Ledyard Financial Group, Inc.
Annual Report 2024

Plain-text annual report

2 0 2 4 A N N UA L R E P O RT Vision The bank that makes your life better. Mission Statement With our One Ledyard approach, we deliver a highly personalized experience that results in meaningful client relationships. Organizational Values Integrity We strive to always do the right thing. Inclusion We celebrate everyone for who they are. Humility We embrace feedback and value the contributions of others. Collaboration Together we can do anything. Excellence We strive to be the best in all we do. Adaptability We seek continuous improvement and embrace change. Vision, Mission, and Values One of our volunteer teams tends a spot in Concord that we adopted many years ago, planting bulbs and flowers and cleaning to show our community support. 2 Letter from the CEO & Board Chair As we reflect on 2024, we are proud to share the significant strides we have made as an organization in a year defined by both opportunities and challeng- es. Guided by our core values, Ledyard delivered solid financial performance while advancing initiatives that align with the evolving needs of our clients and stake- holders. Despite an ever-changing economic environment we demonstrated adaptability and foresight. Our strategic vision and company culture combined the best of the big and community banking models — marrying sophis- ticated solutions with high-touch delivery and supe- rior client service. Our client experience continued to transform through strategic investments in technology and improved digital analytics. As a result, we empow- ered individuals, families, businesses, and community partners to seize opportunities, build brighter futures, and thrive. While 2024 began as a year of uncertainty on the bank- ing front, Ledyard approached the year with optimism. We continued to build reserves and maintain strong capital and liquidity throughout the year. We increased the size of our loan, deposit, and wealth management To our many constituents Including Shareholders, Valued Clients, and Community Members Josephine Moran President & Chief Executive Officer Ledyard Financial Group Ledyard National Bank Bruce P. King Chair, Ledyard Financial Group Retired, President & Chief Executive Officer New London Hospital portfolios, and broadened the bank’s charitable pres- ence. We also continued to aggressively build out the three pillars of our strategic plan — profitable growth, superb client service, and high employee engagement — through investment in new products and services, new risk mitigation techniques, new client service initiatives, and various forms of employee engagement. This dedication and enthusiasm resulted in solid financial results as well as impressive growth: ■ Net income of $3.3 million exceeded 2023 results. ■ Total assets ended at $950 million, up 11% over the prior year. ■ Loans and client deposits grew 38% and 32%, respectively, notably exceeding com- parable industry growth rates. ■ Low-spread investment and borrowing balances shrank with investment balances down nearly $63 million. ■ Credit reserves increased 35% or $1.0 million, to $3.8 million. ■ Assets under management and related rev- enue rose 10% and 12%, respectively, over 2023. ■ $0.84 dividend for the year, unchanged from the prior year. Ending the second year of our strategic trans- formation with Q4 2024 earnings of $1.3 million punctuated a year of promises delivered and es- tablished that Ledyard’s evolving business model holds strong promise for the future. 3 energy solutions, reducing their car- bon footprint while enjoying long-term cost savings on en- ergy expenses. By facilitating access to affordable financing for renewable energy projects, we are providing an easy and convenient way for our clients to embrace sustainable practices, contributing to a cleaner future for our communities. Tailored Solutions for Healthcare Professionals Having worked closely with so many healthcare profes- sionals through the years, we understand their unique challenges and opportunities. Through our Private Banking division, we designed a program to support this group at every stage of growth, tailoring banking and financial solutions including investment manage- ment, specialized loan options, and trust and estate planning. New Online Account Opening Experience In addition to these newly introduced products, we also turned our attention to the digital account opening experience. Due to the growing popularity of online and mobile banking, and recognizing the increased expec- tations associated with opening a new account, we launched an exceptional online account opening experi- ence for consumers and businesses through a partner- ship with Narmi. By leveraging advanced technology, we offer a faster, easier, and more intuitive experience for a tech-savvy and mobile-first customer base to open accounts from anywhere at any time. This focus reflects our commitment to enhancing convenience and accessibility. Personal Banking In response to evolving client needs and advancements in technology, we launched new products and services designed to enhance their banking experience, pro- vide relevant solutions, and address diverse financial goals. This year, we introduced Ultimate Gold Checking with Ultimate ID® Plus, a new check- ing account that combined essential financial services with lifestyle-fo- cused benefits. This account provides exceptional value and convenience, offering bundled banking services alongside travel perks, lifestyle savings, unlimited .75% cash back, and built-in fraud protection features to guard against the persistent threat of data breaches. By integrating these features with robust fraud protection, we’re not only enhancing the client experience, but also building trust and security in every transaction. In alignment with our mission to empower Ledyard clients with tools to achieve financial well-being, we in- troduced credit score monitoring through CreditSense powered by Savvy Money®. Accessed through our on- line and mobile banking platforms, this service provides our clients with real-time access to their credit scores, full credit reporting, real-time credit monitoring alerts, personalized insights, and actionable tips to improve financial health. By offer- ing greater transparency and control, we help individuals make informed financial decisions to achieve their credit goals. Committed to Green As part of our commitment to sustainability and sup- porting environmentally responsible initiatives, we in- troduced solar loans in partnership with Atmos, a leader in clean energy financing. This program is designed to encourage individuals and businesses to invest in solar Letter from the CEO & Board Chair 4 As the digital environment continues to evolve, we introduced the role of Chief Digital Officer with a mission to drive digital transformation in an increasingly technolo- gy-driven financial landscape. This strategic leadership role is critical to aligning our digital initiatives with client expectations, fostering innovation across all aspects of our business and ensuring the reliability and security of our digital infrastructure. Rob Capozzoli brings expertise in emerging technologies, digital strategy, and customer experience, ensuring that we deliver seamless, secure, and cutting-edge solutions. By in- vesting in this key position, we plan to create a future-ready organization that meets the evolving needs of our clients while remaining competitive in a rapidly changing industry. Lending Growth, Innovation, and Impact Ledyard experienced a robust year in lending, demonstrating continued commitment to supporting our diverse client base across various loan categories. We saw significant growth in commercial loans, reflecting a healthy economy and strong demand for credit within our market area. The residential and consumer loan portfolios also saw solid growth with the rollout of new products, streamlined procedures, and new partnerships in the market. Our total loan portfolio increased by 38% during the fiscal year, reaching $579MM. The primary component of that growth was in the commercial loan portfolio, which grew by $116MM with the residential loan portfolio growing to $219MM. We maintained a strong credit quality with a 0.27% delinquency rate, reflecting our prudent underwriting standards. We expanded our CRA Manufactured Home Loan program and rolled out a First Time Home Buyer Loan Program, which resulted in 37 loans totaling $4.8MM, further reinforcing our commitment to serving underserved com- munities and borrowers. Finally, we invested in enhancing our lending soft- ware systems with the expanding usage of a new loan origination system and the implementation of a construction management software system. Supporting Our Small Business Clients We also responded to the growing needs of our business clients by introducing two new services. First, we partnered with Clover® to introduce merchant services solutions intended to empower businesses of all sizes with innovative payment and transaction capabilities. By providing seamless, secure, and efficient payment process- ing options, we’re enhancing their ability to serve customers, streamline operations, and drive growth. Second, we rolled out expanded payroll ser- vices and HR solutions through our partnership with Heartland, designed to simplify their workforce management and provide efficient, accurate and compliant payroll processing solutions, including technology such as 401(k) integration and tax compliance. These services help businesses drive operational efficiency, ultimately contributing to their growth and success. Through these solutions, we continue to support entrepreneurial success and contribute to a thriving economic ecosystem. Letter from the CEO & Board Chair Robert Capozzoli Chief Digital Officer 5 “My Ledyard team has repeat- edly gone above and beyond what I thought I could expect from a bank. They’ve found cre- ative and thoughtful solutions to the challenges my company has faced through the acquisition and ongoing management of my business. “If you need a bank big enough to offer a full suite of banking services, yet small enough to know you on a personal basis and truly care about your business’ success, then make Ledyard your banking partner!”  Kevin Moyer, owner, Vermont Frames & Foam Laminates of Vermont A Distinctive Approach to Wealth Management Our Wealth Management division introduced the Ledyard Advantage, spotlighting how we serve our clients with a differentiated experience that utilizes a team approach, personalized investment solutions, fiduciary and trustee services, tools such as our Live Well Planning Roadmap, and a Private Banking experience. As we developed the Ledyard Advantage, we recognized the growing need for comprehensive financial education designed for clients and pro- spective clients. To address this need, we designed and execut- ed a series of virtual workshops and masterclasses. In 2024, we continued to expand the program by introducing new topics such as Retiring Solo and Healthcare Banking. Along with our more popular topics, including Business Transition Planning and Medicare Plan- ning, we showcased our knowl- edge and delivered the highest level of advice and guidance. Our Medicare session was so popular, we added complimentary Saturday office appointments at our financial centers for personalized advice. In addition to these sessions, we’re very proud of the many other ways in which we educate and advise. For example, our Ledyard Live Well Planning Roadmap is a tool to help clients navigate uncertainty as they collaborate with our Financial Advisors team. Through our scenario planning approach, we help clients pre-experience financial situations before they occur while stress-testing various situations related to economic conditions. These exercises facilitate large decisions such as when to retire, buy a second home, fund a college education, and even when to buy or sell a business. Letter from the CEO & Board Chair Kevin Moyer, owner, Vermont Frames & Foam Laminates of Vermont We recognize the growing need for comprehensive financial education. The Ledyard Advantage 6 Commitment to Community As a cornerstone of our mission to build stronger, more vibrant communi- ties, Ledyard is deeply committed to supporting nonprofit organizations and community initiatives. By donating to causes that address critical needs such as education, affordable housing, healthcare, and food security, we created opportunities to improve the quality of life for individuals and families in the areas we serve. These contributions are more than financial investments; they reflect our belief in the power of collective action to drive meaningful, positive change and foster long-term community resilience. In addition to financially supporting over 50 New Hampshire and Vermont nonprofits this year, our employee volunteers sat on 17 boards and logged over 1,500 hours, lending their skills, time, and energy to local causes and initiatives. From gleaning fruits and vegetables for local food pantries with Willing Hands to completing urgently needed home repairs in partnership with Cover Home Repair & Store, their efforts exemplified our dedication to creating a lasting impact. We also participated in Granite United Way’s Day of Caring with volunteer activities throughout New Hampshire and Vermont. Additionally, our annual holiday food drive was a great success, as were our two American Red Cross blood drives. We understand that thriving communities are the foundation of a prosperous future, and by engaging directly with the people and organizations we serve, we strength- en the bond between our bank and the community. This holistic approach to support our neighbors is integral to our values and underscores our role as a partner in building a brighter tomorrow for all. We were incredibly proud to support the first-ever New Hampshire Book Festival in Concord. As the Presenting Sponsor, we assisted in bringing authors to the Granite State to celebrate literacy, conversation, and community. In the spirit of the event, we part- nered with the Children’s Literacy Foundation (CLiF) to donate and collect new children’s books to be shared throughout New Hampshire and Vermont. We are looking forward to growing this wonderful relationship in the years to come. Ledyard enjoys supporting the community and local nonprofits through volunteer time, fundraising events, and making financial contributions. Letter from the CEO & Board Chair “I was introduced to Ledyard in 2022, and with their support, I was able to turn my dream of owning a business into a reality. They took the time to truly understand who I am and guided me through every challenge with unwavering dedication. Now, in 2025, Ledyard continues to provide exceptional customer service for my business. Their small- town feel combined with big-bank power is exactly why I chose Ledyard.” Shawn Bronson, Owner & President, Shaker Hill Granite Shawn Bronson (left) Owner and Pres- ident, Shaker Hill Granite, and Robert Christensen, SVP & Sr. Commercial Relationship Manager 7 Women in Business Ledyard is proud to support women in business, rec- ognizing their vital role in driving innovation, creating jobs, and contributing to economic growth. We are committed to breaking down barriers and providing the resources and mentorship needed to empower women entrepreneurs and business leaders to thrive. In 2024, we launched Women with Purpose, a unique initiative that brings local businesswomen together to share essential advice, ideas, and knowledge to help them flourish in their work environments. Our sessions pro- mote connection and learning, allowing our attendees to hear from speakers who focus on current business topics while building valuable networks. Our support for women in business extended beyond our own program. Josephine Moran, our President and CEO, was a featured panelist at the New Hampshire Business Review’s Powered by Women event, the NH Bankers Association’s Women in Banking Conference, and the Women Business Collaborative’s annual Action for Impact Summit. By sharing her insights, experiences, and strategies for success, Josephine demonstrated our dedication to empowering women in banking while inspiring the next generation of leaders. She engaged in meaningful dialogue about challenges and opportu- nities, reinforcing our commitment to shaping a more inclusive and dynamic future for the industry. Finally, we participated in the Women Can Do career exploration conference, hosted by Vermont Works for Women. The gathering brought together hundreds of students with over 80 employers for a day of mean- ingful education regarding career pathways. We are dedicated to inspiring the next generation of women leaders and sparking interest in the diverse opportu- nities within the financial industry and beyond, while fostering confidence and ambition. Supporting initia- tives like this aligns with our commitment to advancing gender equity and creating a workforce that reflects the strength and diversity of the communities we serve. Letter from the CEO & Board Chair Awards and Recognition In recognition of the bank’s impact on neighbors, friends, and business partners, the culture we’ve instituted throughout the company and our dedication to becoming an employer of choice, Ledyard received meaningful acknowledgments from our industry and community. ■ The Valley News Reader’s Choice Awards: 1st Place Best Financial Planning Service, 1st Place Friendliest Employees and top three in the Best Bank category ■ The Concord Monitor’s Capital Area People’s Pref- erence Award (CAPPIES): 1st Place Best Financial Advisors, 1st Place Best Place to Work, and 2nd Place Best Bank ■ The Registry Review’s Fast 50, recognizing the 50 fastest-growing Commercial and Residential loan providers in New Hampshire ■ Small Business Administration (SBA) 504 Third Party Lender of the Year, awarded in recognition of Ledyard’s help giving small businesses the access to capital they need ■ One of Business NH Magazine’s Top Women-Led Businesses, underscoring our dedication to leader- ship, growth, and making a positive impact on our communities ■ One of American Banker Magazine’s Best Banks to Work For, highlighting our workplace culture as a standout in the industry ■ Josephine Moran, Ledyard’s President and CEO, was named to the NH Business Review’s 2025 NH 200 list. Her outstanding leadership and contributions to New Hampshire’s business community earned her recogni- tion among the state’s most influential figures. ■ Ledyard National Bank once again earned Bauer’s top (5-star) Rating for financial strength and stability. This recognition signifies that Ledyard continues to be one of the strongest banks in the nation. We also earned an even higher assignment as an “Exceptional Perfor- mance Bank.” This designation is reserved solely for banks that have earned this top rating for a minimum of 10 years consecutively. 8 Letter from the CEO & Board Chair Thinking forward, we are inspired to continue building on our achieve- ments, embracing new opportuni- ties, and navigating challenges with integrity and purpose. Together, we will drive progress, create mean- ingful value, and remain steadfast in our mission to serve as a trusted financial partner. Thank you to our shareholders, clients, employees, and board members for your trust, support, and confidence in our company. You have been, and will continue to be, the key to Ledyard’s success. 9 2024 Financial Highlights (dollars in thousands, except “Other data”) Years-Ended December 31, 2024 2023 2022 2021 2020 Financial Condition Data Assets $ 950,467 $ 856,115 $ 743,465 $ 771,143 $ 684,707 Investments & interest bearing deposits 307,166 369,798 314,810 364,650 276,594 Gross loans 579,723 418,766 362,057 362,677 371,916 Allowance for credit losses (3,759) (2,780) (3,843) (7,469) (7,958) Net loans 575,964 415,986 358,214 355,208 363,958 Deposits 807,763 660,157 570,332 675,082 589,512 Borrowings 56,520 111,799 87,978 5,627 6,729 Subordinated debt and accrued expenses 29,647 28,139 32,155 17,728 21,582 Shareholders’ equity 56,537 56,020 52,999 72,706 66,884 Operating Data Net interest income $ 18,498 $ 17,235 $ 18,686 $ 18,274 $ 16,762 Wealth management fee income 14,134 12,656 12,779 13,169 11,614 Other non-interest income 2,988 1,486 1,400 1,699 2,023 Securities gains (losses) (1,044) (15) (2,966) 168 1,431 Total revenue 34,576 31,362 29,899 33,310 31,830 Provision for credit losses 618 667 (3,634) (450) 2,700 Non-interest expense 30,523 27,907 26,036 25,287 21,838 Pre-tax income 3,435 2,788 7,497 8,473 7,292 Income taxes 174 (377) 515 708 563 Net income 3,262 3,166 6,982 7,765 6,729 Other Data Earnings per share, basic $ 0.98 $ 0.96 $ 2.14 $ 2.42 $ 2.13 Dividends per share $ 0.84 $ 0.84 $ 0.84 $ 0.80 $ 0.76 Tangible book value per share $ 16.58 $ 16.64 $ 15.83 $ 21.70 $ 20.14 Shares outstanding, net of treasury 3,410,643 3,367,515 3,348,395 3,350,624 3,323,110 Return on average assets 0.33% 0.41% 0.94% 1.07% 1.11% Return on average equity 5.35% 5.51% 10.77% 10.95% 10.97% Efficiency ratio 88.28% 88.98% 87.10% 75.91% 68.59% Stock price - high $ 16.97 $ 20.00 $ 25.70 $ 27.25 $ 26.00 - low $ 12.77 $ 12.95 $ 17.80 $ 18.99 $ 15.16 - average $ 14.52 $ 15.64 $ 21.12 $ 24.13 $ 18.75 Assets under management and custody (millions) $ 2,144 $ 1,947 $ 1,705 $ 1,976 $ 1,709 Equity to asset ratio 7.63% 8.31% 9.44% 8.35% 8.78% Allowance for credit losses to total loans 0.65% 0.66% 1.06% 2.06% 2.14% Allowance for credit losses to non-performing assets 300% 161% 260% 526% 543% Texas Ratio 1.42% 2.01% 1.73% 2.04% 2.01% Complete Ledyard Financial Group 2024 audited financial statements can be found under “Investor Relations” at ledyard.bank. Certain reclassifications have been made to the prior period information to conform to the current period presentation. 10 Senior Management Team* Board of Directors* Josephine Moran President & Chief Executive Officer Susan A. Fernald Executive Vice President & Chief Risk Officer Michael Hakoun Executive Vice President & Chief Wealth Management Officer Kimberly Lebron Executive Vice President & Chief Lending Officer Michael M. Parisi Executive Vice President & Chief Banking Officer Peter Sprudzs Executive Vice President & Chief Financial Officer Margie Arbuckle-Morrill Senior Vice President & Wealth Compliance Director Catherine Bardier Senior Vice President & Chief People Officer Katie Blake Senior Vice President & Senior Retail Banking Officer Sara V. Blake Director of Finance Robert Capozzoli Senior Vice President & Chief Digital Officer Scott Coulter, CFA Senior Vice President & Chief Wealth Planning Officer Dave Foss Senior Vice President & Chief Information Officer Kathy Leclair Senior Vice President & Private Banking Director Jeffrey H. Marks Senior Vice President & Chief Marketing Officer Amy Osetek Senior Vice President & Senior Compliance and CRA Officer Douglas B. Phillips, CFA Senior Vice President & Chief Investment Officer Mark Beliveau Partner, Gallagher, Flynn & Company, LLP Jay Benson CEO, Simon Pearce (U.S.) LLC. Bruce P. King Retired, President & Chief Executive Officer, New London Hospital Chair, Ledyard Financial Group Judith M. Maloy Director & CEO, Polaris Direct Wilhelmina Dingemans Miller Director, Downs Rachlin Martin, PLLC Josephine Moran President & Chief Executive Officer, Ledyard Financial Group Charles M. Petersen Retired Bank CEO Margaret M. Rightmire Civic Leader Teresa Rhodes Rosenberger Senior Advisor, Bernstein Shur Andrew A. Samwick Professor of Economics, Dartmouth College Robert O. Wetzel Retired, Senior Partner, Accenture plc Vice Chair, Ledyard Financial Group * As of December 31, 2024 LEDYARD.BANK CONCORD | HANOVER | LEBANON | LYME | NEW LONDON | NORWICH, VT | WEST LEBANON 888.746.4562 Forward-Looking Statements: Statements concerning future performance, developments or events, expectations for growth and income forecasts, and any other guidance on future periods constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended. Such statements are subject to a number of risks and uncertainties. Actual results may differ materially from stated expectations. Specific factors include, but are not limited to net interest margin variations due to changes in the interest rate environment, general economic conditions (including inflation and concerns about liquidity), loan production, competitive pressure in the banking industry, balance sheet management, the effect of changes in equity prices on assets under management, the ability to control costs and expenses, operational risks including, but not limited to, cybersecurity incidents, fraud, natural disasters, war, terrorism, civil unrest, and future pandemics, changes in regulation and financial policies of the United States government. Ledyard Financial Group disclaims any obligation to update or revise any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes, except as required by law. EQUAL HOUSING LENDER MEMBER FDIC Follow us on

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