COVER

2015 ANNUAL REPORT

OUR MISSION We will remain a strong, mutual financial institution where valued employees provide personalized service that exceeds customer and community expectations.

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DIME BANK 2015 ANNUAL REPORT

PRESIDENT’S LETTER Dear friends and neighbors, The past year has been an important year for Dime Bank. 2015 was defined by impactful decisions and strategic initiatives that will shape the bank’s operations in the short term and far into the future. We went beyond our competition to introduce innovative checking products that provide new and existing Dime Bank customers with distinct value that has not previously existed in our market. We invested in core technology and infrastructure that will empower our employees with efficiency beyond that which was previously possible. We finished preliminary planning and design for the opening of a 12th branch that will fulfill the community banking needs of customers previously beyond our physical footprint. For these reasons, the theme of the 2015 Dime Bank Annual Report is Banking Beyond Limits. Overall it has been a positive year and we have made significant progress. Our financial performance finished very close to our expectations. We saw a healthy growth in deposits and loans, and grew in assets to over $785 million. This is certainly a testament to our stability and reliability in the continued low-interest rate environment that has been challenging for both savings-focused consumers and financial institutions. As the country continues its gradual economic uptick, we must bear in mind that trends in the southeastern New England economy are different from many national trends. To successfully navigate in this economy we must continue to truly differentiate ourselves from competitors while embracing growth and diversification strategies that ensure our long-term value as a local community bank. During 2015, the unveiling of our new DimePerks checking account products introduced a unique value proposition into our local market. We picked up the phone and hit the streets to partner with hundreds of local merchants and created an unmatched portfolio of local discounts for DimePerks customers. We took the time to consider what value-added services matter to our customers – things like identity theft protection, roadside assistance and cell phone protection – and we delivered them so that we can deepen our relationship with our customers – that’s banking beyond limits. We also completed a 9-month evaluation of the bank’s core technology platform that will result in our conversion in 2017 to a new, more advanced technological infrastructure that provides enhanced customer-facing technology while creating back-end efficiencies for our employees. Our continual evaluation of our customers’ experience enables our ability to strategically evolve and improve the way we provide banking services.

DIME BANK 2015 ANNUAL REPORT

In 2015, we also laid the groundwork to open a 12th Dime Bank branch in Colchester, CT, that will be the embodiment of our commitment to the modern banking experience. The branch is slated to open in the spring of 2016. It will be staffed by a team of universal bankers whose ability to perform a broad and diverse spectrum of transactions means better service in less time. At this branch, customers will be able to literally take banking into their own hands with our interactive banking tablets and displays, and free in-branch Wi-Fi will let customers stay connected. Our Colchester branch will be a brick and mortar symbol of the strong relationships Dime Bank already holds in the Colchester community. Many of our existing loan customers in the Colchester market are encouraged that we will be offering a full service branch that is conveniently located near them. And as we are committed to meeting the evolving needs of our customers, our roots as a community-first mutual bank is always the bedrock upon which our bank is built. I often mention Dime’s continued commitment and dedication to supporting our communities and this past year was yet another example of that focus. Our employee “Blue Crew” volunteers as well as the Dime Bank Foundation completed yet another year of stellar community service and charitable giving. The positive impact that we have on our communities spanning from East Lyme and New London to Norwich and Westerly could not be possible without the steadfast generosity of our employees and directors. In closing, I want to extend my sincere thanks to Dime Bank’s employees, dedicated directors, corporators and our highly valued customers for the trust and confidence they place in us. Thank you for another great year of Banking Beyond Limits. With pride and best regards, Nicholas Caplanson, President & Chief Executive Officer

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BUSINESS BEYOND LIMITS “If somebody came to me and asked if I’d recommend doing business with Dime, I’d say, ‘You bet your life I would.’”

$83.2

INCREASED LENDING MEANS MORE RESOURCES FOR BUSINESSES.

$59.2 2011

2012

2013

2014

2015

Commercial Loan Originations (in millions) 4

DIME BANK 2015 ANNUAL REPORT

Made from the right stuff – United Builders Supply If you want to build something right, you need the right tools. Whether it’s a house, a company, or a community, United Builders Supply in Westerly, RI, has had the right tools for over 70 years. The Slosberg family founded UBS in 1941, and it’s been serving homeowners and contractors with quality products and excellent service ever since. More than a decade ago, UBS set out to find a bank that really understood its commercial needs. It makes sense that they found that understanding at their local community Dime Bank. “Once we started working with Dime our banking fees went way down,” said UBS Internal Accountant Mark Maleno. “Dime makes the commercial loan process easy for us wherever possible. The teller staff is phenomenal. If there’s something happening with our account that we need to know about, Dime tells us ahead of time so that we can adjust.

“It’s the best bank in town and the competition isn’t even close.” Since setting up shop in Westerly, UBS has added locations in Waterford and Niantic, CT, and Richmond, RI. Through its continued growth, UBS has maintained its culture as a family business. “The people who work here are like a family,” said UBS’s 1st Vice President and General Manager Jackie Nix, who joined UBS in 1979 as an office administrator. “With hard work, you can be whatever you want to be here.”

$372 MILLION

DIME BANK 2015 ANNUAL REPORT

“We like to promote from within,” said Jared Beaulieu, UBS Vice President CFO/Controller, who started at UBS in 1975 as a lumberyard worker. “You’re not going to find a place with as much product knowledge on the other side of the counter as we have here at UBS.” Total Commercial Loans Originated Last 5 Years

“Our relationships are with the communities we service, and we always work with the communities where we’re doing business. UBS also supports many charitable projects including the Ocean Community YMCA in RI and the Waterford County School in CT,” Jared said. “We’ve had a very successful relationship with Dime Bank, and if somebody came to me and asked if I’d recommend doing business with Dime, I’d say, ‘You bet your life,’ and I would send them right down to Beth (D’Amato) and Kevin (Owren).” 5

BENEFITS BEYOND LIMITS Dime Bank reached out to customers and partnered with hundreds of local businesses in the creation of our unique product offering, and in 2015 the project culminated in the roll out of the DimePerks checking suite.

Online banking, local discounts and special offers with all the perks 6

DIME BANK 2015 ANNUAL REPORT

DimePerks Providing everyday value For more than a year, Dime Bank researched, planned and implemented a new suite of personal checking products that focus on providing real value to our customers and to our local communities. Our employees reached out to customers and partnered with hundreds of local businesses in the creation of our unique product offering, and in 2015 the project culminated in the roll out of the DimePerks checking suite. As a true community bank, Dime Bank is always looking for ways to build on our relationships with the people and places where we live and do business. The introduction of DimePerks is a smart and valuable way for us to solidify our bond with the community by encouraging customers to buy local and rewarding them with real money-saving discounts to their favorite shops and restaurants.

These new products are a bold step forward for the region’s community banking market. In addition to the network of exclusive discounts available to DimePerks customers, we wanted these products to contribute to the overall health and well-being of our community. That’s why DimePerks includes unique features like identity theft protection, health savings cards, roadside assistance, and cell phone protection. For many customers, a checking account is the heart of their relationship with their bank.

With DimePerks, Dime Bank packed as much value into that relationship as possible – all while promoting local businesses and differentiating ourselves from our competition.

DIME BANK 2015 ANNUAL REPORT

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Building on a family legacy – Bruce & Ron Goldstein Long before brothers Bruce and Ron Goldstein were the owners of Paradise Agency LLC – a real estate management and development company in Colchester, CT, that manages about 400 residential units and several commercial properties – they were the company’s first two unofficial employees. Their father, Alfred, and mother, Renee, ran the company out of their home in Colchester, so Ron and Bruce spent much of their childhood learning what it meant to run a community-oriented business. These lessons had a strong influence on Bruce and Ron as they continued their educations. Bruce studied real estate finance at UCONN and Ron went on to study law at Harvard Law School. The brothers brought their skills back home and continued to grow the family business.

“It was always important to my father to be able to walk into a bank and to talk to the people who were making the decisions.

FAMILY BEYOND LIMITS “Sometimes you’ve got to react, and when we know we need something to fall into place quickly, Dime is there.”

Even to just say, ‘Hi’. That made an impression on me, to have that kind of a relationship,” said Ron. “Dime Bank has absolutely preserved that relationship.” The Goldsteins pride themselves on providing their clients and tenants with quality, personalized service. In addition to their traditional residential and commercial projects, Paradise Agency has recently started specializing in developing housing designed for residents age 55+. They are longtime customers of Dime Bank because Dime meets the high standard of customer service that they expect from their own companies. “Our parents built houses and apartments for people, they weren’t just interested in the business part of it,” Bruce said. “Our management philosophy is very personalized, and we take care of our tenants right down to changing their light bulbs if that’s what they need.” “Dime Bank has stepped in and worked with us when we needed them,” Ron said. “Dime is aggressive and cooperative, they’re diligent and quick too. Response time matters tremendously, because when you’re looking to finance a property, you don’t necessarily know eight months in advance that you’ve got to get the ball rolling. Sometimes you’ve got to react, and when we know we need something to fall into place quickly, Dime is there.” 8

$58

Commercial Loan Portfolio Growth Last 5 Years

MILLION

DIME BANK 2015 ANNUAL REPORT

INVESTING IN THE BUSINESSES THAT SUPPORT OUR COMMUNITIES.

$250.4

2011

$308.5

2015 Commercial Loan Portfolio (in millions)

DIME BANK 2015 ANNUAL REPORT

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BRANCHING BEYOND LIMITS COLCHESTER 2016

Customer Pod

Designed for convenience, this modern Customer Pod provides a more interactive setting for customers to work with their Universal Bankers. Cash recycler machines increase the speed of banking transactions.

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This is where customers take banking into their own hands. This fully interactive area means no waiting in line, as customers can bank from our mobile tablets and learn about all of our products and services via the communication board.

Universal Bankers

Tech Wall

These knowledgeable, highly trained staff can handle anything from everyday transactions, new deposit products, residential and personal loans, making them a one-stop-shop for customers’ needs.

DIME BANK 2015 ANNUAL REPORT

Solution Booth Power Station

Consider this your homeaway-from-home office. At the power station, customers can take advantage of free Wi-Fi, hot coffee, copier, fax machine and charging stations for mobile devices.

Sit down in style with one of our Universal Bankers at the Solution Booth to talk about your banking needs. Our comfortable Solution Booth provides the privacy needed for all of your banking needs.

Artist's rendering

DIME BANK 2015 ANNUAL REPORT

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Growing With Dime – Nick & Allison Schmitz For most of their lives, Nick and Allison Schmitz never thought much about becoming homeowners. Nick was busy running his own landscaping business and Allison had her hands full with their three sons. The young couple had a convenient rent-to-own scenario set up in an East Lyme house that Allison’s parents owned – but it’s funny how quickly a house seems to shrink as three little boys start to grow. “With the kids getting older, they needed their own space and we needed ours,” Allison said. “We started looking for a home in February 2014 and, since we started during the winter, it was difficult.” Buying a new home is never a simple task. But working with Dime Bank mortgage officer Jeanne Lussier, made the process much easier for the Schmitzes. “Since this was our first house we really didn’t know what to expect, but Jeanne was fabulous,” Allison said. “She kept in touch with us throughout the whole process and kept us up-to-date with what was going on and when we needed to sign important documents – she was great.”

SERVICE BEYOND LIMITS “Since this was our first house we really didn’t know what to expect, but Jeanne was fabulous!”

After months of searching for the right house, the couple had found one they loved and were ready to buy. Jeanne got them pre-approved for financing and the Schmitzes made an offer, but the sellers weren’t ready to come to the closing table. After two more months of house-hunting, Nick and Allison found another listing they loved, and with Dime Bank in their corner, they were able to move fast. “The house was perfect for our family, so we went to look at it and then right away we put an offer in on it and things started to get rolling,” Allison said. Nick and Allison waited with bated breath as they submitted the final pieces of their mortgage application. Jeanne had them well prepared, and they were elated when Dime Bank gave them good news.

“When Jeanne said, ‘Everything was approved, now you can get a house’ – it was fabulous and suddenly a weight was lifted.” Allison said. 12

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LOANS THAT LET OUR NEIGHBORS BECOME HOMEOWNERS.

DIME BANK 2015 ANNUAL REPORT

$425

Total Residential Loan Originations, Last 5 Years

MILLION

DIME BANK 2015 ANNUAL REPORT

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COMMITMENT TO COMMUNITY

Year after year, Dime Bank shows its commitment to its communities through the Dime Bank Foundation and the Blue Crew group of employee volunteers. Dime Bank gave close to $335,000 to more than 100 local organizations in 2015, and our Blue Crew volunteered 900 hours of their time to serving the community.

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“Dime Bank is truly a bank that cares about the community. The Blue Crew volunteers have provided invaluable service to Bethsaida by painting all of the bedrooms and library/prayer rooms for our Patricia’s Place Program. Every year they sponsor and attend both of our annual fundraising events which helps us tremendously! Thank you Dime Bank!” Claire Silva, Executive Director Bethsaida Community, Inc.

DIME BANK 2015 ANNUAL REPORT

$335K 100+

Contributions to Community

Organizations Supported

900 Hours Volunteered

“Dime Bank’s generous financial support, and service to the community have had a tremendous impact on the children and families we serve each day here at Madonna Place. Without a loyal community partner like Dime, we would not be able to provide our neighbors with the critical services they truly need. Thank you Blue Crew!”

“As a 70-year-old nonprofit, the Stonington Community Center is truly grateful to our community partners whose support plays a vital role in sustaining and building upon the COMO legacy. Thank you, Dime Bank, for your steadfast commitment to the COMO, as well as, the larger community. It is our utmost pleasure to honor you as a 2016 Star over Stonington for your leadership and contributions to strengthening families and community.”

Nancy Gentes, Executive Director Madonna Place

Beth-Ann Stewart, Executive Director Stonington Community Center

DIME BANK 2015 ANNUAL REPORT

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BOARD OF DIRECTORS

Front Row – Linda L. Mariani, Attorney, Senior Partner, Mariani & Reck, LLC; Nicholas Caplanson, President/CEO, Dime Bank; Roland J. Harris, Commercial Realtor, Coldwell Banker Back Row – Robert A. Staley, Retired Managing Director, Cornerstone Real Estate Advisers; Mark E. Tramontozzi, MD, General/Vascular Surgeon, Backus Hospital; Steven L. Bokoff, Managing Partner, Goldblatt Bokoff, LLC; Lee-Ann Gomes, Human Services Director, Norwich Human Services; James M. Kirker, Attorney, James M. Kirker, P.C.

CORPORATORS Dr. Sultan Ahamed Dr. Jan J. Akus Mr. William R. Allen Dr. Matthew D. Amaro  Mr. Timothy S. Ashburner Dr. Tom P. Bell Mr. Neil H. Blinderman Mr. Kenneth J. Capano Sr. Atty. Pasquale A. Cavaliere Mr. Leo M. Chupaska Ms. Susan Howard Cihocki Atty. George A. Comolli Mr. John C. D’Amato Jr. Atty. Donald J. DiFrancesca Ms. Carolyn E. Ferrara Ms. Catherine M. Foley Mr. William E. Geer 16

Mr. Robert C. Giffen Atty. Glenn M. Gordon Ms. Beverly J. Goulet Mr. Stephen M. Greene Mr. William J. Griffin IV Atty. Harry B. Heller Ms. Sharon H. Hewes Mr. DeVol Joyner Dr. Tarik Kardestuncer Ms. Jennifer King Mr. Bruce A. Kirchner Atty. Thomas J. Liguori Jr.  Atty. Harold M. Lubin Mr. John B. Malia Mr. Joseph M. Mastronunzio Ms. Maria C. Miranda Ms. Deborah A. Monahan

Mr. Todd C. Postler  Mr. Mark H. Powers Mr. Robert P. Reed The Honorable Linda M. Salafia, Ret. Mr. Andrew R. Schilke Ms. Susan E. Soderberg Atty. Karl-Erik Sternlof Mr. David A. Whitehead Mr. Charles C. Whitty Ms. Jenny C. Wronowski

HONORARY CORPORATORS Dr. Francis M. Baldino Dr. Michael G. Betten * Mr. Craig F. Bode * Ms. Hazel Judith Brown * Mr. Francis J. Buckley Jr. *

Atty. John A. Cotter Mr. Ralph G. Fargo Sr. Mr. Paul M. Higgins Jr. * Mr. Walter W. Juzwic Ms. Nancy S. Klotz Mr. Clifford P. Kumpf Sr. Dr. Leland D. Loose Ms. Mary R. Miskiewicz Atty. Vincent J. Naccarato * Dr. Ricardo Ochoa Mr. Jerome T. Rogers * Mr. Edward K. Schilke Mr. John M. Smith Ms. Esther B. Williams * Retired Director

DIME BANK 2015 ANNUAL REPORT

PRESIDENT * Nicholas Caplanson, President & Chief Executive Officer SENIOR VICE PRESIDENTS * Joshua Brier, Retail Banking, Sales & Marketing Cheryl Calderado, Human Resources & Training Thomas McAvoy Jr., Trust & Investment Services Brian McNamara, Chief Lending Officer Crystal Sides, Director of Compliance & Internal Audit David Stanland, Chief Financial Officer, Treasurer Johnna Taylor, Chief Credit Officer VICE PRESIDENTS Arthur (Chuck) Barton, Sr. Commercial Lender Robert Buckley, Commercial Lender Elizabeth D’Amato, Commercial Lender Mildred Devine, Trust Officer John Estelle, Commercial Lender Christopher Gauthier, Commercial Lender Andrew Harvey, Information Security Officer Meggan Lynch, Business Development Manager Deborah Malone, Controller Amber Martin, Director of Marketing Kimberly Misenti, Loan Operations Manager Joan Nagle, Branch Administrator Julie O’Connor, Credit Manager Shalin Peck, Deposit Operations / eBanking Manager Shawn Pishka, Operations/Facilities Manager Karen Roman, Sr. Residential Lender

ASSISTANT VICE PRESIDENTS John Belanger, Technology Manager Cheryl Blanchard, Financial Advisor James Burns, Financial Advisor Ted Burrows, Loan Workout & Collections Officer Donna Ceccarelli, Norwich Corporate Branch Manager Laraine Cellucci, Stonington Branch Manager Allison Cone, Operations Administration Officer BethAnn Ericson, Residential Lender Rebecca Frechette, New London Branch Manager John Keating, Finance Officer Peter Lampasona Jr., Retail Operations Manager Jeanne Lussier, Residential Lender Lorie Mocek, Norwichtown Branch Manager Kevin Owren, Westerly Branch Manager Deirdre Sullivan, Executive Admin. & Project Mgr. Catherine Tiffany, Taftville Branch Manager

CORPORATE OFFICERS Karyn Garside, ShopRite Branch Manager Erica Gee, Training & Education Robert Greatorex, Underwriting & Closing Mgr. Ornet Hines, Montville Branch Manager Monica MacNeil, Broadway Branch Manager Colleen Miller, Ledyard Branch Manager Cheryl Morin, Loan Processing Manager Denise Ogden, Commercial Lender Lynn Roberts, Trust Administration Officer Darlene Serra, Benefits & Payroll Manager Heather Smith, Accounting Supervisor

Phyllis Alexander Benjamin Barning Jacquelyn Baudro Deliela Bettencourt Alexander Blais Sandra Blanchard Michelle Boiselle Merve Brielmann Catherine Brosnan Douglas Brown Andrea Bundy Laura Burdick Jennifer Cassella Ovidio Chaparro Stacey Chauvin Cheryl Chmielewski Gina Cote Yvonne Cuenin Nicole Davis Luanne Deer

Indu Jain Paula Jello Nicole Johns Geoffrey Kisby Michelle Kolodziejczak Colette Ladd Sandra Lambert Stefanie LaMotte Jean Lemire Debra Lewis Adam Lozis Sheila Maheu Zachariah Malinowsky Pauline Mandry Melissa Mathieu Tammie McClure Michelle McDonough Mary-Ellen McLaughlin Krista McSparran Jillian Melton

Merlin Rajamohan Brenda Ramesar Melissa Raymond Harry Reed Aaron Rekas Korine Reynolds James Rincon Maureen Rondeau Christina Sanchez Ryan Savage Della Schimmel Cidalia Schott Lynn Semmelrock Mary Shaw Alexandra Smith Geraldine Smith Lauren Sperduto Kathleen Stanley Maryann Stetson Lisa Stott

Christopher DeLucia Luz Dickinson Amber DiGangi Brittany Dolan Diane Eichner Gale Ennis Paul Espinosa Corrie Faille Lory Faille Wendy Fitzgerald John Florence Kyle Fracchia Chelsea Funk Joanne Gagnon Joy Ganci Courtney Gideon Stephanie Gromko Arthur Healey Walter Hewitt Sandra Hill

DIME BANK 2015 ANNUAL REPORT

Wendy Michaud Karen Miller Jeanna Miner Susan Mocek Gabrielle Mohan Ann Moore Cindy Moran Katherine Morano Brandishea Moses Theresa Mullen Tamie Murray Kaitlin O’Connell Josephine Pai Brenda Pappagallo Keona Peake Cibele Pedrozo-Gagnon Allison Perkins Joanne Perras Amber Platt Tracie Price

Kathleen Strenkowski Bryan Sweet Stefanie Sylvestre Karen Talbot Jacqueline Thurman Erin Tirrell Susanne Tracey Rosanne Viadella Michelle Walenczyk Lynn Wallace Matthew Walley Jessica Watrous Ashley Webster Michael Wren Bonny Wydler Mary Youmans Gail Zagarenski Anne Zeppieri

* Senior Team

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FINANCIAL SUMMARY 82.5

85.8

87.8 5 487.

506.4 52

3.

79.4 75.0 2015

4

GROWTH IN DEPOSITS

2014

GROWTH IN CAPITAL

2014

530.

2013

13

2012

2012

20

2011

2011

8

(IN MILLIONS)

.7

553

(IN MILLIONS)

5

201

2015

785.2

2014

756.2

2013

736.1

2012

729.8

2011

707.1

GROWTH IN ASSETS (IN MILLIONS) 18

DIME BANK 2015 ANNUAL REPORT

CONVENIENCE BEYOND LIMITS

COLCHESTER 139 South Main Street Colchester, CT 06415 Opening in 2016

MONTVILLE 563 Norwich-NL Turnpike Uncasville, CT 06382 860.848.0659

NORWICH (Corporate) 290 Salem Turnpike Norwich, CT 06360 860.859.4300

STONINGTON BOROUGH 4 Cannon Square Stonington, CT 06378 860.535.0034

EAST LYME 18 Chesterfield Road East Lyme, CT 06333 860.739.2192

NEW LONDON (Shaw’s Cove) 668 Bank Street New London, CT 06320 860.437.4366

NORWICH (Downtown) 33 Broadway Norwich, CT 06360 860.889.2318

TAFTVILLE 630 Norwich Avenue Taftville, CT 06380 860.887.0554

LEDYARD 744 Colonel Ledyard Highway Ledyard, CT 06339 860.464.8925

NEW LONDON (ShopRite) 351 North Frontage Road New London, CT 06320 860.437.6222

NORWICH (Norwichtown) 115 West Town Street Norwich, CT 06360 860.892.4047

WESTERLY 131 Franklin Street Westerly, RI 02891 401.596.4744

Fiddleheads Food Co-op 13 Broad Street New London, CT

Mystic Aquarium 55 Coogan Blvd Mystic, CT

Norwich Free Academy 305 Broadway | Atrium Building Norwich, CT

ATM ONLY LOCATIONS Backus Hospital 326 Washington Street Norwich, CT Gift Shop & Emergency Department

Also bank with DimeOnLine and the Dime Bank mobile app DIME BANK 2015 ANNUAL REPORT

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