 1,265,069 $ 1,206,170 Information based on Call Report data

Your Bank’s Year by the Numbers

2 0 1 7 A N N U A L R E P O R T

Your Community. Your Bank.

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For more than 148 years, community support has been a fundamental part of Ion Bank’s mission. We strongly

believe in contributing to the betterment of the communities we serve by supporting the economic well-being

and quality of life that helps enrich all of our lives.

Ion Bank and the Ion Bank Foundation partner with non-profit organizations by providing direct support to

make our communities a better place to live, work and prosper. In 2017, more than $681,000 was donated to 313

local organizations for a variety of causes such as areas including health, education, economic development,

human and social services, and the arts.

Our employees also take great pride in helping to make a positive impact in our local communities. We actively

encourage our employees to volunteer their time and make a difference by helping local community and non-

profit organizations. Ion Bank employees donated 7,609 of hours of community service in 2017. We are proud

of the impact that our bank and its employees have on enriching the lives of people in our local communities.

Community Awards Program

Our 8th Annual Community Awards Program allowed our customers to help the Ion Bank

Foundation give away over $60,000 to 134 local non-profit organizations in the communities

we serve. We invite each Ion Bank customer to cast a vote for their favorite participating

non-profit organization. We want the people of our communities to help us decide who

needs our help the most.

House of Heroes CT Chapter -

Veterans Home Improvement

Project

Girls Inc. Meriden - Arts

Program

Taft School - PAL Summer Enrichment

Program

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Your Bank’s Leadership

Member FDICEqual Housing Lender

WEB IonBank.com PHONE 203.729.4442 | 877.729.4442 WEB CHAT Select “Contact” at IonBank.com

BANK-BY-PHONE 203.720.5300 | 888.891.4219 SOCIAL MEDIA Facebook.com/IonBank | Twitter.com/Ion_Bank MAIL PO Box 370, Naugatuck, CT 06770

James J Jackson Peter Jacoby Marcelo Martins James McCowan John M. Milone, Jr. Matthew L. O’Connor Ronald J. Pugliese Elizabeth M. Santoro Paul R. Simko Theron Simons George Stone Michelle M. Stronz Scott M. Sutherland Kathy K. Taylor Deborah Wheelahan Laurie M. Yelding

Roy A. Balkus James P. Behuniak Regina S. Birdsell Caren Bouchard John A. Brucato Wayne P. Buckmiller Robert Cappelletti Patrick A. Charmel Rocco K. Corso Laura C. Dake-Roche Jose P. DaSilva Peter J. Escobar David Ferraro Edward G. Fitzpatrick Paul Fitzpatrick Eugene A. Fridland Tom Hennick

Directors + CorporatorsMark C. Yanarella, Chairman Charles J. Boulier, III Ann Merriam Feinberg Richard H. Gesseck Lucille Janatka

David W. Nurnberger Gary B. O’Connor David Rotatori John H. Tobin Stephen C. Widman

Corporators