Financial Reports

[2009 Six Month Letter] [2009 Six Month Statement] [2008 Executive Summary] [2008 Statement of Income] [2008 Statement of Condition]

June 30, 2009

Neighbors helping neighbors is a tradition in Maine and at Bath Savings Institution. We realize the importance of having a vibrant and strong local economy, not just in our state but also in our hometowns. As a local bank we invest our depositors’ funds right here in our community through loans to individuals, businesses, non-profit organizations, and neighboring cities and towns. We take that local commitment one step further with our Neighbor to Neighbor Program.

When you open a new environmentally friendly eChecking account with us, we give you a $10 Neighbor to Neighbor Gift Certificate to redeem at a local business that banks with us. We also donate $25 to a local participating non-profit organization. It’s another way we use our financial strength to help keep our local economy strong.

Our strength begins with safety and stability. In the first half of 2009 Bath Savings Institution was once again recognized as one of the safest banks in the country, earning the top 5-star superior rating from Bauer Financial. We have earned this distinction for nearly 80 consecutive quarters, a record that can be claimed by less than 10% of the nation’s financial institutions. Our financial results for the first six months of 2009 show why:

Net income ended the period at $2.3 million, a 25% improvement over the same period in 2008. Customers continue to trust Bath Savings Institution, and our deposits have grown to over $376 million. So far this year we have originated more than $151.7 million in new loans throughout our region, with $105 million of that total in home mortgage loans. Many of these loans were refinanced, allowing customers to reduce their monthly payments, which provides additional funds to save or spend — further stimulating our local economy. While we have customers who are struggling through these tough economic times, our delinquency rate is well below both national and state averages. We continue to work with all our borrowers who are committed to achieving a positive outcome.

Total assets ended June at $514 million with equity capital of over $51 million, a capital ratio of 10%, which is the sign of a safe, strong and stable financial institution. Our capital continues to be more than twice what Federal and State of Maine regulators require to be considered “well capitalized”. As a mutual organization we have no shareholders. We retain all our profits to reinvest in the bank and our local communities.

You can depend on us to continue to use our financial strength to help keep our hometowns strong.

Sincerely,

Glenn L. Hutchinson, President & CEO