With new technology comes new opportunities, to make a difference together. ANNUAL REPORT 2018

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1 With new technology comes new opportunities, to make a difference together. ANNUAL REPORT 2018

2 To our Shareholders, Customers and Friends On behalf of the Board of Directors, Officers, and entire staff, we are proud to present our 2018 Annual Report. Our focus this past year was on making a difference together, with new technology and new opportunities. We are proud to highlight our technological advancements while keeping our heart on developing community relationships. In , we continued to help improve our communities by contributing nearly $89,000 to local organizations. As Eastern Connecticut s community bank for over 150 years, we deliver state of the art products and services but also enjoy the opportunity to help our community members live, work, and grow. Here are a few other highlights of our year: Solid Financial Footings: As of June 30, 2018, total deposits were $371.5 million, with total assets of $525 million. We set a record with net income for the year of $3,129,000. Loan loss reserves continue to be adequate and the problem loans continue to decline. Strengthening Our Bank: While we have been able to reward stockholders with regular, and increased dividends and stock repurchases, we have also been able to add to our strong equity on the balance sheet. Our continued profitability and measured growth strategy, enables us to continue to serve our communities in a safe and sound manner. Always Connected: This year we focused on making banking safer, greener and more convenient for our customers. Safer, by offering Mobile Debit Card Alerts which notify customers of potential fraudulent activity; Greener, with edocuments and ereceipts; and Convenient, with the addition of Mobile Wallet, Apple Pay and Google Pay, providing fast and safe one-touch checkouts. Our Online Loan Center also continues to offer a stress-free way to prequalify, refinance, or apply at your convenience. We strive to be the leading community bank in Eastern Connecticut, committed to giving our customers the best banking experience with a personal touch. Celebrating Community Partnerships: Giving back remains at the core of our mission. We are pleased to support so many worthy organizations in Eastern Connecticut. There are dozens of partnerships and organizations enriching the communities we serve, which are supported in combination with Putnam Bank and its Foundation. Equally important is the dedication and good work our many team members offer these organizations. Helping to Grow Local Businesses: Our Executive Team offers rock solid community banking in Eastern Connecticut. Our commercial and retail lending options, and unmatched team of experts, are helping to bolster the economy as we work hand-in-hand with local home buyers and businesses. We celebrate a bright future made possible by your continued patronage and support of Putnam Bank. Together we make a difference. Thomas A. Borner, President & CEO

3 Putnam Bank Thompson Turkey Trot DKH Walk and Race for NECT Cancer Fund DKH D Vine Wine Tasting for NECT Cancer Fund Griswold Trunk or Treat Quinebaug Valley Regional Rotaract Trivia Night Fundraiser Gemma E. Moran United Way/Labor Food Drive The Last Green Valley Walktober Sponsorship Look for the contactless symbol when you want to make in-store purchases with your Putnam Bank Debit Masetercard. Go Green Get edocuments VALID CARDHOLDER NAME THRU 08/21 Visit pbolc.com today! Prequalify. Refinance. Apply. Simple. Secure. FREE! Bank on your time. Download our app. A heart for community relationships...

4 Financial Highlights PB Bancorp, Inc FINANCIAL CONDITION DATA At June 30, Total Assets $525,388 $524,148 $502,557 Investment Securities 129, , ,779 Loans Receivable, Net 352, , ,344 Deposits 371, , ,066 Borrowings 63,863 68,582 56,259 Total Capital 84,289 84,537 85,088 OPERATING DATA Year Ended June 30, Net Interest Income 14,081 $12,138 $10,561 Provision for Loan Losses Non-interest Income 2,773 3,263 2,689 Non-interest Expense 12,335 11,715 11,448 Net Income 3,129 2, PERFORMANCE RATIOS At/For Year Ended June 30, Return on Average Assets 0.59% 0.45% 0.18% Return on Average Equity 3.70% 2.72% 1.36% Interest Rate Spread (1) 2.60% 2.28% 2.09% Net Interest Margin (2) 2.82% 2.52% 2.30% Non-interest Expense to Average Assets (3) 2.33% 2.28% 2.35% Efficiency Ratio (4) 73.19% 76.07% 86.40% ASSET QUALITY RATIOS Allowance for Loan Losses as a % of Total Loans 0.83% 0.89% 0.91% as a % of Non-performing Loans 66.52% 62.71% 54.06% Non-performing Loans as a % of Total Loans 1.25% 1.42% 1.69% 1. Represents the difference between the weighted average yield on average interest-bearing assets and the weighted average cost of interest-bearing liabilities. 2. Represents net interest income as a percent of average interest-bearing assets. 3. Represents noninterest expense divided by total average assets. 4.Represents noninterest expense divided by the sum of net interest income and noninterest income. *PSB Holdings, Inc. became PB Bancorp, Inc. in January Shareholder Information Putnam Bank is a community bank, headquartered in Putnam, Connecticut, dedicated to providing superior products and exceptional customer service. Putnam Bank is more than just a bank, it is the people who work day-in and day-out to improve both the Bank and the communities we serve. Our principal business activities include the origination of mortgage loans secured by one-to-four family residential real estate, loans secured by non-residential real estate and multi-family real estate, residential construction loans, commercial loans as well as consumer loans. We also offer a wide variety of deposit accounts, including checking, savings, and certificates of deposit. Deposits are our primary source of funds for our lending and investing activities. Our Mission Putnam Bank s mission is to be the leader among independent, community-based banks in the markets we serve. We deliver responsive customer service and high quality, innovative products in a safe, sound and profitable manner. We will achieve these objectives and serve our communities with efficiency, professionalism and integrity.

5 Cut the clutter! Ask about e-receipts! A mind for technological advancements... Fast and safe one-touch checkouts. Added layers of security Tap. Bank. Stir. Banking, To Go Guard your card with Mobile Debit Card Alerts! putnambank com Community Service Award - Boy Scouts of America Nipmuck District s Evening of Champions Arc Quinebaug Valley annual Gardner Johnson Memorial Golf Tournament Putnam Lions Club Volleyball Challenge Day Kimball Hospital Putnam Bank Golf Classic Title Sponsorship Southeastern Connecticut Women s Network Annual Meeting Navy-Marine Corp Relief Society - PB Employee Giving Program Donation

6 Employee s of Putnam Bank at Putnam Bank s Annual Business After Hours Event held in The Barns at StoneHurst, Hampton Valley Putnam 40 Main Street / Putnam Price Chopper, Riverfront Commons 251 Kennedy Drive / Pomfret Center 100 Averill Road / LOCATIONS Danielson 125 Wauregan Road / Plainfield 11 Pratt Road / Griswold 461 Voluntown Road / Norwich 40 High Street / Gales Ferry 2 Chapman Lane / All offices equipped with a 24-Hour ATM. Loan Center 50 Canal Street, Putnam / CORPORATE OFFICE 40 Main Street Putnam, CT Phone: Fax: Toll Free: STOCK LISTING PB Bancorp, Inc. Common stock is listed on the NASDAQ Capital Market under the symbol PBBI. Bank online at: putnambank.com GENERAL INQUIRIES Thomas A. Borner President & Chief Executive Officer PB Bancorp, Inc. 40 Main Street Putnam, CT Phone: or tborner@putnambank.com Investor information is also available by visiting putnambank.com. Online Loan Center: pbolc.com TOGETHER WE MAKE A DIFFERENCE