First Greenwich Financial : Audited Financial Statements

First Greenwich Financial, Inc.

and Subsidiary

Consolidated Financial Statements

December 31, 2021 and 2020

With Independent Auditors' Report

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders

First Greenwich Financial, Inc.

Opinion

We have audited the consolidated financial statements of First Greenwich Financial, Inc. and Subsidiary (the Company), which comprise the consolidated balance sheets as of December 31, 2021 and 2020, the related consolidated statements of income, comprehensive income, changes in stockholders' equity, and cash flows for the years then ended, and the related notes to the consolidated financial statements (collectively, the financial statements).

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of their operations and their cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion

We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern within one year after the date that the consolidated financial statements are issued or available to be issued.

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The Board of Directors and Stockholders

First Greenwich Financial, Inc.

Auditors' Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS, we:

• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

Portsmouth, New Hampshire

April 22, 2022

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FIRST GREENWICH FINANCIAL, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
December 31, 2021 and 2020
(In Thousands, Except Share and Per Share Data)		2021		2020
ASSETS
Cash and due from banks	$	1,201	$	1,661
Interest-bearing demand deposits with other banks		93,997		30,961
Cash and cash equivalents		95,198		32,622
Investments in available-for-sale securities		10,001		11,175
Investments in held-to-maturity securities (fair values of $4,928 (2021)
and $2,000 (2020))		5,000		2,000
Federal Home Loan Bank stock, at cost		2,881		2,881
Loans, net		456,931		400,397
Premises and equipment, net		1,004		1,189
Accrued interest receivable		2,343		2,463
Bank owned life insurance		8,128		-
Deferred tax asset, net		1,915		2,174
Other assets		6,958		2,668
Total assets	$	590,359	$	457,569
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing	$	168,399	$	107,924
Interest-bearing		300,872		243,229
Total deposits		469,271		351,153
Federal Home Loan Bank borrowings		60,800		60,800
Convertible subordinated notes		12,693		5,000
Other liabilities		8,823		4,006
Total liabilities		551,587		420,959
Stockholders' equity:
Preferred stock, no par value, 500,000 shares authorized;
issued 12,500 in 2021 and 50,000 in 2020		1,235		4,938
Common stock, $.01 par value; 19,500,000 shares authorized;
2,530,916 issued at December 31, 2021 and
2,528,663 issued at December 31, 2020		25		25
Paid-in capital		30,242		30,139
Retained earnings		6,989		1,155
Accumulated other comprehensive income		281		353
Total stockholders' equity		38,772		36,610
Total liabilities and stockholders' equity	$	590,359	$	457,569
The accompanying notes are an integral part of these consolidated financial statements.
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FIRST GREENWICH FINANCIAL, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME
Years Ended December 31, 2021 and 2020
(In Thousands, Except Per Share Data)
Interest and dividend income:		2021			2020
Interest and fees on loans	$	21,948		$	18,012
Interest on securities		236			305
Other interest		253			95
Dividends on Federal Home Loan Bank stock		48			109
Total interest and dividend income		22,485			18,521
Interest expense:
Interest on deposits		1,426			3,054
Interest on Federal Home Loan Bank advances		1,264			1,262
Interest on Federal Reserve Bank borrowings		-			61
Interest on subordinated debt		367			325
Total interest expense		3,057			4,702
Net interest and dividend income		19,428			13,819
Provision for loan losses		650			1,800
Net interest and dividend income after provision for loan losses		18,778			12,019
Noninterest income:
Service charges on deposit accounts		100			113
Gain (loss) on sales and calls of available-for-sale securities, net		-			(28)
Customer service fees		254			217
Gain on other real estate owned		-			611
Other income		157			208
Total noninterest income		511			1,121
Noninterest expense:
Salaries and employee benefits		6,363			5,753
Occupancy expense		1,217			1,024
Equipment expense		276			260
Data processing expense		746			718
Professional fees		514			375
Federal Deposit Insurance Corporation assessment		254			222
Advertising and promotions		410			428
Other expense		901			1,070
Total noninterest expense		10,681			9,850
Income before income taxes		8,608			3,290
Income tax expense		2,463			804
Net income	$	6,145		$	2,486
Earnings per common share, basic	$	2.33	$	0.86
Earnings per common share, diluted	$			$
2.01	0.83

The accompanying notes are an integral part of these consolidated financial statements.

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