Financial Highlights - Salem Five

2010 Annual Report
With Salem Five, we deal directly with the decision-makers. I
can’t tell you how unusual that is for a bank. You hear it all the
time, but it’s true—our greatest asset is our people. It’s true for
Salem Five, too. We had ambitious plans. Where other banks
saw risk, Salem Five saw opportunity. We use Salem Five for
everything from online cash management to a multimillion
dollar line of credit. Pretty much whatever we need, whenever we
need it. Building a business isn’t easy. I’m not afraid to admit
it, and neither is Salem Five. Better banking starts with listening.

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Financial Highlights
December 31
(Dollars in Thousands)
BALANCE SHEET DATA
TOTAL ASSETS ($000) NET INCOME ($000) TOTAL CAPITAL ($000)
2,482,382
2,680,482
2,845,165
2,727,570
2,779,604
2006 2007 2008 2009 2010
2010
7,539
14,807
2009 2008 2007 2006
Total Assets 2,779,604 2,727,570 2,845,165 2,680,482 2,482,382
Securities and short-term investments 751,002 653,774 788,948 848,431 782,955
Residential First Mortgage loans 653,329 648,079 760,703 724,541 724,871
Consumer loans 196,245 180,883 174,974 157,003 151,285
Commercial loans and leases 988,780 941,699 951,764 819,762 699,322
Allowance for credit losses 20,049 17,424 19,479 15,988 15,136
Total loans and leases, net 1,818,305 1,753,237 1,867,962 1,685,318 1,560,342
Total deposits 1,869,087 1,792,957 1,887,895 1,721,763 1,639,381
Borrowed funds 605,096 653,035 698,280 692,471 589,345
Total capital (1) 264,723 247,252 232,892 227,039 212,232
OPERATING DATA
Net interest income 72,307 65,792 64,104 60,237 59,952
Provision for credit losses 6,200 5,135 7,130 2,770 4,035
Non-interest income 28,715 25,164 13,834 20,932 13,556
Non-interest expense 67,546 63,521 61,554 55,624 57,887
Income before taxes 27,276 22,300 9,254 22,775 11,586
Net Income 17,471 14,360 6,079 14,807 7,539 (2)
(1) Before accumulated and other comprehensive income
(2) Includes Heritage Bank merger expenses of $8.657 million
6,079
14,360
17.471
2006 2007 2008 2009 2010
2006 2007 2008 2009 2010
212,232
227,039
232,892
247,252
264,723

At Salem Five, we believe better banking starts with listening. We hear what people want from their
bank and what they need for their business. We hear how important it is for them to find someone who
shares their vision and values, and sees their potential for success. So it’s no surprise Salem Five enjoyed
a great year in 2010.
Last year we showed strong earnings in all our divisions, especially Salem Five Mortgage. Our insurance
and investment divisions continued to grow. We invested heavily in new technology, revamped several
products based on customer feedback, and opened stores in new communities. We also launched a
major rebranding campaign that brought new clarity to our image in the marketplace. And we continued
to invite our customers to tell us what we can do better.
Looking ahead, our work is never done. But in today’s rapidly changing world, Salem Five is
well-positioned as a strong alternative to banking as usual. Because a bank that’s fiercely independent
and accountable to its customers, rather than its stockholders, is rare. A bank that truly listens and
responds to its customers is even more rare. Salem Five makes decisions and evaluates results utilizing
a long term perspective as opposed to a short term, quarter to quarter time frame. That’s what better
banking is all about at Salem Five.
Sincerely,
Joseph Joseph M. M. Gibbons
Gibbons
President, CEO
Salem Five
President’s Letter
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“You hear it all the time, but
it’s true—our greatest asset
is our people. It’s true for
Salem Five, too.”
James Alibrandi
President
Interstate Electrical Services Corporation

Better banking means better people.
Interstate Electrical Services is one of the largest electrical contractors in New England.
The secret to its success? “Our people,” Interstate President James Alibrandi said. “It’s
not uncommon for our people to be with us 15, 20, 25 years or more, and our customers
speak with very knowledgeable people at every point in the process. That’s why we love
Salem Five. There’s nothing their people haven’t seen and handled successfully many
times before.”
At Salem Five, we pride ourselves on offering all our customers a place where they can
express their concerns, get straight answers, and find solutions that keep their savings
safe and their assets growing. For our business clients, we believe in understanding their
company inside and out. They get direct contact with experts who have the right
experience and the right products to help their business grow. In fact, many of our
innovative banking solutions came about because everyone at Salem Five is a keen
listener, empowered to respond. Big or small. Established or start-up. Brick-and-mortar or
internet. Whatever your business, you’ll find people here who can help you succeed.
“With Salem Five, today it’s the same group of people around the table as the day we met,”
Alibrandi said. “We plan to still be here 20, 30 years from now, and it’s a good feeling
knowing our financial partners will be, too.”
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Mike Ferguson
President
VXi Corporation
Tom Manero
Chief Financial Officer
VXi Corporation
“With Salem Five, the time they invest in us
is directly proportional to our success.”
Better banking means better growth.
Today VXi Corporation is a leader in the telecommunications industry, manufacturing noise-cancelling
headsets that meet the highest global standards. When VXi first met with Salem Five four years ago, the
New Hampshire-based company was still working its way to the top.
“We wanted to grow, plain and simple,” VXi President Mike Ferguson said. “Once we sat down with
Salem Five, they came away believing VXi had the right management team for success. And we came away
believing Salem Five was the right bank to help make it happen.”
At Salem Five, as a mutual bank, we take a long term view of business. Our experts provide the proper
credit structure and services that lead to growth. We don’t answer to stockholders, so your success truly
is our success too.
“Salem Five really listens to us — our plans, our projections, our products, everything. And we really listen
to them – it’s open, honest and frank communication. And these days the talk is about our revenue, which
has grown by over 50%.”

Jane McNally
Director of Development
The Children’s Center for
Communication
“We had ambitious plans, but where other
banks saw risk, Salem Five saw opportunity.”
Better banking means better opportunities.
Mark Carlson
Executive Director
The Children’s Center for
Communication
When the Beverly School for the Deaf was planning to expand its services, Executive Director Mark
Carlson quickly realized it also needed to expand its space. “We wanted to keep pace with the growing
medical and learning needs of children,” Carlson said. “It was a difficult time economically. We faced a lot
of closed doors. But Salem Five stepped up to the challenge.”
Designing a creative and practical loan structure, we led a diverse group of stakeholders to enable
Carlson’s organization to build a new 30,000 square-foot state-of-the-art complex. It features improved
Americans with Disabilities (ADA) design, 13 classrooms with interactive SMART Boards, a library, a café,
dedicated spaces for music and art, and plenty of natural light.
When the dust settled, the Beverly School for the Deaf reopened its doors as the Children’s Center for
Communication, equipped to help not only children who are deaf, but children with autism, cerebral
palsy, and other disabilities as well. “Now we can support the children of our community better than
ever,” Carlson said. “And the support Salem Five gave us made all the difference.”
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®
“Salem Five pulled together a financing package that allowed a group of
us to buy the company—and save more than 200 jobs.”
Chuck Phillips
Chief Financial Officer
Signature Breads
“With Salem Five, you quickly realize they’re not just bankers. They’re
business people, too. In my experience, that’s rare.”
Steven Genestreti
EVP and CFO
Physical Sciences Inc.
“We use Salem Five for everything from a multimillion dollar line of credit to
online cash management. And they’re always a pleasure to do business with.”
Stu Haber
CEO and President
Infoscitex
“With a solid financial partner like Salem Five, even in this current economy
we can continue providing sustainable housing and creating new jobs.”
Dr. Ling Yi Liu
Partner
Oaktree Development
“Our previous bank was our financial partner for more than 20 years.
Suddenly they didn’t want to lend us any more money. Salem Five rose
to the challenge.”
Matt Rogers
Chairman
Rogers Foam
“We met with eight different banks, and I remember Salem Five was very
responsive from the beginning. They really understand what we do.”
Walter Chapin
Owner
Company C

Better banking means better innovation.
Mobile banking. Early morning, evening, and Sunday hours. Remote deposit capture. Cash back
debit rewards. Web cash manager. Free ATMs worldwide. All these innovations and more came
from listening to our customers.
In 2010, we continued to innovate, starting with overhauling our website, salemfive.com.
Redesigned with extensive customer input, the result is a smart, clean, and clear way to navigate
to important information. New and improved
features include interest rate information
that’s front and center, a full suite of financial
calculators, and a home page that allows
users to choose their own image from a
selection of beautiful photographs of our
region, like Salem Harbor and Ipswich’s Great
Marsh. Plus, in partnership with Inc. magazine,
Salem Five OnBusiness Resource Center
offers insights on national business trends,
profiles of local companies, and articles on
timely topics geared toward helping
businesses boost their bottom line.
Also in 2010, we launched salem5listens.com, an interactive forum that encourages input from
Salem Five customers and noncustomers alike. Visitors were asked one simple question—“What
do you want from your bank?” We posted their answers, as well as our comments on them, hosting
a lively online debate.
We also continued to expand our geographic
footprint. We opened new Salem Five stores
in Stoneham and Beverly Farms in 2010, and
announced plans to open a Waltham
store in the near future. Our Stoneham
location features a business center—including
fax service, Wi-Fi, and more—which Waltham
will feature, too. Our customers told us these
services would help make taking a trip to the
bank less of a disruption to their workday—and
we heard them loud and clear.
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“Call me crazy, but getting my mortgage
close to home makes sense to me.”
Better banking means better lending.
Jeff Fairbanks
Owner
Mottley’s Comedy Club
For Salem Five Mortgage Company, 2010 marked 155 years of service—and we’re still going strong. For the
past two years, rates have been very attractive to many customers, whether they’re first-time homebuyers or
hoping to refinance at a lower rate. These days low rates can be found at many banks. But exceptional service,
experienced professionals, a trustworthy reputation, and close to home? We stand alone.
“We’ve got loan officers who have been with Salem Five for 8, 10, even 25 years,” Salem Five Mortgage
Company President Ed McDonald said. “Many of them grew up in New England. They know the towns. They
know the neighborhoods. Quite often, they know our customers, too, long before they walk through our doors.”
With decisions made locally, Salem Five Mortgage closes home loans in an average of 29 days. When you
compare that to bigger lenders with 60- to 90-day timeframes, it’s no surprise we had a banner year in 2010.
We topped $1 billion in loans for the second straight year, and we financed more Massachusetts homes than
any other Massachusetts-based bank—including Jeff Fairbanks’. “I was looking forward to getting a mortgage
like I look forward to going to the dentist,” the Mottley’s Comedy Club owner and Salem Five customer said.
“By that I mean, not at all. But Salem Five made it painless.”

Steve Cutter
Owner
WordTech Corporation
“We have a very personal relationship with
Salem Five, built on honesty, integrity, and trust.”
Better banking means better insurance.
Dan Picariello
Owner
WordTech Corporation
At Salem Five Boyle Insurance Services, we understand insurance is about protecting our clients’ assets
and safeguarding their future. Whether they need personal or commercial insurance, our clients rely on
our personal accessibility, expert advice, and the best coverage available.
2010 was our best year ever for client referrals. That’s no surprise to Senior Vice President Brian Boyle.
“We’re old school,” Boyle said. “Whether you email or call us, we get back to you quickly. That’s not typical
in this day and age. But that’s how we do business. It keeps our clients happy. And when they have a friend
who needs insurance, they’re happy to tell them about us.”
That’s how Steve Cutter, Owner of WordTech Corporation, became a customer, through a referral from a
friend. “When we call, we deal with real people,” Cutter said. “They’re honest. They’re easy to work with.
The way we treat our customers, the way we treat our friends—that’s the way Salem Five treats us.”
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Louis Barretto, Jr.
Founder
L&L Services and
Landscape Supplies
“Building a business isn’t easy. We’re not
afraid to admit it, and neither is Salem Five.”
Better banking means better investments.
Caryn Barretto
Office Manager
L&L Services and
Landscape Supplies
At Salem Five Investment Services (SFIS), we believe better investing starts with listening. By
understanding each client’s unique situation, we can guide and empower them to make informed
financial decisions. Because we do not sell proprietary products, our independent advisors are focused
only on each client’s needs, whether they’re for retirement, education, estate planning, or business
growth and succession.
2010 was a growth year for SFIS—in size, in assets, and in our relationships with our clients. SFIS
President Sean Tesoro said, “As part of a mutual bank, we aren’t simply trying to hit our numbers and
make revenue goals. In challenging financial times, our investment in our clients’ best interests really
shines through.”
Louis Barretto, Jr., founder of L&L Services and Landscape Supplies, agrees. “Our new facility wouldn’t
exist without Salem Five’s help,” Barretto said. “We rely on them for not only investments, but insurance,
lending, and banking. When a lot of businesses were just trying to survive, we were trying to grow.
Having Salem Five behind us made it a lot less stressful.”

At Salem Five, we believe giving is critical to making
a lasting impact on the lives of the people in the
communities we serve. In 2010, we proudly supported
hundreds of causes important to the community,
many of which focus on financial literacy, workforce
development, and economic self-sufficiency.
In its second year, our Gold Star Saver program
continued its success. The program teaches children
about saving money through a fun and informative
website featuring All-Star Dustin Pedroia, and allows
them to experience saving money for themselves
through an interest bearing, no-fee savings account.
Thousands of kids in our communities have been
inspired to save over $1 million combined.
Also in 2010, we had a significant partnership with
the Peabody Essex Museum. We provided financial
support for its wonderful educational programs
for community children, particularly those from
low-income neighborhoods and school districts.
We also launched our financial literacy task force,
training 25 Salem Five employees to serve as
ambassadors to the community. Many great local
organizations partnered with us, like the Boys & Girls
Clubs of Woburn and Salem, the Plummer Home for
Boys, and the YMCA.
“With a strong foundation of financial literacy, financial
responsibility can be learned,” Salem Five Senior Vice
President and Chief Marketing Officer Martha Acworth
said. “We’re pleased to help educate and inspire the
next generation of financially responsible consumers
any way we can.”
Better banking means better communities.
Six-year-old Jacob Ryan meets All-Star Dustin Pedroia
at Salem Five’s “Play Ball with Dustin Clinic.”
The Boys & Girls Club of Salem welcomes
Joseph Gibbons, Salem Five President, CEO.
Beverly Bootstraps’ Jeff Gorman receives an award
from Joseph Gibbons, Salem Five President, CEO.
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Executive Management
Kim A. Meader, EVP of Business Lines
Joseph M. Gibbons, President, CEO
Ping Yin Chai, EVP, Chief Financial Officer
Sean R. Tesoro, President, Salem Five Investment Services, LLC
Dawn M. Dillon, SVP, Technology & Operations
Brian D. Boyle, SVP, Salem Five Boyle Insurance Services, LLC
Gerard F. Boyle, Jr., President, Salem Five Boyle Insurance Services, LLC
Nancy E. Jones, SVP, Human Resources
Bruce P. Potter, SVP, Risk Management & Senior Credit Officer
Martha R. Acworth, SVP, Chief Marketing Officer
John S. Hall, II, SVP, Commercial Lending
Jay S. Spahr, SVP, eCommerce
Janis C. Dodge, SVP, Consumer Banking
Edward J. McDonald, President, Salem Five Mortgage Company, LLC
Executive Committee
Pictured from left to right are:
(standing)
David H. Caldwell
Joseph M. Gibbons
Richard R. Gourdeau
Timothy J. Hunt
(seated)
William J. Lundregan, III
William H. Mitchelson

Directors, Corporators and Officers
DIRECTORS
David H. Caldwell
James N. Clark
Daniel E. Clasby
Joseph M. Gibbons
Donald S. Glass
Peter C. Gourdeau
Richard R. Gourdeau
Timothy J. Hunt
Martin J. Lawler, III
Louise J. Levesque
William J. Lundregan, III
A. Carmen Marciano
Mark A. Mitchelson
William H. Mitchelson
Catherine L. Oatway
E. Russell Peach, Jr.
Donald A. Sadoski, D.M.D.
John A. Shea, M.D.
CHAIRMAN OF THE BOARD
William H. Mitchelson
CLERK OF THE BOARD
James N. Clark
HONORARY DIRECTORS
Channing Bacall, Jr.
Alton P. Cole, Jr.
Joseph Penni
CORPORATORS
INCLuDES DIRECTORS
AND THE FOLLOWING:
Robert L. Bouchard
Dr. Stanley J. Burba
Peter K. Burke
Ping Yin Chai
Shaun M. Clarke
Jeremy M. Cohen, Esq.
Charles N. Favazzo
Theresa M. Fougere
Albert Goodhue, III
William P. Graham
Susan Phillips Gray
Douglas H. Haley
Dr. Francis M. Harte
William J. Hayden
Holly J. Jannell
Dana P. Jordan, Esq.
John D. Keenan
Phyllis B. LeBlanc
Thomas M. Leonard
Arnold I. Maloff, D.M.D.
Deborah L. McKenna
William McKinnon
Kim A. Meader
Julia D. Medina
J. Alexander Michaud, III
Doris I. Murphy
Richard H. Oedel
George A. Page, Jr.
Ronald T. Plotka, D.D.S.
Jean Porcello-Guisto
Mitchell Scott Rein, M.D.
James u. Rice, D.M.D.
J. Scott Rickards
Derek Rolfe
Frances Sheridan
John T. Smolak
Paul K. Soucy
Robert M. St. Pierre
Robert A. Tremblay
John E. Whipple, Deacon
Anthony Ronald Zagarri
James R. Zisson
OFFICERS
PRESIDENT & CEO
Joseph M. Gibbons
EXECuTIVE VICE PRESIDENTS
Ping Yin Chai
Chief Financial Officer
Kim A. Meader
Business Lines
SENIOR VICE PRESIDENT –
DIVISION HEADS
Martha R. Acworth
Dawn M. Dillon
Janis C. Dodge
John S. Hall, II
Nancy E. Jones
Bruce P. Potter
Jay S. Spahr
SENIOR VICE PRESIDENTS
Darryl A. Abbey
Clifford G. Boggis
Nicholas A. Caporale
Diana L. Carito
Rimi Chaudhuri
Bruce S. Daniels
Candace H. Doucette
Kenneth Ellis
Kenneth C. Foster
Terri M. Gavin
Keith Graham
Joseph G. Greenough
Joseph V. Leary
Mark H. Leff
Joanne C. McNamara
Doris I. Murphy
Elaine M. Paglia
Paul F. Passeri
Jeffrey R. Sweet
Doris J. Waldman
VICE PRESIDENTS
Dennis J. Barnett
Jason D. Caterino
Raymond H. Danjou
Raymond J. Dorman
Robert F. Eastman
Colleen E. Eriesian
Annis R. Gill-Miller
Scott M. Hanna
Suzanne C. Howley
Robert F. Kelley
Scott Kinsella
Joseph J. Longo
Louise A. Mallett
John A. Malloy
Matthew P. Marmen
Gordon R. Massey
Lois M. McGinness
Mark W. Murphy
Paul R. O’Leary
Sturgis P. Papagiotas
Joseph L. Rooney
William M. Smith
Brian D. Sutherland
Thomas G. Toland
Arthur A. Vassallo
Larry G. Warner
Beth A. Williams
ASSISTANT VICE PRESIDENTS
Nicole A. Backstrom
Karen C. Barter
Mohammed Bezzat
Laureen J. Block
Allison E. Carroll
Robert L. Clattenburg
Amy M. Coleman
Luisa R. Coppola
Jodie R. Coyne
Gisele L. Deschenes
Pamela K. Dovidio
Charles F. Dunn
Linda E. Gustafson
Galina Gutkin
Stephen J. Hogan
Matthew J. Hovis
Bradley P. Hunt
Mirela R. Jonuz
Patricia E. MacIntyre
Thomas A. Mealey
Alyse A. Mento
Marilyn A. Murphy
Joshua D. Neffinger
James T. Nelson
Karyn M. Salines-Alves
Diane G. Smith
Patricia L. Smith
Samuel H. Stevens
Andrew M. Stone
Annmarie Vasiles
MANAGERS
Tiffany L.G. Benton
Joan Bunaskavich
Crissy Busteed
Curtis A. Cogliano
James L. Collins
Jason M. Consalvo
Bobby A. Cowan
Penelope Doulis
Olga P. Faybushevich
Karen A. Gertz
Karlene A. Gilroy
Comaseen Lawrence
Toyuwa Newton
Melissa D. Reardon
Judith Sidmore
Michael T. Suntken
Kerrianne J. Tsimounis
Paula J. Zarbano
SALEM FIVE MORTGAGE
COMPANY, LLC
Edward J. McDonald
President
Kenneth M. Gonye, SVP
Jennifer L. Manning, SVP
Ronald J. Peck, SVP
Barry M. Salloway, SVP
Kathie A. Sauter, SVP
Susan L. Buckley, VP
Mark S. Butler, VP
Megan Carlton, VP
E. Victoria Davis, VP
Patricia L. Desmond, VP
Dianne M. Erickson, VP
John F. Hanewich, VP
Jeffrey J. Nadeau, VP
John A. Petrulavage, VP
SueAnn Sheehan, VP
Gary P. Surette, VP
G. Scott Traicoff, VP
Lawrence Blair Villa, VP
Kim A. Downey, AVP
SALEM FIVE INVESTMENT
SERVICES, LLC
Sean R. Tesoro
President
Jeffrey E. Letendre, SVP
Erick A. Bourbon, VP
Gilbert A. Gallant, VP
Jeffrey P. Arouth, Financial Consultant
Laura E. Ashe, Financial Consultant
Brian E. Doherty, Financial Consultant
John G. Meakin, Financial Consultant
JP Pontbriand, Financial Consultant
Kevin R. Sullivan, Financial Consultant
SALEM FIVE BOYLE INSURANCE
SERVICES, LLC
Gerard F. Boyle, Jr.
President
Brian D. Boyle, SVP
Debra Iuliano, VP
Claire E. LaFauci, VP
Gerard F. Boyle III, AVP
Steven Poore, AVP
EXECuTIVE COMMITTEE
EXECuTIVE MANAGEMENT
TEAM MEMBER
15

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