2015 ANNUAL REPORT

ACCESS

FOR YOU

3

I am pleased to share our 2015 Annual Report and news that Guilford Savings Bank (GSB) is thriving, evolving and more accessible than ever. With a successful checking account lineup and recently-expanded customer call center, both dedicated to the brand access, we chose to embrace this theme to describe the past year, and the path ahead.

THRIVING As you will see in the following pages, our financial resources and our human resources are solid and performing well.

While not all ledger items were on par with the preceding year, this outcome was anticipated and accordingly budgeted. Despite the persistent low interest rate environment, sluggish economy, and expenses related to planned capital investments, overall performance was solid and we remain well-above the regulatory definition for a “well-capitalized” bank. A transparent review of our financials can be found on page 9 of this report, but here are a few highlights:

• Net interest income totaled $18.87 million; an improvement of $705,000 or 3.9%. A significant increase in commercial real estate assets, which exceeded budget, was primarily responsible for this improvement.

• Earnings before taxes were $4.4 million. This translated to a return on assets (ROA) of .60% and a return on equity (ROE) of 4.49%; both well above Connecticut Bank peers.

• Total Assets were $621.9 million at year end. This represented an increase of 4.54% or nearly $27 million. Loan balances increased 12.15% to $436.69 million.

• Led by gains in certificates of deposit, savings, interest bearing checking, and demand deposit accounts, deposits grew $16.42 million from year end.

• Capital improved $3.384 million from year end to $82.28 million. The resulting capital-to-assets ratio was 13.23%.

In the third quarter of last year, Financial Management Consulting Group (FMC) ranked GSB fifth among all 41 financial institutions in the State and the highest-rated mutual bank, based on metrics that included asset size, income, asset quality and more. Given that we maintained this identical ranking from the year before, despite market conditions, confirms that on all levels, our vital community resource is well-managed, well-funded and well-positioned for the future.

While our balance sheet is a significant measurement tool, our most important asset is our team. In this past year we were honored to welcome new highly-skilled and highly-sought colleagues to our community of employees, while also promoting from within nearly a dozen individuals who have invested in themselves and the future of our institution.

EVOLVING With a mission to serve the traditional and evolving financial needs of individuals, families and businesses, tradition and innovation are at the heart of our core values. In this year, and for the foreseeable future,

we have made mindful commitments to invest in technology as a growth strategy. Doing so will allow us to expand our market footprint, invite new and more diverse relationships, earn more revenue and support our community through outreach and philanthropic donations.

We have tempered this growth in technology and geography with a renewed commitment to our traditions. While making it possible to apply for a mortgage from the comfort of your kitchen counter, we are also accessible to those who prefer face-to-face conversations with an experienced banker.

MORE ACCESSIBLE THAN EVER Whether sitting next to a member of the GSB community who is volunteering as part of the 11,500 hours of community leadership time, or visiting a recently refurbished and exceptionally comfortable

branch location, you understand that “access” has many definitions for this mutual bank.

From leading-edge technology to a compassionate team, we are honoring our multi-generational history, while preparing for the generations that follow. I invite you to read more in this brief but compelling, report, and I welcome your call or email at any time to learn more. You will find both, below my signature — because access, begins with me.

Warm regards to the community we serve,

Timothy P. GeelanPresident & CEO

TGeelan@GSByourbank.com(203)458-5456

FROM OUR CEOWELCOME

5

Being a community bank means making resources accessible to the community we serve. While this may happen through the expected business model — loans, accounts or investment advice — it is in

our mission as a mutual bank to do more; much more.

Through financial resources and human resources, we expanded our philanthropic impact to more than 260 organizations throughout our primary market. Direct donations of $250,000 were paired with more than 11,500 hours of community service, provided by our outstanding

“CommuniTeam.”

These donated hours are equivalent to the efforts of six full-time employees over a one-year period of time. Not only does this represent significant labor cost savings for the non-profits where

we serve as board members and volunteers, these organizations also have access to highly skilled, talented people in the areas of finance, technology, operations, human resources, customer service

and more. As a result, we helped advance non-profit values while also advancing the development of our colleagues. In addition to the donation of their time and talents, GSB employees also engaged

in philanthropic donations, maximizing their gifts through GSB’s Matching Gift Program.

While discussing community gifts, it’s appropriate to reflect on our commitment to improving our branch locations as a community investment. Following the successful renovation and launch of our Madison location, we focused our attention on refurbishing our flagship location on the Guilford Green. At a time when our peers

are closing locations and leaving empty storefronts, GSB invested $2 million with local contractors and vendors, preparing our corporate office for the next generation of bankers and banking customers.

Whether underpinning the foundation of our mission through volunteerism and philanthropy or physically reinforcing the foundation of our corporate office, we are truly invested in being

accessible resources for the families and businesses we serve.

TO RESOURCES ACCESS

“The improvements to our location on the Guilford Green took two years of careful consideration, stewardship and community engagement. While improving the necessary modern banking experience that integrates technology with accessibility to our universal bankers, we sought to improve functionality, the physical condition of the building, maintain its stately presence on the green.”

— RENEE PALLENBERG, SVP, RETAIL BANKING & MARKETING OFFICER

7

In 2015, GSB provided more than $45 Million in new commercial loans throughout the state resulting in net growth of over 14%, year-over-year. Not only did we achieve strategic goals of total loan growth and loan portfolio diversification, we also continued to expand our footprint statewide.

“This should not imply that we sacrificed our long-standing relationships to pursue new opportunities,” conveys Lyle Fulton, SVP, Commercial

Loan Officer, a 30-year veteran in commercial lending and two-year team member with GSB. “A greater number of these loans happened

among the small businesses in the primary towns we serve. Large projects outside of our branch footprint allow GSB to increase earnings and accessibility to funding.”

Most notably among loan portfolio growth was the number of commercial real estate projects that successfully moved forward. Whether they be apartments, elder housing or well-positioned sub-divisions, GSB has been early to these market opportunities, well before other lenders. As a result, we are firmly positioned as reliable experts in our review and understanding of these loan packages. We are enjoying the benefits of peer referrals and

secondary market opportunities, such as residential mortgages, or construction mortgages as consumers seek to purchase from our developer clients.

“Without a doubt, this is a competitive banking market. From commercial loan clients to checking account customers, there are many options to choose from,” concludes Lyle. “What sets GSB apart is our access

— not only direct access to experienced commercial lenders, but access to banking leadership that readily will visit a project site and become involved in the decision making process. Without a doubt the market is responding to the fact that we don’t rely solely on a computer model to make our decisions — we use experience, expertise and common sense.” ACCESS

GROWTH THROUGH

“In reality all banks are selling a commodity — money — that means projects like this will go to institutions that differentiate themselves. For GSB, that difference was clear — accessibility. The bank has local decision-makers and a strong understanding of our needs.

When you find a bank that works with and for you, it can make all the difference.”

9

ASSETSOn December 31, 2015, total assets were nearly $622.0 million, representing growth of $26.9 million, or 4.5% from 2014.

LOANSThe Bank supports the community by reinvesting funds in commercial and consumer loans. Our loan port-folio grew by $47.3 million, or 12.2%, to $436.6 million on December 31, 2015. Commercial and residential real estate loans grew by $34.1 and $9.6 million, respectively. Asset quality remained strong, with nonperforming loans of $3.7 million, or 0.86% of total loans, on December 31, 2015.

DEPOSITSDeposits ended 2015 at $478.5 million, an in-crease of $16.3 million from 2014, with growth primarily in time deposits and checking accounts.

CAPITAL & EARNINGSGSB’s capital position at the end of 2015 remained strong at $82.3 million, with a total tier 1 leveraged ratio of12.96%, over twice the level recognized by the FDIC as well-capitalized. Our 2015 net income was $3.7 million, which exceeded our budgeted projections and significantly augmented our capital position.

SECURE. REINVESTED.ACCESSIBLE.

CONDENSED STATEMENT OF CONDITIONDecember 31, 2015

ASSETS (in thousands)Cash & Interest Bearing Deposits $8,964Investment Securities, Available for Sale 139,386Loans Receivable, Net 432,383Bank-Owned Life Insurance 19,092Premises & Equipment 12,601Other Assets 9,524

Total Assets $621,950

LIABILITIES & CAPITAL (in thousands)Deposits: Noninterest Bearing $406,885 Interest Bearing 71,594 Total Deposits 478,479Other Liabilities Repurchase Agreements 6,525 FHLB Borrowings 47,698 Other Liabilities 6,939 Total Liabilities 539,641

Capital 82,309

Total Liabilities and Capital $621,950

2011$150

$200

$250

2012 2013 2014 2015

$300

$350

$400

$450

$500

2011$300

$350

$400

2012 2013 2014 2015

$450

$500

$550

$600

$650

2011$100

$150

$200

2012 2013 2014 2015

$250

$300

$350

$400

$450

$1

$02011 2012 2013 2014 2015

$2

$3

$4

$5

PGSBPEER GROU

2011 2012 2013 2014 20150.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

11

Whether leading-edge technology and digital resources, or fully-renovated branch locations and expanding products, ultimately the banking experience is defined by the people behind these

resources. Mindful that talent is key in establishing long-term banking relationships, GSB seeks to be an employer of choice in well-defined ways, attracting and retaining the best and the brightest to a team of just over 100 banking professionals.

First and foremost, we seek to promote within, and the number of employees who received internal promotions this past year was more than double the new, external hires. Through tuition reimbursement

programs and fully-supported continuing education opportunities, we grow our team and our institution through self-investment.

In addition, we balance and supplement growth from within through strategic hires for specific skill sets. Whether a long-standing commercial loan officer or proactive banking technologists, we understand that the limited size of our team mandates that each and every individual be exceptional in what we define as PEAK

— Performance, Engagement, Accountability and Knowledge.

We believe in being a community bank, not a complacent bank. This means that colleagues with decades of experience are committed to remaining current with their skills and that we maintain a culture that

is inviting to the next generation of quality bankers.

Culture is more than just the work we do, however. It’s the skills we build, the relationships we form, and the fun we have when we’re not working. Over the past year, dozens of individuals reached for more by taking classes through industry organizations, in bachelor’s and master’s programs, or by obtaining certifications that help them grow.

The long-lasting relationships we form out of the office are powerful, and help us work together to better serve our community. Whether our teams trained for their first marathon, played a game of kickball or brought their families together to enjoy a baseball game, their camaraderie coupled with innovation and expertise make GSB a premier place to work.

“I came to GSB in 2014 because I saw the direction the bank was going with its approach to technology and wanted to be a part of it. Our industry is facing tough challenges, but the opportunity to be part of an organization well positioned for success was exciting. Here, I can be part of the big picture and work face-to-face with colleagues to break down barriers and make a meaningful impact.”

- ANNE TEDSTONE, SVP, BANKING TECHNOLOGY OFFICER

TO THE BEST & BRIGHTEST

ACCESS

13

GSB offers access to sound, trusted expertise — whether the need is retirement planning or more-established capital preservation. We believe we offer a vital alternative to larger wire houses or big

financial institutions for consumers seeking truly custom and personalized approaches to their investment needs. And, we know the need is great — 40% of the “boomer” generation is without

any retirement savings and a declining percentage is confident that retirement is an option. Our goal is to address this significant gap, while helping the “millennial” and other younger generations avoid the same mistakes.

Clearly, our approach is working. Since acquiring a majority interest in ARIA nearly five years ago, assets under management have doubled. We anticipate continued and significant growth in these service lines as GSB seeks to position ourselves at the center of our customers’ financial needs.

We envision a relationship between the customer and our community bank that seamlessly evolves to meet growing and changing needs

— from a customer’s first checking and savings account, to home ownership and asset management. Our bankers are a united team, anticipating financial needs and stepping in to refer customers to the right internal resource at the right time.

Unlike our larger peers, who are driven by shareholder interests our priority is to meet the needs and wants of our customers. Whether transactional-based solutions or estate management and planning with

our wealth management associates, clients have access to decades of experience under the trusted umbrella of long-standing community bank.

ARIA is a separate subsidiary of The Guilford Savings Bank. ARIA is a registered investment advisor and makes investment recommendations that involve products that are not Bank deposits, are not guaranteed by the Bank, and involve investment risks, including the possible loss of principal.TO EXPERTISE

ACCESS

“2015 was a challenging year for the stock market after the long run up from the 2009 lows. Major U.S. stock market averages ended up essentially flat for the year, however the average stock was down and in many cases more than 20% from prior 52 week highs. This is often a precursor of a deeper correction or even a bear market itself, where the averages fall more than 20% from recent highs. The

job market is strengthening and wages are finally picking up steam. Interest rates continue to be historically low. Such a back drop may allow for stocks to finish the

year in positive single digit territory, despite worries ranging from tepid global economic growth to the coming presidential election.”

— DEBORAH ABILDSOE, ARIA FOUNDER

15

BEGINS TODAYPROVIDING GREATER ACCESS, At a time when more than 64% of American adults own a smart phone,

and nearly 60% of these phone owners use the device for banking purposes*, it’s obvious that the future of banking is taking shape, today.

Recognized by the national industry publication, Independent Banker Magazine, for our approach to digital banking and customer acquisition through the digital channel process, GSB is firmly committed to providing

greater access to banking, through technology.

To that end, our former Call Center, now named Access Banking Center, manages all customer support calls for traditional and virtual banking services. With expanded hours that offer support until

8PM on weekdays, an easy-to-use live chat feature, and staff with operational and sales training, the Access Banking Center is prepared to accommodate a higher-level of sales and support expectations.

Our team is easily accessed through the Bank’s newly revamped website which has migrated from a digital brochure into a robust sales tool to enhance existing relationships and develop new ones.

As banking preferences continue to migrate from physical to digital transactions and mobile banking, GSB made numerous upgrades to

improve mobile banking functionality. By streamlining Mobile Check Deposit and Bill Pay, enabling online banking registration through the Bank’s App, and accommodating quicker user authentication with

iPhone TouchID, the Bank witnessed rapid consumer transition to this channel. By the close of 2015, more than half of all online banking logins occurred via a mobile device.

Advancements in technology not only helped retain customers, it also drew new relationships. In fulfilling the objective to provide customers with a remote banking channel that simulates the branch experience, we launched our Online Account Opening service in early 2015 and deposits obtained from this channel totaled $7.5 million at year end.

On average, customers acquired through this channel had a notably higher amount of services and account connections with the Bank than those opened by traditional means — proving, without a doubt, that greater access, retention and profitability, begins today.

*Pew Research Center, U.S. Smartphone Use in 2015

“We’re at a unique point in our industry where the race for the best technology and the best people are neck-and-neck. Our technological advances break down barriers that community banks previously faced, most notably the ability to transact anytime, anywhere. At

the same time, this shift has increased the level of service our customers expect from our people, both in the quality of expertise and the availability of our staff beyond normal business hours. Pairing people and technology together allows us to leverage our size to create a unique experience unmatched by our peers.”

- KYLE EAGLESON, EVP & COO

17

2015 CORPORATE OFFICERSTimothy P. Geelan President & CEORobert L. Carmody, 1st EVP Chief Lending OfficerKyle J. Eagleson, EVP Chief Operating OfficerHeather P. Hackley, EVP Chief Financial OfficerLyle Fulton, SVP Commercial Loan Origination ManagerPeter E. Muszynski, SVP Senior Credit & Commercial Loan Admin. OfficerRenee B. Pallenberg, SVP Retail Banking & Marketing OfficerBette-Lou Rush, SVP Commercial Cash & Deposit Product Manager Anne Tedstone, SVP Banking Technology Officer Christine Beirne, VP Human Resources Director Connor Dolan, VP Financial AdvisorDavid Finnerty, VP Senior Operations Officer Mark Jenusaitis, VP Commercial Loan OfficerMichael D. Paz, VP Commercial Loan OfficerJanet P. Sandella, VP Market Manager, MadisonMichael Storiale, VP Digital Banking ManagerSteven G. Supernaugh, VP ControllerKeira Cervoni, AVP Branch Manager, Branford Maria Cusano, AVP Compliance OfficerRichard Davis, AVP Branch Administration OfficerMichael J. DeBlieux, AVP Finance Manager James Gannuscio, AVP Operations MangerTodd Konnik, AVP Senior Credit Analyst Lisa LeMonte, AVP Community Development OfficerBryan J. Mierzejewski, AVP Network ManagerAbigail S. Patrizio, AVP Day-to-Day BSA OfficerChip Poehnert, AVP Residential Sales ManagerBarbara Potter, AVP Loan Servicing Manager Heidi Samuelson, AVP Market Manager, Main Office Greg South, AVP IS ManagerElizabeth Vincenzi, AVP Residential Lending Supervisor

ARIADeborah Abildsoe FounderBrant Walker Vice President

2015 BOARD OF TRUSTEESCharles L. Havrda, ChairmanBarbara L. Truex, Vice ChairmanWilliam A. ChildressStephen J. DowlerTimothy P. GeelanRichard A. GentileWilliam W. LeeMargaret Y. LivingstonSandra J. RuoffPaul Sullivan, Jr.

2015 BOARD OF CORPORATORS(INCLUDES THE BOARD OF TRUSTEES)

Christopher BalestracciDavid M. BrownPhilip CarloniRobert L. CarmodyRyan DuquesVaughn C. KnowlesHawley W. Lincoln, IVMark D. MatloszSamuel McKnight, Jr.Jody L. PaviglioniteLiza J. PetraThomas J. RichardsonJeffrey E. VailetteAnthony A. Valentino

CORPORATOR EMERITUSH. Logan Page, III

INDEPENDENCE: Remaining a strong, mutual financial institution engaged with the community we serve.

COMMITMENT: Through meaningful philanthropy of financial resources and human resources, we are catalysts in improving the quality of life for our neighbors.

TEAM DEVELOPMENT: Recruitment, retention and reward of a strong and compassionate team through a culture that encourages empowerment and growth.

RELATIONSHIPS: With integrity and earned-trust, we build long-standing relationships as a result of consistent, service excellence.

CREATIVITY: Through shared ideas, continuous improvement and leadership, we invite new thinking that responds to and anticipates needs.

STEWARDSHIP: Aware we are a community institution, not only a financial institution, we invest wisely in ourselves, others and tomorrow.

OUR CORE VALUES

19

MIKE STORIALE: 2015 THINK TANK INNOVATION FINALIST

— Digital Insight

Recognized nationally as one of five finalists, Mike presented his concept at DI’s annual

Innovation Conference on October 7th in Austin, TX to an audience that included a panel of technology innovators and digital banking professionals.

CONNOR DOLAN: 2015 FIVE- STAR PROFESSIONAL AWARD

—Connecticut Magazine

Presented to wealth management professionals throughout the U.S. and Canada, the Five Star award recognizes service professionals who provide quality services to their clients.

SUE BRADY: 2015 VAL KARLAWICH DISTINGUISHED

SERVICE AWARD — Shoreline Chamber of Commerce

The Val Karlawich Distinguished Service Award recognizes individuals who are making a significant impact in the Branford and Guilford communities.

LISA LEMONTE: 2015 THE BEACON AWARD

— Shore Publishing

The Beacon Awards recognize a few of the outstanding individuals who selflessly step up to

help fulfill the shoreline community's promise as a place of opportunity, well- being, and safety for all.

2015 BEST END LOAN PACKAGE FOR A COMMUNITY

— HBRA of Connecticut, Inc.

The HOBI Awards is the state’s most prestigious housing industry program,

recognizing excellence in new construction, land development, remodeling,

sales and marketing, and home financing.

2015 BAUER FINANCIAL SUSTAINED SUPERIORITY

AWARD

Given to the top 10% of banks nationwide

in areas of capital, profitability, and asset quality. We’ve

been awarded for 26 consecutive years!

AWARDS

11,500 VOLUNTEER HOURS

SEVENBRANCHES

$250,000DONATEDto the local community in 2015

$14

,000 EMPLOYEE CONTRIBUTIONS

MATCHED BY THE BANK

$22,000IN

HIG

HER ED

UCATIO

N

SCHOLA

RSHIP

S ANNUALLY

$40,000

DONATED TO LOCAL

COMMUNITY FOUNDATIONS

60 NON-PROFIT BOARDS OF DIRECTORS( = 10 PEOPLE) 4.5% TOTAL

ASSET GROWTH 2014-2015

15,000 CUSTOMERS ( = 1,000 PEOPLE)

109 DEDICATED TEAM MEMBERS ( = 10 PEOPLE)

$46M

ORIGINATED IN COMMERCIAL LOANS IN 2015

DOZENS OF CUSTOMIZABLE

SOLUTIONS

APPROX. $167M

ASSETS UNDER MANAGEMENT ADVISEMENT

10 WAYS TO MANAGE YOUR MONEY FROM ANYWHERE

260 COMMUNITY ORGANIZATIONS SUPPORTED