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The Clock TowerConneCtion

NEWS AND UPDATES FROM THE INSTITUTION FOR SAVINGS FALL 2013

Proud to be named #1 medium emPloyer

For the sixth consecutive year the Institution for Savings

has been named one of The Boston Globe’s Top

Places to Work, this year achieving the very top spot as the #1 Medium Employer in Massachusetts! This prestigious award, announced recently at a reception hosted by The Boston Globe at the Seaport Boston Hotel, was featured in the Top Places to Work 2013 magazine distributed to Boston Sunday Globe readers on November 17th. Online, the report can be found at www.boston.com/topworkplaces.

2008 2009 2010

TOP PLACES TO WORK

2011

6 YEARS RUNNING20132012

in this issue Named #1 Medium Employer ........... 1Letter from President ........................ 2Trustee Retires ................................... 2Charitable Foundation Update .......... 3Topsfield Office Exceeds Expectations ...................................... 3Pink Glove Dance Video .................... 4Bank’s Renovation Design Award ...... 4MGH Honors Bank ............................. 4Recognizing The Forgotten War ........ 4IFS in the Community ........................ 5New IFS Faces .................................... 5Personal Online Banking Security...... 6Corporate Account Takeover ............. 7

As a mutual savings bank we are proud of the fact that we are owned by our customers and answer only to you, not stockholders or Wall Street analysts. “We believe that the most successful companies today are the ones that place a significant value on trust and respect,”said Michael Jones. “Here at the Institution these are principles that are deeply ingrained in everything we do.” Our long-standing reputation for excellence—as a Bank and as an employer—begins with our exceptional employees. We are grateful to them for making the Institution for Savings such a great place to work. Equally important we thank you, our valued customers, for inspiring us to serve your banking needs today, and into the future.

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letter from the President & CeoWe are pleased to report that our net income through October 31, 2013 was $22.1 million resulting in a return on assets of 1.79 percent. This is the highest net income recorded in the Bank’s 193 year history and there are still two months remaining in the year!

Here are a few financial highlights and projections:

As illustrated above our net income through October 31st increased $7.3 million or 50 percent over prior year. Our year-end net income projection of $24.5 million represents an increase of 42 percent compared to our prior year net income. These financial results will once again be in the top 95th percentile for banks in Massachusetts!Newsletter highlights include: the 2013 Boston Globe’s Top Medium Sized Employer, the Bank’s charitable donations and community involvement and a lengthy section devoted to personal and corporate security.On behalf of the Institution for Savings, I want to wish you and your family a happy and healthy holiday season.

Sincerely,

Michael J. JonesPresident and CEO

This is the highest net income

recorded in the Bank’s 193 year history

and there are still two months remaining

in the year!

Balance Sheet 10/31/2013 10/31/2012 $ Increase % IncreaseTotal assets $1,642,574,000 $1,389,413,000 $253,161,000 18%Total residential loans $893,320,000 $756,211,000 $137,109,000 18%Total commercial loans $144,953,000 $117,780,000 $27,173,000 23%Total deposits $1,304,228,000 $1,129,393,000 $174,835,000 15%Total capital $213,230,000 $181,756,000 $31,474,000 17%

Year-to-date $ Increase % IncreaseIncome Statement 10/31/2013 10/31/2012 $ (Decrease) % (Decrease)Total operating income before taxes $10,859,000 $11,641,000 ($782,000) -7%Total gains on sales of securities $20,472,000 $9,497,000 $10,975,000 116%Charitable Foundation Contribution ($1,402,000) ($1,440,000) $38,000 3%Total income tax expense ($7,822,000) ($4,936,000) ($2,886,000) -58%

Net Income $22,107,000 $14,762,000 $7,345,000 50%Net Operating Income $9,307,000 $9,183,000 $124,000 1%Profitability Ratios

Total capital to average assets 13.24% 13.09%Return on average assets 1.79% 1.30%Efficiency ratio 62.23% 58.88%Interest rate spread 2.19% 2.38%

Year-to-date Year-End Projections 12/31/2013 12/31/2012 $ Increase % IncreaseNet income $24,500,000 $17,228,000 $7,272,000 42%Return on average assets 1.64% 1.28%

Jonathan Woodman Longtime Trustee Retires

We would like to express our heartfelt gratitude and best wishes to longtime Trustee Jonathan Woodman who retired from the Board in November. The founder of Woodman Associates Architects in Newburyport, Jonathan joined the Board in 1979 and has been a tireless advocate and resource for the Bank.

Charitable Foundations Donations and PledgesThe Institution for Savings, through its two charitable foundations, donated and pledged $1.6 million through the first 10 months of 2013. The largest gift was a $500,000 pledge from the Institution for Savings Charitable Foundation to the Salisbury Public Library Capital Campaign to contract a new state-of-the art library and media center in the Town’s center. The 2 Depot Square Ipswich Charitable Foundation donated $50,000 to the Friends of Ipswich Elementary Schools to construct a new playground at the Winthrop Elementary School.

After opening its doors just a little more than six months ago, the Institution for Savings’ newest banking office located at 5 Main Street in Topsfield has already exceeded $50 million in deposits. This milestone is particularly impressive given the growing national trend for banks to close offices rather than open new ones. “While we enthusiastically embrace and encourage alternative banking channels such as internet and mobile banking, I firmly believe that conveniently located banking offices continue to be important to our customers. That certainly has proven true in Topsfield,” said Michael Jones. “As a mutual savings bank, our true commitment to our communities extends far beyond profits.”

1st Lt. Derek Hines Soldiers Assistance Fund2 Depot Square Ipswich Charitable Foundation ScholarshipsAhavas AchimAll Saints Anglican ChurchAmesbury Police Department K-9 UnitAmesbury Public Schools & Windrush FarmAmesbury Senior CenterAmesbury Youth Basketball LeagueAnna Jaques HospitalBelleville Congregational ChurchBest Foot ForwardBeverly School for the DeafBoys & Girls Club of Lower Merrimack ValleyBright Happy PowerCape Ann Farmers MarketCentral Congregational ChurchChristmas in July 5KChristmas Tree SantasCoastal Connections, Inc. Congregational Church Restoration & Preservation AllianceDowntown Newburyport Enhancement Team, Inc.Elder Services of the Merrimack ValleyEssex County Greenbelt AssociationEssex County Trail AssociationEssex HeritageFirehouse CenterFriends of Ipswich Elementary SchoolFriends of Ipswich Public LibraryFriends of Newburyport Clippers and Triton Vikings Hockey

Friends of Newburyport Public LibraryFriends of Salisbury Council on AgingGeneral Charitable Society of NewburyportGirl Scouts of Eastern MAGreater Newburyport Pan Mass Challenge Kids RideGroveland Recreation CommitteeHarborlight Community PartnersHaverhill High School Model United NationsHAWCHistoric New EnglandHorizon ClubIFS Charitable Foundation ScholarshipsImmaculate Conception School North Pole ExpressIpswich Cultural CouncilIpswich Dinner BellIpswich Education FoundationIpswich Family YMCAIpswich High Class of 2014Ipswich High School Football BoostersIpswich Junior Sailing ProgramIpswich Little LeagueIpswich River WatershedIpswich Rotary Charitable TrustIpswich Rotary ClubJeanne Geiger Crisis CenterJoppa Flats Running ClubLowell’s Maritime FoundationLOXMasonic Medical Research LaboratoryMassachusetts General Hospital Cancer Center

Maudslay Arts CenterMerrimack River Feline Rescue SocietyMerrimack Softball LeagueMerrimack Valley Economic DevelopmentMerrimack Valley TownsmenMuscular Dystrophy AssociationMusic at Eden’s EdgeMusic for MusicNewburyport Adult & Community EducationNewburyport Art AssociationNewburyport Chamber Music FestivalNewburyport Community Media Center Newburyport Education FoundationNewburyport Girls Basketball AssociationNewburyport Maritime SocietyNewburyport PTONewburyport Rotary ClubNewburyport Youth Services, Inc.New England Exchange Club FoundationNewton Rotary ClubNorman L. Quint ScholarshipsNortheast Massachusetts Youth OrchestraOne Fund BostonOpportunity WorksOur Neighbor’s TableOvations for the CurePan Mass ChallengePentucket Arts FoundationPentucket Education FoundationPentucket Lacrosse League

Pentucket Youth FootballRazz MaDazz/Destination ImaginationRotary Foundation DAFRowley Public Education FundRowley Youth BaseballRupert A. Nock Middle SchoolSalisbury Public Library Capital CampaignSt. Basil’s KitchenSt. Vincent DePaul SocietyThe Actors Studio of NewburyportThe Cassidy Brown FoundationThe Muddy Leprechaun Mud RunThe Pettengill HouseThe Salvation ArmyThe Trustees of Reservations The Crane EstateTopsfield Historical SocietyTown of IpswichTown of Newbury Border to Boston TrailTravis Eliot Landreth Memorial Scholarship FundTriton Babe Ruth LeagueTriton Regional High School Robotics ProgramTriton Regional Middle School 21st Century ProgramsTurning Point, Inc.Wenham MuseumWest Newbury PTOWinner’s Circle Running ClubYankee HomecomingYMCA of the North Shore

toPsfield offiCe exCeeds exPeCtations $50 million in dePosits in 6 months

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Pink Glove Dance

reCognizing the forgotten WarLocal veterans gathered with representatives from the Institution for Savings to dedicate the new Korean War Veterans Memorial on Veterans Green in Topsfield. The Bank donated funds for the monument which recognizes the ‘Forgotten War’ in

which 44,000 Americans were killed. The Memorial also honors the only Topsfield casualty, PFC John Anthony Steline.

Pictured (l-r) Henry Steline, brother of PFC John Anthony Steline; Ryan Burke, West Point Military Academy Class of 2017; Dave Comeau, Commander, Topsfield American Legion; Paula Burke, mother of Ryan Burke; Norm Eisler, Topsfield Historical Society; Mike Jones; Kim Rock and Suzanne Bradford, Topsfield Office Manager.

It’s always been known that Institution for Savings employees

are professional, knowledgeable and customer-service oriented – but who knew they could dance, too? This past October, Anna Jaques Hospital invited our Bank along with several other community groups to collaborate on Medline’s Pink Glove Dance Contest, a national video competition project. Caregiving organizations from across the country competed to win $25,000 by creating and entering a 90 minute dance video wearing pink surgical gloves. Why pink gloves? Pink gloves and the hands that fill them are the perfect metaphor for support and strength of community, as well as the skilled hands of the medical professionals whose passion drives patient care. More than 70 bank employees, family members and IFS’s own amazing cancer survivors participated in the taping. The video garnered more than 20,000 votes from the community and placed fifth nationally.You can view Anna Jaques 2013 Pink Glove video entry at pinkglovedance.com.

mgh honors bank’s ComPassion and suPPort

IFS officers Mike Jones, Kim Rock and Tricia Ferguson were honored earlier this year at the sixth annual celebration of theonehundred in Boston. theonehundred is Massachusetts General Hospital Cancer Center’s annual fundraiser, honoring 100 individuals and groups whose diligence and discoveries, philanthropy and passion have helped advance the fight against cancer. Funds raised at the gala support research, patient care, education and community outreach programs.

Mike, Kim and Tricia were nominated by long-time lending office employee Ellin McSweeney who several years ago was diagnosed with cancer. Not long afterward, Ellin’s husband was also diagnosed with cancer. Through Ellin’s months of treatment and tireless efforts to combat her disease and care for her husband, the Bank supported her with flexible scheduling, as well as assisting her in other ways during a very difficult time. Ellin’s story was one of three that was highlighted at the event. These stories and Ellin’s nomination can be found at theonehundred.org.

bank’s renovation design Wins aWard

The Storey Avenue Office recently underwent major renovations which culminated in award winning results for the contractor Windover Construction of Manchester, MA. The Builders and Remodelers Association of Greater Boston (BRAGB) presented Windover Construction with the 2013 Prism Gold Award for Best Commercial Project.

This prestigious award celebrates the best in building and design from the region. According to Windover Vice President Stuart Meurer, the judges were impressed with the facility’s before-and-after images as well as the remarkable transformation that resulted during construction while the Bank remained open and fully operational. This is the fourth project Windover has undertaken for the Bank.

Photograph by Shelly Harrison

This year’s $15,000 Institution for Savings and 2 Depot Square Ipswich Charitable Foundation Scholarship recipients posing with Mike Jones (back) are (l-r), Tyler Corning, Ipswich High School; Anh Uong,

Masconomet Regional High School; Lindsay Ford, Newburyport High School; Stephen Levesque,

Triton Regional High School and Michael McCarron, Pentucket Regional High School.

Salisbury Office Manager Bruce Macdonald served as co-chair of the Salisbury 375th

Anniversary Event. Pictured here with volunteer IFS employees Michelle Mahair and Judy Julian.

The Bank hosted the original 1960’s Batmobile at our State Street Office as

part of the 2013 Cruisin’ the 50s Night in downtown Newburyport. Donations were

given to the Boys & Girls Club of the Lower Merrimack Valley.

Jane Albert

Marketing Coordinator

Elizabeth Brennan

Teller

Christopher Campbell

Teller

Merissa Fulchino

Teller

Mary GauvainMasco

Educational Teller

Jennifer Jones

Deposit Services Rep

Pamela LannonTeller

John LeBlancVP Loan

Operations

Michael ManniTeller

Steven Preston

Teller

Megan Webel

Assistant Manager

County Road

Aubree WollitzTeller

Karl WilsonSenior Vice President Commercial Lending

Salisbury’s 375th Anniversary

Bank Awards $75,000 to High School Scholarship Recipients

Cruisin’ the 50s Night

Join us in welcoming Karl R. Wilson as the Bank’s

Senior Vice President of Commercial Lending. With nearly 30 years of lending

experience primarily on the North Shore, Karl has managed

corporate loan portfolios in excess of $55 million. The skills and knowledge Karl brings are

a great addition to our strong lending team.

With E-Statements you conveniently receive checking, savings, money market, mortgage, and overdraft protection account statements and notices electronically, rather than in the traditional paper format!

• GREEN... good for the environment.

• FAST... receive your statements right away.

• SIMPLE... eliminate the clutter of paper statements. Store and retrieve past statements right on your own computer.

• SECURE... most identity theft occurs through the mail or by improperly discarded paper documents. With E-Statements you have control over your own information.

• FREE... costs you nothing to switch to E-Statements.

Enrolling in E-Statements is easy!

Call 978-462-3106 or 978-356-3600 or stop by any Institution for Savings office to enroll.

Have yourfree pHoto taken witH

Santa and MrS.

ClauS Saturday

December 14 10 am-12 Noon

93 State Street, Newburyport

or 112 County

Road, Ipswich

Reindeer food, chocolate coins and more!

Green. Simple. Secure. Fast. FREE.

E-Statements

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At the Institution for Savings, safety and security of your personal information are among our highest priorities. We regularly update our systems with the latest, most advanced firewall and encryption tools to keep your information safe at all times. Banking online is a safe and convenient way to conduct your banking business. But criminals who want to gain access to your personal and financial information are turning more and more to computers and smart phones as a way to gain access. The vast majority of cyber thefts begin with the thieves compromising your computer(s) and monitoring your email messages and online activities for days or weeks prior to committing the crime.

Ways to protect yourself:• Use strong passwords.• Don’t use the same ID and PIN/Password for every online account you have.• Secure your mobile devices with a password.• Use anti-virus software/firewall protection. Allow for automatic updates and scheduled scans.• Don’t reply to emails that claim to be from your bank requesting account details.• Do not open attachments from suspicious emails.• Report suspicious activity to the Bank.

Warning signs that your system/network may be compromised:• Dramatic loss of computer speed;• Changes in the way things appear on your screen;• Computer locks up or unexpectedly restarts;

• Unexpected request for a one time password (or token) in the middle of an online session;• Unusual pop-up messages in the middle of a session such as “your Bank connection is not working”; • New or unexpected toolbars and/or icons; and

• Inability to shut down or restart.

What we do to keep your financial information safe:Advanced Data ProtectionOur firewalls act as a shield between the web and our internal systems, ensuring our internal records are safe and enabling us to regularly monitor sign-ons, sign-offs, and access violations while maintaining complete privacy.

Strong EncryptionOur system automatically encrypts your information, rendering it unreadable during transmission.

Specific Sign-on RequirementsOur online banking settings require you to create a unique combination of letters and numerals.

Ongoing, Built-in VigilanceWe employ state-of-the-art virtual watchdogs to work on your behalf, continually monitoring your account(s) for any suspicious activity. If any unusual patterns of activity are noticed you will be asked to authenticate your account.

If you know or have any reason to suspect your computer may be compromised, contact the Bank immediately to have your Internet Banking login disabled to avoid theft.

Personal online banking seCurity

Introducing the banking gold standard for finanCial fraud ProteCtion

One out of every four personal computers in the United States is infected with some sort of malware. That’s more than 59 million affected computers nationwide! Because our primary concern is for the safety and security of our customers’ information, we have recently partnered with Trusteer to bring you a free security software called Rapport designed to make your online banking and shopping even more secure. More information will be available in January 2014. Rapport’s key benefits include:• Immediate protection upon installation• Blocks advanced online malware threats

• Identifies possible phishing scams• Works with both Windows and Mac

Banking online is a safe and convenient way to conduct your banking business. But criminals are turning more and more to computers and smart phones as a way to gain access to your personal information.

• Complements other security software

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Corporate account takeover is a type of corporate identity theft in which cyber thieves steal businesses’ valid online banking credentials or hijack browser sessions to access a customer’s account. Once thieves gain access to an account, they can conduct unauthorized transactions, change contact information and gather information on the account’s history to commit other crimes.How corporate employees are at risk:The most common way employees download and spread malware is by opening attachments or links in emails that are infected or that connect to an infected website. Cyber criminals will often ‘phish’ for victims using mass emails, pop-up messages that appear on your computers and/or the use of social networking and Internet career sites. Often, criminals research their victims using social and business networking sites to gather information and better target their message to the recipient.For example, cyber criminals have sent emails claiming to be from the UPS, financial institutions, the Better Business Bureaus and even the court systems.Corporate employees are the first line of defense against corporate account takeover. A strong security program paired with employee education about the warning signs, safe practices and responses to a suspected takeover are essential to protecting your company and customers.

Ways businesses can protect themselves:

• Education is key. Train your employees!

• Secure your computer and networks.

• Limit administrative rights. Do not allow employees to install any software without receiving prior approval.

• Install and maintain spam filters.

• Surf the Internet carefully.

• Install and maintain real-time anti-virus and anti-spyware. Allow for automatic updates and scheduled scans.

• Install routers and firewalls to prevent unauthorized access.

• Change default passwords.

• Block pop-ups.

• Do not open attachments from suspicious emails.

• Do not use public Internet access points.

• Reconcile accounts daily.

• Note any changes in the performance of your computer (dramatic loss of speed, computer lock ups, unexpected rebooting, unusual pop-ups, etc.).

• Make sure that your employees know how and to whom to report suspicious activity to at your company and the Bank.

Contact us if you:

• suspect a fraudulent transaction;

• try to process an Online Wire or ACH Batch and receive a maintenance page; or

• receive an email claiming to be from the Bank and it is requesting personal/company information.

CorPorate aCCount takeover Online Security Terms Hacker: someone who seeks and exploits weaknesses in a computer system or computer network.

Malware: short for malicious software, and is a general term used to describe all of the viruses, worms and spyware.

Virus: small software program whose purpose is to embed itself within another computer program in order to replicate itself.

Worm: standalone malware computer program that replicates itself in order to spread to other computers by using computer networks—famous worms include ILOVEYOU and Code Red.

Spyware: software installed on your PC that collects your information without your knowledge, and sends that information back to the creator so they can use your personal information in a nefarious way.

Adware: software package which automatically renders advertisements in order to generate revenue for its author.

Email Spoofing: sender email address is forged to trick an email user into opening or responding to an email.

Phishing: social engineering cyber-attack technique used in identity theft crimes that tries to lure personal information from the recipient or to get the recipient to download a virus or malware.

Pharming: fraudulently directs Internet users to a bogus website that mimics the appearance of a legitimate one, in order to obtain personal information such as passwords, account numbers, etc.

to learn more.... visit institutionforsavings.comClick the Security Alerts button at the bottom of the page. We also encourage you to watch the Corporate Account Takeover & Information Security Awareness video.

SECURITY ALERTS

We are Confident We Will ProsPer and meet the Challenges of tomorroW.

trustees*Freeman J. CondonJames V. EllardKevin M. GasiorowskiDonald M. GreenoughCindy M. JohnsonMichael J. JonesPeter G. KellyMary E. LarnardJohn F. Leary, IIIJeremiah T. LewisR. Drew Marc-AureleSaira Naseer-GhiasuddinEllen Galanis NichKimberly A. Rock Ellen Mackey Rose Richard J. Silverman David A. Tibbetts Jonathan J. Woodman

* Are also Corporators

CorPoratorsFrederick J. AbdullaBenjamin C. ArmstrongTodd M. BaltichKenneth C. BarneyA. Gerard BeauchampJean Paul BeckUmesh BhujuRobin S. BlairRobert G. BodwellE. Douglas BolickJohn F. BradshawMae C. BradshawEugene E. CaseLucinda J. CathcartDavid J. ChatfieldDaryl G. Colden H. Patricia Comeau-SimonsonPaul S. ComoChristopher J. ConnollyLawrence J. CuddireFrancis CulverRussell W. DavisAndrew J. deBernardoGene del RioJohn J. Desmond, IIIV. James DiFazioWilliam J. DiMentoDavid DoanePaul J. DonohoeDenald H. DoonanMarlene M. DoyleSuzanne C. DubusDonald DuprayRobert H. Ebersole

George H. Ellison, Jr.John C. ElwellHenry L. Farmer, IIIThomas J. FlynnBrian ForgetCheryl B. Forster-CahillWilliam J. FreitagJennifer GermainJames H. GilfordBenjamin M. GorniewiczJohn F. GradyChristopher GregoryMark W. GriffinDavid D. HallAugustus HarringtonDaniel HarringtonJ. Keith HarrisGerald S. HirschGary W. JerneganRussell A. JohnsonRussell E. JohnsonRichard M. KallmanJeffrey C. KirpasPaul LabadiniKenneth LabrecqueKathy LampropoulosChristopher M. LathamStacy LeBaronRichard A. LeBlancDavid L. LevesqueDorothy P. LevesqueSusan J. LittleMarjorie A. LynnAndrew B. MacDonaldJon H. Martin

Robert T. MartinStephen J. McGarrPaul J. McGinleyLisa L. MeadStuart A. MeurerRobert C. MillerDonald D. MitchellJohn F. MoakJohn G. MorrisTracy MousseauDavid A. MullenU. Mary MurrayDavid B. NewbertCharles K. NutterMark E. O’BrienJohn S. O’ConnellWilliam J. O’FlahertyJacqueline PageNancy E. PeaceR. Sean PerkinsKerri S. PerryWilliam J. PlanteCarol L. PowersFrederick H. RichenburgPeter J. RileyMichael E. RowanMichele T. SasmorEsther M. SayerPaula SimpsonDavid M. SmithChristopher L. SnowMaria Z. TodaroMark F. WelchMark WellingPauline C. White

PO Box 510, 93 State StreetNewburyport, MA 01950institutionforsavings.com

PRESORTFIRST CLASS

U.S. POSTAGEPA I D

NEWBURYPORT, MA PERMIT NO. 3

At this time of Thanksgiving we wish to express to you our sincere

appreciation for your confidence and loyalty.

We are deeply thankful and extend to you

our best wishes for a happy and healthy

Holiday Season.

Thank You