2018 - Peoples Trust Company · 11 ANNUAL REPOR T I 2018 STATEMENTS OF CASH FLOWS continued Years Ended December 31, 2018 & 2017 CASH FLOWS FROM FINANCING ACTIVITIES 2018 2017 SUPPLEMENTAL

2 0 1 8A N N U A L R E P O R T

ENOSBURG FALLS

ESSEX

GEORGIA

SAINT ALBANS

SWANTON

(800) 479-2196

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PRESIDENT/CEO MESSAGE 1

INDEPENDENT AUDITOR’S REPORT 4-5

FINANCIAL STATEMENTS

Balance Sheets 6

Statements of Income 7

Statements of Comprehensive Income 8

Statements of Changes in Shareholders’ Equity 9

Statements of Cash Flows 10-11

Notes to Financial Statements 12-39

TABLEOFCONTENTS


MAIN OFFICE 25 Kingman Street, St. Albans, VT

ENOSBURG FALLS 140 Main Street, Enosburg Falls, VT

ESSEX TOWN CENTER 1 Carmichael Street, Essex, VT

FRANKLIN PARK WEST 1 Franklin Park West, St. Albans, VT

GEORGIA 1127 Ethan Allen Highway, Georgia, VT

SWANTON 123 First Street, Swanton, VT

CUSTOMER SERVICE Local: (802) 524-2196 • Toll Free: (800) 479-2196 Telephone Banking: (802) 524-5054 (800) 203-9575

BRANCHLOCATIONS


1

March 1, 2019

Dear Peoples Trust Company Shareholder,

Enclosed you will find a copy of the 2018 Peoples Trust Company Audited Financial Report. We are pleased with the results contained within this report as they reflect a collaborative effort amongst the talented team here at Peoples Trust Company and the community in which we have the privilege of serving. Our Northwestern Vermont marketplace continues to benefit from economic stability despite some pockets of challenges such as those facing the dairy farm community and the infrastructure that supports it. We continue to watch this market segment closely.

While the national economic outlook still remains generally positive, across the country many individuals and businesses express less optimism due to increased financial market volatility, rising short-term interest rates and elevated trade and political uncertainty. As I write this message to shareholders, the country remains in the longest partial government shutdown in its history without a clear path or timetable of resolution. I hope by the time you read this letter, a solution has been achieved to fully reopen the government. To a growing degree, optimism has begun to be replaced by uncertainty, the unknown and what is left to chance.

Fortunately, our success has been largely a result of deliberation and action, not chance. Over the past few years, the Board of Directors and Peoples Trust Company staff has engaged in strategic planning much more aggressively, and the results have been a renewed level of focus, discipline and ultimately, improved financial results. We have also worked diligently to hone and improve on our delivery systems to our valued clients. I’m proud of what our team accomplished this past year. Here are a few of the financial highlights of the year ended December 31, 2018 compared to year ended December 31, 2017:

• Netincomeincreased$373,863,or25.2%to$1,855,361.• Totalassetsincreasedby$4,846,028,or1.9%to$266,943,987.• NetLoansintheownedloanportfolioincreased$18,243,605,or10.8%to$186,547,994.• Non-performingloansdecreased$1,742,273,or45.3%to$2,104,446.• Bookvaluepershareincreasedby3.4%to$55.00pershareasofDecember31,2018.

You will find more detail in the accompanying pages of this report.

The Board of Directors and I are pleased to announce that at the February 2019 Board meeting, Board members voted to once again increase the annual dividend payout to its shareholders from $0.75 per share to $0.85 per share. This marks the third consecutive year the bank has increased its dividend payment to shareholders. Despite the difficulty in finding available shares, the bank was able to fulfill the Dividend Reinvestment Plan for all participants in 2018. This is a well subscribed service that over 70% of our shareholder base currently participates in. As noted numerous times throughout the past few years, the bank is committed to delivering tangible shareholder value.

I would also like to invite you all to attend the 132nd annual shareholder meeting on Tuesday, April 23rd at 10:00am in the Board of Directors room at 25 Kingman Street, St. Albans, VT. We have benefited from strong attendance over the past couple of years, and I appreciate the opportunity to interact with the shareholder base. I hope to see many of you at this meeting.

Thank you once again for your belief, commitment and confidence in the Bank with a Heart. We appreciate your investment and your continued faith in us. Sincerely,

Thomas J. GallagherPresident/CEOPeoples Trust Company

ANNUAL REPORT I 2018

3 ANNUAL REPORT I 2018

PEOPLES TRUST COMPANY OF ST. ALBANS

FINANCIAL REPORT

DECEMBER 31, 2018

INDEPENDENT AUDITOR’S REPORT

4

INDEPENDENT AUDITOR’S REPORT continued

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BALANCE SHEETS December 31, 2018 & 2017

ASSETS 2018 2017

LIABILITIES AND SHAREHOLDERS’ EQUITY

See notes to financial statements.


STATEMENTS OF INCOME Years Ended December 31, 2018 & 2017

2018 2017



STATEMENTS OF COMPREHENSIVE INCOME Years Ended December 31, 2018 & 2017

2018 2017



STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY Years Ended December 31, 2018 & 2017



STATEMENTS OF CASH FLOWS Years Ended December 31, 2018 & 2017

CASH FLOWS FROM OPERATING ACTIVITIES 2018 2017

CASH FLOWS FROM INVESTING ACTIVITIES



STATEMENTS OF CASH FLOWS continued Years Ended December 31, 2018 & 2017

CASH FLOWS FROM FINANCING ACTIVITIES 2018 2017

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING ANDFINANCING ACTIVITIES



NOTES TO FINANCIAL STATEMENTS


NOTES TO FINANCIAL STATEMENTS continued



















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BOARD OF DIRECTORS

Robert A. Cioffi, Chairman of the Board of Directors of Peoples Trust Company of St. Albans since 1990 Retired Owner, Cioffi Real EstateJohn T. Gallagher, Member of Board of Directors of Peoples Trust Company of St. Albans since 1991 Owner and President, Gallagher Inc.Donald G. Poirier, Secretary and Member of Board of Directors of Peoples Trust Company of St. Albans since 1996 Retired Executive Vice President, Peoples Trust Company of St. AlbansMark E. Lareau, Member of Board of Directors of Peoples Trust Company of St. Albans since 2001 Owner, Lareau Appraisal ServiceLinda M. LeBlanc, Member of Board of Directors of Peoples Trust Company of St. Albans since 2005 Senior Executive Officer/Chief Operations Officer of Peoples Trust Company of St. AlbansLeon J. Berthiaume, Member of Board of Directors of Peoples Trust Company of St. Albans since 2008 CEO, St. Albans Cooperative Creamery, Inc.Frank J. Cioffi, Member of Board of Directors of Peoples Trust Company of St. Albans since 2009 President, GBIC (Greater Burlington Industrial Corp.)

Thomas J. Gallagher, Member of Board of Directors of Peoples Trust Company of St. Albans since 2011 President/CEO of Peoples Trust Company of St. AlbansJohn P. Casavant, Member of Board of Directors of Peoples Trust Company 2016 Part owner and Vice President at NFP, Inc. (formerly Hackett, Valine and McDonald)David J. Handy, Member of Board of Directors of Peoples Trust Company 2016 Co-owner of Handy Buick, Cadillac, GMC, Inc. Claire J. Manahan, Member of Board of Directors of Peoples Trust Company 2016 Retired Gordon A. Winters, Member of Board of Directors of Peoples Trust Company 2016 Owner/President of Swanton Lumber and ACE Hardware stores in Milton, Jericho, St. Albans, VT and Champlain, NYMarc J. Reynolds, Director, Emeritus

EXECUTIVE OFFICERSThomas J. Gallagher President/CEOLinda M. LeBlanc Senior Executive Vice President/COO

Aaron A. Reynolds Senior Executive Vice President/CFO

OTHER OFFICERSMichael J. Elmore Senior Vice President, CIOAngela M. Poirier Senior Vice President, CLSBarbara J. Toof Senior Vice President, CRBOMaureen J. Toof Senior Vice PresidentCarol C. Spillane Senior Vice PresidentLloyd W. Larrow Senior Vice PresidentStacey M. Cauller Senior Vice President

Anne E. Gosselin Senior Vice PresidentDanielle E. Manahan Senior Vice PresidentJanice L. LaRocque Senior Vice President, BSALyle D. Poirier Vice PresidentKerry M. Deschamps Vice PresidentJay C. Cummings Vice PresidentRachael A. Brown Vice President

BOARD OFDIRECTORS

EXECUTIVEOFFICERS

OTHER OFFICERS

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ANNUAL REPORT I 2018

Documents

2018 - Peoples Trust Company · 11 ANNUAL REPOR T I 2018 STATEMENTS OF CASH FLOWS continued Years Ended December 31, 2018 & 2017 CASH FLOWS FROM FINANCING ACTIVITIES 2018 2017 SUPPLEMENTAL