Legacy Bancorp, Inc. (the “Company” or “Legacy”) (NASDAQ: LEGC),
the holding company for Legacy Banks (the “Bank”), today reported a
net loss of $4.5 million or $0.57 per share, for the quarter ended
December 31, 2010, compared to a net loss of $3.8 million, or $0.48
per share, in the fourth quarter of 2009. For all of 2010 the
Company incurred a net loss of $7.9 million, or $0.99 per share, as
compared to a net loss of $7.8 million, or $0.98 per share in 2009.
The year to date change in net loss includes a decrease in the loss
on the sale of securities and charges on investments deemed to be
other-than-temporarily impaired (OTTI), offset by an increase in
the provision for loan losses and operating expenses and a decrease
in net interest margin. The 2010 fourth quarter and full year loss
also include a charge of $1.5 million on the prepayment of
approximately $34.7 million of advances from the Federal Home Loan
Bank (FHLB). The total shares outstanding resulted in a book value
per share and tangible book value per share of $12.92 and $11.17,
respectively, at December 31, 2010.
J. Williar Dunlaevy, Chief Executive Officer, commented, “The
fourth quarter concluded a pivotal and transitional year for Legacy
Bancorp and sets the stage for improved performance and dynamic
change for our company, customers, employees and community. In
April, following a national search, Pat Sullivan joined us as
President of the company and President & CEO of Legacy Banks.
On the operating side, Pat quickly moved to put in place a profit
improvement plan. He also quickly assumed the reins as chief
lending officer and aggressively worked to resolve problem assets
and remove risk from the balance sheet, which unfortunately
overshadowed the profitability improvements.
“On the more strategic front, we worked with the board on how
best to create long term shareholder value. The conclusion was the
decision announced in December to join forces with Berkshire Hills
Bancorp, our long term in-market competitor, to create a dynamic
regional community bank building on the financial strength and
talent of each company.”
Patrick J. Sullivan, President, added, “My first year has been
primarily focused on improving all measures of asset quality as
well as addressing cost management throughout the bank. 2010 is
reflective of all those actions. Our recently announced merger with
Berkshire Hills Bancorp creates further opportunities for building
a strong Western Mass based financial institution.”
The Company’s total assets decreased by $29.4 million, or 3.1%,
from $946.3 million at December 31, 2009 to $916.9 million at
December 31, 2010. Within the overall asset balances, the gross
loan portfolio, excluding loans held for sale, decreased by $47.5
million, or 7.2%, in 2010. Residential mortgages have decreased
$8.9 million, or 3.1%, as the majority of the residential mortgage
activity was in the 30 year fixed rate category, a product which
the Bank currently sells in the secondary market with servicing
retained, while Home Equity Lines of Credit increased by $4.7
million, or 6.8%. Commercial real estate loans decreased $38.9
million, or 14.7%, primarily due to loan payoffs and specific loan
charge-offs during the year. Additionally, in the fourth quarter of
2010 management decided to reduce the Banks portfolio of out of
market commercial real estate loans by executing the sale of
approximately $16.2 million of these loans. The available-for-sale
investment portfolio increased by $18.3 million, or 10.9%, while
cash and cash equivalents decreased by $13.1 million, or 32.5%, at
December 31, 2010 as compared to the prior year end.
Deposits have increased by $33.9 million, or 5.2%, to
$685.2 million from a balance of $651.4 million at December
31, 2009. The Company had increases in most deposit categories,
with the largest increase in relationship savings balances which
increased $16.8 million, or 13.4%. Money market accounts and
certificates of deposit also experienced good growth in 2010,
increasing $5.5 million, or 8.8%, and $8.4 million, or 2.9%,
respectively. As part of a strategy to improve net interest margin
(NIM) going forward, the Bank prepaid approximately $34.7 million
of FHLB advances during the fourth quarter of 2010. This prepayment
along with other maturities throughout the year reduced the balance
of FHLB advances by $55.0 million, or 34.3%, at December 31, 2010
as compared to the end of 2009.
Overall stockholders’ equity decreased by $9.8 million, or 8.1%,
in 2010 as equity was impacted by the net loss of $7.9 million, the
declaration of a dividend of $0.05 per share during each quarter of
2010, a decrease in the unrealized gain on available-for-sale
investment securities and the purchase of 104,000 shares of stock
at an average price of $8.57 per share as part of the Stock
Repurchase Program announced in March 2009. These decreases to
equity were partially offset by the amortization of unearned
compensation.
Total nonperforming assets (NPAs) were $15.0 million at December
31, 2010, a decrease of $5.8 million as compared to the end of
2009. This decrease was primarily the result of the Bank charging
off $12.6 million of loan balances, $4.3 million of which had been
reserved for prior to 2010. These charge-offs also reduced the
overall ratio of nonperforming assets to total assets to 1.63% at
December 31, 2010 as compared to 2.20% at December 31, 2009. Total
NPAs include $2.2 million of other real estate owned (OREO) as of
December 31, 2010 as compared to $1.2 million at the end of
2009.
The provision for loan losses was $2.1 million in the fourth
quarter of 2010, with a portion attributable to the out of market
commercial real estate loans sold during the quarter. The quarterly
provision represents a decrease of $431,000 as compared to the same
period in 2009. Through December 31, 2010 the provision expense was
$10.5 million, which represents an increase of $5.6 million as
compared to 2009. This increase reflected both the difference in
the amount of and mix of the net change in loan balances in each
period as well as higher specific reserves established against
certain loans in 2010. Additionally, as part of a continuous review
and analysis of current market and economic conditions by
management, the Company adjusted the reserve ratio applied to
certain loan categories in 2010. The loan charge-offs also resulted
in the reduction in the ratio of the allowance for loan losses to
total loans to 1.47% at December 31, 2010, as compared to 1.67% at
December 31, 2009.
The Company’s net interest income decreased by $355,000, or
5.3%, in the fourth quarter of 2010 as compared to the same period
in 2009 and by $1.1 million, or 3.9%, for all of 2010 as compared
to 2009. The NIM was 2.90% for the three months ended December 31,
2010, a decrease of 13 basis points from the third quarter of 2010,
and a decrease of 15 basis points from the fourth quarter of 2009.
For all of 2010, the NIM was 3.05% as compared to 3.13% in 2009 as
decreases to the cost of funds resulting from the Bank’s diligent
efforts in lowering deposit costs were offset by a decrease in
asset yields.
Non-interest income for the fourth quarter decreased $157,000
from the same period of 2009. Year to date, non-interest income
totaled $3.2 million as compared to a net charge of $4.6 million
for 2009. The primary cause of the improvement year to date was the
decrease in the amount of writedowns taken on investments deemed to
be OTTI as well as an increase in the net gain on the sale of
investment securities. The Company recorded $3.9 million of OTTI
credit losses on certain limited partnership and equity investments
during 2010 as compared to a charge of $7.2 million on certain
bonds, equities and limited partnership investments in 2009.
Similarly, the Company recorded a net gain of $2.0 million on the
sale of investments in 2010 as compared to a net loss of $3.0
million in 2009. The Company also incurred a charge of $1.5 million
in the forth quarter of 2010 related to the prepayment of certain
FHLB advances. Portfolio management fees increased $961,000, or
95.4%, as a result of Legacy’s acquisition of the Renaissance
Investment Group, LLC in the second quarter of 2010. Legacy also
had increases in customer fees and insurance and other fees,
partially offset by a decrease on the gain on sale of
mortgages.
Operating expenses increased by $1.3 million, or 18.7%, for the
fourth quarter of 2010 as compared to the same period of 2009, and
by $2.2 million, or 7.7%, year to date. Salaries and benefits were
impacted by severance and other management restructuring expenses
of approximately $494,000 in the twelve month period ending
December 31, 2010. Full year increases in data processing expenses
were partially offset by decreases in FDIC deposit insurance,
occupancy and advertising expense. The increase in professional
fees in 2010 is primarily the result of the Company incurring
$473,000 related to the merger transaction with Berkshire Hills
Bancorp, Inc. announced in December 2010. The increase in other
general and administration expenses was primarily due to higher
expenses related to OREO and other commercial real estate workout
expenses of $528,000 and $972,000 for the three and twelve months
ending December 31, 2010, respectively, as compared to $142,000 and
$163,000 in the same periods of 2009. Other general and
administrative expenses also include $40,000 and $107,000 for the
three and twelve months ending December 31, 2010, respectively, in
amortization of intangibles acquired as part of the Company’s
acquisition of substantially all of the assets of Renaissance. The
Company’s core efficiency ratio (reported efficiency ratio net of
effect of non-core adjustments) for the quarter has increased to
93.1% as compared to 85.0% in the fourth quarter of 2009 primary
due to the decrease in net investment income and the increase in
operating expenses. Year to date the core efficiency ratio has
increased to 90.4% in 2010 from 83.7% in 2009.
CONFERENCE CALL
J. Williar Dunlaevy, Chairman and Chief Executive Officer,
Patrick J. Sullivan, President, and Paul H. Bruce, Chief Financial
Officer, will host a conference call at 3:00 p.m. (Eastern Time) on
Thursday January 27, 2011. Persons wishing to access the conference
call may do so by dialing 877-407-0778. Replays of the conference
call will be available beginning January 27, 2011 at 6:00 p.m.
(Eastern Time) through February 27, 2011 at 11:59 p.m. (Eastern
Time) by dialing 877-660-6853 and using Account #286 and Conference
ID #364753 (both numbers are needed to access the replay).
FORWARD LOOKING STATEMENTS
Certain statements herein constitute “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. These statements are based on the beliefs and
expectations of management, as well as the assumptions made using
information currently available to management. Since these
statements reflect the views of management concerning future
events, these statements involve risks, uncertainties and
assumptions. As a result, actual results may differ from those
contemplated by these statements. Forward-looking statements can be
identified by the fact that they do not relate strictly to
historical or current facts. They often include words like
“believe,” “expect,” “anticipate,” “estimate,” and “intend” or
future or conditional verbs such as “will,” “would,” “should,”
“could” or “may.” Certain factors that could cause actual results
to differ materially from expected results include changes in the
interest rate environment, changes in general economic conditions,
legislative and regulatory changes that adversely affect the
businesses in which Legacy Bancorp is engaged and changes in the
securities market. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as
of the date of this release and the associated conference call. The
Company disclaims any intent or obligation to update any
forward-looking statements, whether in response to new information,
future events or otherwise.
NON-GAAP FINANCIAL MEASURES
In addition to results presented in accordance with GAAP, this
press release contains certain non-GAAP financial measures. We
believe that providing certain non-GAAP financial measures, such as
core efficiency ratio, provides investors with information useful
in understanding our financial performance, our performance trends
and financial position. A reconciliation of non-GAAP to GAAP
financial measures is included in the accompanying financial
tables, elsewhere in this report.
LEGACY BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED
BALANCE SHEETS (Dollars in thousands, except per share
amounts) December 31, December 31, 2010 2009
ASSETS (Unaudited) Cash and due from banks $ 12,186 $ 11,281
Short-term investments 14,906 28,874
Cash and cash equivalents 27,092 40,155 Securities - Available for
sale 185,688 167,426 Securities - Held to maturity 97 97 Restricted
equity securities and other investments - at cost 16,546 17,193
Loans held for sale 3,839 706 Loans, net of allowance for loan
losses of $9,010 in 2010 and $11,089 in 2009 607,102 652,628
Premises and equipment, net 19,142 19,568 Accrued interest
receivable 2,631 3,306 Goodwill, net 11,558 9,730 Other intangible
assets 3,625 2,654 Net deferred tax asset 12,684 10,202 Bank-owned
life insurance 17,047 16,263 Foreclosed assets 2,216 1,195 Other
assets 7,610 5,142 $ 916,877 $
946,265
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits: Noninterest-bearing $ 75,116 $ 75,232 Interest-bearing
610,129 576,146 Total deposits 685,245
651,378 Securities sold under agreements to repurchase 5,329 6,386
Federal Home Loan Bank advances 105,388 160,352 Mortgagors' escrow
accounts 1,211 1,058 Accrued expenses and other liabilities
8,145 5,724 Total liabilities 805,318
824,898 Commitments and contingencies
Stockholders' Equity: Preferred Stock ($.01 par value, 10,000,000
shares - - authorized, none issued or outstanding) Common Stock
($.01 par value, 40,000,000 shares authorized and 10,308,600 issued
at December 31, 2010 and December 31, 2009; 8,631,732 outstanding
at December 31, 2010 and 8,734,712 outstanding at December 31,
2009) 103 103 Additional paid-in-capital 103,168 102,788 Unearned
Compensation - ESOP (6,956 ) (7,322 ) Unearned Compensation -
Equity Incentive Plans (1,053 ) (2,078 ) Retained earnings 39,114
48,998 Accumulated other comprehensive income (loss) (233 ) 711
Treasury stock, at cost (1,676,868 shares at December 31, 2010 and
1,573,888 shares at December 31, 2009) (22,584 )
(21,833 ) Total stockholders' equity 111,559
121,367 $ 916,877 $ 946,265
LEGACY BANCORP,
INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF
OPERATIONS (Dollars in thousands, except per share
amounts) Three Months Ended December 31, Twelve
Months Ended December 31, 2010 2009
2010 2009 (Unaudited)
(Unaudited) Interest and dividend income: Loans $ 8,687 $ 9,371 $
36,014 $ 38,849 Securities: Taxable 951 1,390 4,485 6,302
Tax-Exempt 32 167 442 656 Short-term investments 5
2 23 11 Total interest
and dividend income 9,675 10,930
40,964 45,818 Interest expense: Deposits 2,018
2,611 8,928 11,071 Federal Home Loan Bank advances 1,351 1,649
5,600 7,210 Other borrowed funds 6 15
30 67 Total interest expense
3,375 4,275 14,558 18,348
Net interest income 6,300 6,655 26,406 27,470 Provision for
loan losses 2,118 2,549 10,468
4,883 Net interest income after provision for
loan losses 4,182 4,106 15,938
22,587 Non-interest income: Customer
service fees 751 730 2,967 2,870 Portfolio management fees 612 284
1,968 1,007 Income from bank owned life insurance 216 292 689 710
Insurance, annuities and mutual fund fees 70 45 173 129 Gain (loss)
on sales of securities, net 451 (3,273 ) 2,024 (3,032 ) Impairment
losses on securities, net (3,491 ) (571 ) (3,870 ) (7,235 ) Gain
(loss) on sales of loans, net 358 135 607 860 Miscellaneous 44 45
116 78 FHLB prepayment penalty (1,481 ) -
(1,481 ) - Total non-interest income (loss)
(2,470 ) (2,313 ) 3,193 (4,613 )
Non-interest expenses: Salaries and employee benefits 3,819 3,411
14,797 13,754 Occupancy and equipment 956 919 3,912 3,921 Data
processing 731 635 2,934 2,659 Professional fees 974 319 1,924
1,083 Advertising 97 333 1,047 1,405 FDIC deposit insurance 285 301
1,109 1,491 Other general and administrative 1,607
1,217 5,320 4,519 Total
non-interest expenses 8,469 7,135
31,043 28,832 Loss before income
taxes (6,757 ) (5,342 ) (11,912 ) (10,858 ) Benefit for
income taxes (2,260 ) (1,527 ) (4,016 )
(3,060 ) Net loss $ (4,497 ) $ (3,815 ) $ (7,896 ) $ (7,798
) Earnings (loss) per share Basic $ (0.57 ) $ (0.48 ) $ (0.99 ) $
(0.98 ) Diluted $ (0.57 ) $ (0.48 ) $ (0.99 ) $ (0.98 ) Weighted
average shares outstanding Basic 7,950,583 7,966,446 7,990,167
7,977,363 Diluted 7,950,583 7,966,446 7,990,167 7,977,363
LEGACY
BANCORP, INC. AND SUBSIDIARIES SELECTED CONSOLIDATED
FINANCIAL HIGHLIGHTS AND OTHER DATA (Dollars in
thousands except per share data)
Three Months Ended
December 31, Twelve Months Ended December 31,
2010 2009 2010 2009 Financial
Highlights: Net interest income $ 6,300 $ 6,655 $ 26,406 $
27,470 Net income (loss) (4,497 ) (3,815 ) (7,896 ) (7,798 ) Per
share data: Earnings (loss) — basic (0.57 ) (0.48 ) (0.99 ) (0.98 )
Earnings (loss) — diluted (0.57 ) (0.48 ) (0.99 ) (0.98 ) Dividends
declared 0.05 0.05 0.20 0.20 Book value per share — end of period
12.92 13.89 12.92 13.89 Tangible book value per share — end of
period 11.17 12.48 11.17 12.48
Ratios and Other Information:
Return (loss) on average assets (1.89 ) % (1.61 ) % (0.84 ) % (0.82
) % Return (loss) on average equity (15.04 ) % (12.13 ) % (6.48 ) %
(6.20 ) % Net interest rate spread (1) 2.65 % 2.71 % 2.79 % 2.78 %
Net interest margin (2) 2.90 % 3.05 % 3.05 % 3.13 % Efficiency
ratio (3) 120.1 % 85.0 % 96.1 % 84.9 % Average interest-earning
assets to average interest-bearing liabilities 115.98 % 117.24 %
115.86 % 116.87 %
At period end: Stockholders’ equity $
111,559 $ 121,367 Total assets 916,877 946,265 Equity to total
assets 12.2 % 12.8 % Non-performing assets to total assets 1.63 %
2.20 % Non-performing loans to total loans 2.07 % 2.96 % Allowance
for loan losses to non-performing loans 70.70 % 56.64 % Allowance
for loan losses to total loans 1.47 % 1.67 % Number of full service
offices 19 19 (1) The net interest rate spread represents the
difference between the yield on total average interest-earning
assets and the cost of total average interest-bearing liabilities
for the period. (2) The net interest margin represents net interest
income as a percent of average interest-earning assets for the
period. (3) The efficiency ratio represents non-interest expense
for the period minus expenses related to the amortization of
intangible assets other than the amortization of mortgage servicing
rights, divided by the sum of net interest income (before the loan
loss provision) and non-interest income (excluding net gains or
losses on the sale or impairment of securities).
Analysis of Net Interest Margin – Fourth Quarter:
Three Months Ended December 31, 2010 Three
Months Ended December 31, 2009
AverageOutstandingBalance
Interest Yield/ Rate(1)
AverageOutstandingBalance
Interest Yield/ Rate(1)
(Dollars in
thousands) Interest-earning assets:
Loans - net (2) $ 630,428 $ 8,687 5.51 % $ 658,100 $ 9,371
5.70 % Investment securities 226,283 983 1.74 % 196,888 1,557 3.16
% Short-term investments 13,430 5 0.15
% 17,088 2 0.05 % Total
interest-earning assets 870,141 9,675 4.45 % 872,076 10,930 5.01 %
Non-interest-earning assets 79,580 73,540 Total
assets $ 949,721 $ 945,616
Interest-bearing liabilities:
Savings deposits $ 52,685 28 0.21 % $ 50,674 37 0.29 % Relationship
savings 141,432 214 0.61 % 125,059 355 1.14 % Money market 65,181
87 0.53 % 63,813 139 0.87 % NOW accounts 47,291 32 0.27 % 44,096 39
0.35 % Certificates of deposit 296,302 1,657
2.24 % 289,687 2,041 2.82 %
Total interest-bearing deposits 602,891 2,018 1.34 % 573,329 2,611
1.82 % Borrowed funds 147,368 1,357
3.68 % 170,523 1,664 3.90 % Total
interest-bearing liabilities 750,259 3,375 1.80 % 743,852 4,275
2.30 % Non-interest-bearing liabilities 79,902 75,977
Total liabilities 830,161 819,829 Equity 119,560
125,787 Total liabilities and equity $ 949,721 $ 945,616 Net
interest income $ 6,300 $ 6,655 Net interest rate spread (3)
2.65 % 2.71 % Net interest-earning assets (4) $ 119,882 $ 128,224
Net interest margin (5) 2.90 % 3.05 % Average
interest-earning assets to interest-bearing liabilities 115.98 %
117.24 % (1) Yields and rates for the three months ended
December 31, 2010 and 2009 are annualized. (2) Includes loans held
for sale and non-accrual loans. (3) Net interest rate spread
represents the difference between the yield on total average
interest-earning assets and the cost of total average
interest-bearing liabilities. (4) Net interest-earning assets
represents total interest-earning assets less total
interest-bearing liabilities. (5) Net interest margin represents
net interest income divided by average total interest-earning
assets.
Analysis of Net Interest Margin – Year to date:
Twelve Months Ended December 31, 2010
Twelve Months Ended December 31, 2009
AverageOutstandingBalance
Interest Yield/ Rate(1)
AverageOutstandingBalance
Interest Yield/ Rate(1)
(Dollars in
thousands) Interest-earning assets:
Loans - net (2) $ 641,498 $ 36,014 5.61 % $ 675,661 $ 38,849
5.75 % Investment securities 209,559 4,927 2.35 % 181,642 6,958
3.83 % Short-term investments 13,959 23
0.16 % 19,165 11 0.06 % Total
interest-earning assets 865,016 40,964 4.74 % 876,468 45,818 5.23 %
Non-interest-earning assets 79,219 73,378 Total
assets $ 944,235 $ 949,846
Interest-bearing liabilities:
Savings deposits $ 52,076 125 0.24 % $ 50,724 170 0.34 %
Relationship savings 137,742 1,108 0.80 % 123,297 1,595 1.29 %
Money market 66,007 433 0.66 % 65,602 684 1.04 % NOW accounts
45,647 131 0.29 % 43,527 173 0.40 % Certificates of deposit
291,520 7,131 2.45 % 282,730
8,449 2.99 % Total interest-bearing deposits 592,992
8,928 1.51 % 565,880 11,071 1.96 % Borrowed funds 153,591
5,630 3.67 % 184,081
7,277 3.95 % Total interest-bearing liabilities 746,583
14,558 1.95 % 749,961 18,348 2.45 % Non-interest-bearing
liabilities 75,848 74,007 Total liabilities 822,431
823,968 Equity 121,804 125,878 Total liabilities and
equity $ 944,235 $ 949,846 Net interest income $ 26,406 $
27,470 Net interest rate spread (3) 2.79 % 2.78 % Net
interest-earning assets (4) $ 118,433 $ 126,507 Net interest
margin (5) 3.05 % 3.13 % Average interest-earning assets to
interest-bearing liabilities 115.86 % 116.87 % (1) Yields
and rates for the twelve months ended December 31, 2010 and 2009
are annualized. (2) Includes loans held for sale and non-accrual
loans. (3) Net interest rate spread represents the difference
between the yield on total average interest-earning assets and the
cost of total average interest-bearing liabilities. (4) Net
interest-earning assets represents total interest-earning assets
less total interest-bearing liabilities. (5) Net interest margin
represents net interest income divided by average total
interest-earning assets.
Loan Portfolio Information:
At December 31, 2010:
Portfolio Balance Nonperforming
(NPAs) Troubled Debt Restructurings % of
Included Not Included Amount
Percent Amount Portfolio In
NPAs In NPAs Total (Dollars in
thousands) Mortgage loans on real estate: Residential $ 276,765
45.02 % $ 4,176 1.51 % $ - $ 356 $ 356 Commercial - In market
174,621 28.40 8,128 4.65 2,451 1,568 4,019 Commercial - Out of
market 50,406 8.20 - - - - - Home equity 74,328 12.09
120 0.16 - - - 576,120 93.71
12,424 2.16 2,451 1,924 4,375
Other loans: Commercial 28,123 4.58 315 1.12 - 174 174 Consumer and
other 10,518 1.71 5 0.05 - -
- 38,641 6.29 320 0.83 -
174 174 Total loans 614,761 100.00 % $ 12,744 2.07 % $ 2,451
$ 2,098 $ 4,549 Other Items: Net deferred loan costs
1,351 Allowance for loan losses (9,010) Total loans, net $ 607,102
Other information: Other real estate owned (OREO) 2,216 Total
nonperforming assets $ 14,960 Non-performing assets to total assets
1.63%
At December 31, 2009: Portfolio
Balance Nonperforming (NPAs) Troubled Debt
Restructurings % of Included Not Included
Amount Percent Amount
Portfolio In NPAs In NPAs
Total (Dollars in thousands) Mortgage loans on real
estate: Residential $ 285,618 43.12 % $ 4,822 1.69 % $ - $ - $ -
Commercial - In market 189,945 28.68 12,041 6.34 5,805 892 6,697
Commercial - Out of market 73,951 11.17 1,901 2.57 - 3,995 3,995
Home equity 69,625 10.51 70 0.10 -
- - 619,139 93.48 18,834 3.04
5,805 4,887 10,692 Other loans: Commercial
31,373 4.74 743 2.37 100 - 100 Consumer and other 11,791
1.78 1 0.01 - - - 43,164
6.52 744 1.72 100 - 100 Total
loans 662,303 100.00 % $ 19,578 2.96 % $ 5,905 $ 4,887
$ 10,792 Other Items: Net deferred loan costs 1,414
Allowance for loan losses (11,089) Total loans, net $ 652,628 Other
information: Other real estate owned (OREO) 1,195 Total
nonperforming assets $ 20,773 Non-performing assets to total assets
2.20%
Securities and Other Investment Portfolio
Composition:
At December 31, 2010 At December 31,
2009 Amortized Cost Fair Value
Amortized Cost Fair Value (Dollars in
thousands) Securities available for sale:
Government-sponsored enterprises (GSE) $ 132,221 $ 131,624 $ 80,393
$ 79,976 Municipal bonds 3,145 3,145 17,521 17,875 Corporate bonds
and other obligations 401 402 1,321 1,351 GSE residential
mortgage-backed 6,370 6,594 29,591 30,503 U.S. Government
guaranteed residential mortgage-backed 42,775 42,967
33,625 33,636 Total debt securities 184,912
184,732 162,451 163,341 Marketable equity
securities 888 956 3,239 4,085 Total
securities available for sale 185,800 185,688
165,690 167,426
Securities held to maturity:
Other bonds and obligations 97
97 97 97
Restricted equity securities and other
investments: Federal Home Loan Bank of Boston stock 10,932
10,932 10,932 10,932 Savings Bank Life Insurance 1,709 1,709 1,709
1,709 Real estate partnerships 3,815 3,815 4,397 4,397 Other
investments 90 90 155 155 Total
restricted equity securities and other investments 16,546
16,546 17,193 17,193 Total securities $
202,443 $ 202,331 $ 182,980 $ 184,716
Deposit Accounts Composition:
At December 31, 2010 At December 31,
2009 Balance Percent Balance
Percent (Dollars in thousands) Deposit type:
Demand $ 75,116 10.96 % $ 75,232 11.55 % Regular savings 53,504
7.81 49,883 7.66 Relationship savings 142,110 20.74 125,328 19.24
Money market deposits 68,611 10.01 63,077 9.68 NOW deposits
48,197 7.03 48,546 7.45 Total transaction
accounts 387,538 56.55 362,066 55.58
Term certificates less than $100,000 162,408 23.70 174,284 26.76
Term certificates $100,000 or more 135,299 19.75
115,028 17.66 Total certificate accounts
297,707 43.45 289,312 44.42 Total deposits $
685,245 100.00 % $ 651,378 100.00 %
Reconciliation of Non-GAAP Financial Measures
This press release contains financial information determined by
methods other than in accordance with accounting principles
generally accepted in the United States of America (“GAAP”). The
Company’s management uses these non-GAAP measures in its analysis
of the Company’s performance. These measures typically adjust GAAP
performance measures to exclude significant gains or losses that
are expected to be non-recurring. Because these items and their
impact on the Company’s performance are difficult to predict,
management believes that presentations of financial measures
excluding the impact of these items provide useful supplemental
information that is essential to a proper understanding of the
operating results of the Company’s core businesses. These
disclosures should not be viewed as a substitute for operating
results determined in accordance with GAAP, nor are they
necessarily comparable to non-GAAP performance measures that may be
presented by other companies.
Three Months Ended December 31, Twelve
Months Ended December 31, 2010 2009
2010 2009 (Dollars in thousands) Net
Income (loss) (GAAP) $ (4,497 ) $ (3,815 ) $ (7,896 ) $ (7,798
) Less: (Gain) loss on sale or impairment of securities, net 3,040
3,844 1,846 10,267 Add: FHLB advance prepayment charge 1,481 -
1,481 - Add: FDIC deposit insurance special assessment - - - 423
Add: Merger related expenses 473 - 473 - Adjustment: Income taxes
related to non- recurring adjustments noted above (1,859 ) (1,173 )
(1,362 ) (3,261 ) Adjustment to deferred tax valuation reserves
255 1,409 516
1,409
Net Income (loss)
(Core) $ (1,107 ) $ 265 $ (4,942 )
$ 1,040
Efficiency Ratio (As Reported) 120.1 %
85.0 % 96.1 % 84.9 % Effect of gain or loss on sale or impairment
of securities, net - - - - Effect of FHLB advance prepayment charge
(20.4 ) - (4.3 ) - Effect of FDIC deposit insurance special
assessment - - - (1.2 ) Effect of merger related expenses
(6.6 ) - (1.4 ) -
Efficiency Ratio (Core) 93.1 %
85.0 % 90.4 % 83.7 %
Legacy Bancorp (NASDAQ:LEGC)
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