It is our mission to provide superior service and financial products to both consumers and businesses on the North Shore.

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1 2011 Annual Report Commitment to Community.

2 It is our mission to provide superior service and financial products to both consumers and businesses on the North Shore.

Message from our President and CEO I am very pleased to report that 2011 was another record year for North Shore Bank as net income rose to $3,203,000, representing a 4.

Our accomplishments over the past year are reflective of the Bank s excellent asset quality, strong net interest margin, and our ongoing commitment to expense control.

At year-end, our loan delinquency was well below 1%, credit losses were minimal and our non-performing assets totaled $994,000 or 0.22% of total assets.

3 Message from our President and CEO I am very pleased to report that 2011 was another record year for North Shore Bank as net income rose to $3,203,000, representing a 4.6% increase over last year despite ongoing macroeconomic and regulatory challenges. Our accomplishments over the past year are reflective of the Bank s excellent asset quality, strong net interest margin, and our ongoing commitment to expense control. We closed the year with a Tier One Leverage Capital ratio of 9.89% and a strong liquidity position well in excess of regulatory standards. At year-end, our loan delinquency was well below 1%, credit losses were minimal and our non-performing assets totaled $994,000 or 0.22% of total assets. Despite our low level of problem assets, we prudently maintained a strong level of loan loss reserves of 1.52% of loans. Our strong asset quality when combined with the Bank s capital and liquidity position enables us to meet the credit and financial services needs of the communities we serve. Further, it allows us to take advantage of new opportunities for the long-term growth of the Bank. North Shore Bank accomplished much during 2011, including the renovation of both our Middleton and Beverly offices, as well as the introduction of electronic statements and on-line mortgage applications. In the spring, we completed a conversion of our ATM and Debit Card Network. Once the new network was fully integrated we were able to provide better service at the first point of customer contact, reduce work flow, offer more functionality through our ATM terminals and lower our overall costs. In the fourth quarter of 2011, we unveiled a new and innovative North Shore Bank checking account. While larger banks were looking for ways to increase fees, we developed an account that actually pays David J. LaFlamme President and Chief Executive Officer our loyal customers back each month, and reimburses them for ATM surcharges from other banks, just for using their account. In the fall, a comprehensive marketing campaign was launched to promote this product and enhance the branding of the Bank. Through all of these accomplishments, our proudest achievement was the continued support we were able to lend to the many charitable and non-profit organizations on the North Shore. For 123 years, caring about our community has been a guiding principle in how we conduct our business. As we have grown, we have not lost sight of the importance of caring for the people who live and work in the communities we serve. Throughout this report you will see examples of North Shore Bank s commitment to community. It has been, and will continue to be, a key part of who we are. The extraordinary gains we made in 2011 could not have been realized without the support and loyalty of our customers, the sound counsel of our Board of Directors and the hard work of our dedicated employees. I wish to thank them for their contributions to our continued success.

Board of Directors Seated left to right: David J. LaFlamme, President and Chief Executive Officer, Gary F. Cowles, Chairman of the Board Standing left to right: David L. Ankeles, Jonathan N.

Azevedo Virginia Blazo Amanda Brinkley Benoit J. Brodeur, Jr. Jonathan N. Bursaw Karen Murray Cady Timothy F. Clarke Gary F. Cowles John A. Diskes Thomas J. Durkin, III Robert A. Ferm Bradley R.

4 Board of Directors Seated left to right: David J. LaFlamme, President and Chief Executive Officer, Gary F. Cowles, Chairman of the Board Standing left to right: David L. Ankeles, Jonathan N. Bursaw, Bradley R. Gauthier, Luis L. Azevedo, Francis J. McCormack, Benoit J. Brodeur, Jr., Timothy F. Clarke Bank Corporators Nicholas Ambeliotis David L. Ankeles Luis L. Azevedo Virginia Blazo Amanda Brinkley Benoit J. Brodeur, Jr. Jonathan N. Bursaw Karen Murray Cady Timothy F. Clarke Gary F. Cowles John A. Diskes Thomas J. Durkin, III Robert A. Ferm Bradley R. Gauthier J. Larry Glass Mark L. Goldstein Charles E. Holden John R. Keilty Edmund J. Kowalski David J. LaFlamme Alan G. Lampert Roger D. LeBlanc Daniel J. Lemieux Kevin Lyons Jill Elmstrom Mann Albert Martins David P. McKenna Francis J. McCormack Darryl Parker Paul Richardson Peter S. Routses Joseph S. Sabelli Mark R. Shaw Raymond P. Shea William H. Sheehan, III Charles L. Short, Jr. Ira S. Singer Michael T. Smerczynski George J. Sophinos Stephen T. Vesey Suzanne Waite William J. Woods Richard A. Yagjian Pamela J. Zerber

5 Bank Officers David J. LaFlamme, President and Chief Executive Officer Finance Division George J. Sophinos, Senior Vice President, Chief Financial Officer Dorothy M. Roth, Vice President and Controller Amanda P. Hoeun, Accounting Officer Human Resource Division Beth A. Tichy, Senior Vice President Lending Division Michael D. Brown, Senior Lending Officer Peter D. Fenn, Senior Vice President Jerome J. Salerno, Senior Vice President Karl R. Wilson, Senior Vice President Sherry M. Ambrose, Vice President Rosemary Garcia Frost, Vice President William J. Kell, Vice President Steven C. Pettengill, Vice President Peter F. Malinowski, Vice President Bertha E. Mulley, Assistant Vice President Phillip P. Noto, Commercial Loan Officer Lisa F. Chockrek, Appraisal Officer Operations and Information Technology Division Susan Cheever Shea, Senior Vice President Gary A. Frost, Vice President Loren C. Swindell, Vice President Retail Banking Division James M. Muse, Senior Vice President Judith F. Doherty, Vice President Paul T. Lawrence, Vice President Christopher G. Pesce, Vice President Michael F. Zellen, Vice President Diane M. Ayers, Assistant Vice President Linda S. LeBlanc, Assistant Vice President Mary Beth O Connell, Assistant Vice President Maria A. Silva, Assistant Vice President Mary Lou DaSilva, Sales and Service Manager Betzi De La Rocha, Sales and Service Manager Suzanne L. O Brien, Sales and Service Manager

people who get involved in the many civic organizations that make the lives of their family and friends better.

6 Commitment to Community What defines a community? We believe a community is defined by its people - the people who work hard everyday to give back to those in need, the people who care about the future of their neighbors and their children, and the people who get involved in the many civic organizations that make the lives of their family and friends better. Bedrock of Support North Shore Bank s commitment to community is evident throughout the cities and towns all over the North Shore. Our community involvement defines what it means to be an exceptional community bank and we strive to meet that commitment every day. In 2011, the Bank was recognized by both the North Shore Community Development Coalition and the Danvers Committee for Diversity for its commitment to community. During the North Shore Community Development Coalition annual No Place Like Home Auction, the Bank was awarded with the CDC s Bedrock of Support Award, which is given for continued support and contributions to the mission of building homes and strengthening communities. Mickey Northcutt (left), Executive Director of the North Shore Community Development Coalition, thanks Steven Pettengill of North Shore Bank for his assistance with the development of an affordable housing apartment building in Beverly, MA. Drum Major for Justice The Bank was also recognized by the Danvers Committee for Diversity as an organization that best exemplifies the legacy of Dr. Martin Luther King, Jr. and his desire to benefit mankind. At their annual Awards Dinner, the Committee honored North Shore Bank with the Drum Major for Justice Award for its contribution to Project Sunshine, a program that allowed homeless children to attend summer camp. The following pages highlight some of the community events the Bank has supported throughout the year, either with financial contributions or its employees volunteering their time. These are just a few examples of North Shore Bank s commitment to community. James Muse (second from left), Senior Vice President of North Shore Bank s Retail Banking Division, presents toys to the children of Project Sunshine in Danvers, MA.

7 Community Events and Sponsorships Throughout the year, employees from North Shore Bank volunteered their time to attend a number of community events that took place on the North Shore. These are just a few examples of community events the Bank participated in and sponsored in NS Medical Center - Cancer Walk Middleton Chief Will s Day George Peabody Essay Awards Holiday Gift Drive Peabody State of the City Address Peabody Education Council

8 Danvers Family Festival Beverly Digi Kid s Day Peabody s Kid s Day Progeria Race for Research Middleton Pumpkin Festival Danvers Winter Festival

9 2011 Contributions Andrew Silverman Memorial Golf Outing Anna Jaques Community Health Foundation Beverly Bootstraps Food Pantry Beverly Chamber of Commerce Beverly High School Basketball Beverly High School Boys Soccer Boosters Beverly High School Up All Night Beverly School for the Deaf Bishop Fenwick High School Golf Tournament Boys & Girls Club of America Brian D. Silber Memorial Fund Community Associations Institute - New England Catholic Charities North Citizens for Adequate Housing City of Peabody - PVMHS Danvers Falcons Football Boosters Danvers Police Benevolent Association Danvers Triad Danvers YMCA Danvers Youth Football Danvers Youth Hockey Danvers High School Project Graduation District 15 Little League Challenger Program East District PDD Association Essex National Heritage Commission Fred Berry Charitable Fund Friends of the Danvers Committee for Diversity Friends of the Flint Library (Middleton) Friends of the North Shore Education Consortium Girl Scouts of Eastern Massachusetts Greater Lynn YMCA Harborlight Community Partners Haven From Hunger Haverhill YMCA HAWC Hospice of the North Shore John Ashford Link House, Inc. Kiwanis Club of Beverly Kiwanis Club of Danvers Kiwanis Club of Middleton Lowell General Hospital Team Walk Lowell High School Alumni Golf Tournament Making A Difference In Peabody Foundation, Inc. Massachusetts Bankers Association Middleton Board of Trade Middleton Chief Will s Day Middleton Pumpkin Festival NEURO Golf North Shore Chamber of Commerce North Shore Community College North Shore Community Development Coalition North Shore Habitat for Humanity North Shore Medical Center Cancer Walk North Shore United Way, Inc. Northeast Health Foundation Northeast Massachusetts Youth Orchestras Inc. Peabody Chamber of Commerce Peabody Firefighters 1AFF Local 925 Peabody Firefighters Honor Guard Peabody High School Boys Baseball Boosters Peabody High School Football Boosters Peabody High School Hockey Boosters Peabody Lions Club Peabody Little League Peabody Pop Warner Peabody Western Little League Peabody Police Benevolent Association Polycystic Kidney Disease Foundation Portuguese Continental Union Lodge No. 10 Rotary Club of Danvers Rotary Club of Peabody Salem High School After Prom Committee Salem Maritime Festival Salem Music Boosters Salem Sound Coastwatch Salem State Softball Salem State University Foundation Service Learning Salem High School Special Olympics (Middleton Police Department) St. John the Baptist School St. John s Preparatory School Tansey Benefit Temple Ner Tamid Temple Sinai The Caleb Group The Friends of Beverly High School Baseball The Friends of the Peabody Council on Aging The Friends of the Peabody Institute Library The Holocaust Center, Boston North The Mastocytosis Society The Progeria Research Foundation Town of Danvers VFW Post 545 Wylinn s Wish for A Cure Yankee Clipper Council YMCA of the North Shore Zack Leventis Memorial Scholarship Fund

10 Consolidated Statement of Condition (Dollars in Thousands) December 31, Assets Cash and Due From Depository Institutions... $3,833 $3,923 Securities... 62,455 74,716 Overnight Investments... 25,321 19,603 Loans Loans , ,943 Allowance For Loan Losses... (5,272) (5,093) Net Loans , ,850 Fixed Assets Land and Building... 6,004 6,083 Equipment... 1,119 1,338 Total Fixed Assets... 7,123 7,421 Other Assets... 13,826 14,140 Total Assets... $453,523 $447,653 Liabilities Deposits Demand Deposits... $55,166 $49,446 Interest Bearing Balances MMDA Accounts , ,687 Savings Accounts... 33,947 32,277 Time Deposits , ,938 NOW Accounts... 19,490 17,775 Total Interest Bearing , ,677 Total Deposits , ,123 Borrowed Funds... 51,300 50,756 Repurchased Agreements... 7,410 9,652 Other Liabilities... 3,073 3,572 Total Liabilities , ,103 Equity Capital Total Equity Capital... 46,603 43,550 Total Liabilities and Equity Capital... $453,523 $447,653

Locations Corporate Headquarters 248 Andover

114) Peabody, MA 01960 Main Office 32 Main

Appleseed s Square 50 Dodge Street Beverly, MA

01923 Middleton Office 161 South Main Street

Avenue Salem, MA 01970 Vinnin Square Office 5

Office Hannaford Supermarket 637 Lowell Street

11 Locations Corporate Headquarters 248 Andover Street (Rt. 114) Peabody, MA Main Office 32 Main Street Peabody, MA Beverly Office Appleseed s Square 50 Dodge Street Beverly, MA Danvers Office 48 Elm Street Danvers, MA Middleton Office 161 South Main Street Middleton, MA Salem Office 319 Highland Avenue Salem, MA Vinnin Square Office 5 Paradise Road Salem, MA West Peabody Office Hannaford Supermarket 637 Lowell Street Peabody, MA (877) Equal Housing Lender Member FDIC Member SIF

12 1888

Our roots run deep ANNUAL REPORT

Our roots run deep ANNUAL REPORT Our roots run deep. 2016 ANNUAL REPORT A commitment to community Community banks have a rich history of meeting the needs of the cities and towns in which they operate. Whether through their normal business