| |
Daily DigestSchool Closing
Conte Middle School in North Adams will be closed Friday, December 5, as the investigation into a mercury spill continues. |
Light'em Up!
 (2).jpg) North Adams kicks off the holiday season with its annual treelighting on Thursday, Dec. 4, at 5:30 p.m.
Pittsfield lights its tree on Friday, Dec. 5, at 6 at Park Square. |
Like to Write?
 Passionate about local sports? Into the environment? Obsessive about local meetings?
Let your neighbors know what's going on in Berkshire County! iBerkshires accepts submissions about local events, news and opinion pieces. There are openings for freelance work, too, for qualified candidates. E-mail tdaniels@iberkshires.com to find out more. |
Got Flu?
Track its spread through Google! |
| Need to contact iBerkshires? Here's how. |
ObituariesWhat's Playing
A television-hero pup (John Travolta) thinks he's a real superdog in the Disney film "Bolt." |
Sales FliersColumnists | Independent Investor
|
Other StuffRelated Stories |
| |
Legacy Bancorp, Inc. Reports Results for Quarter Ended June 30, 2008 - July 31, 2008
PITTSFIELD - Legacy Bancorp, Inc. (the “Company” or “Legacy”) (NASDAQ: LEGC), the holding company for Legacy Banks (the “Bank”), today reported net income of $914,000, or $0.11 per diluted share for the quarter ended June 30, 2008, which represents an increase of $199,000, or 27.8%, from net income of $715,000 in the second quarter of 2007. Year to date, the Company has generated net income of $1.3 million, or $0.16 per diluted share, an increase of $113,000, or 9.3%, from the first six months of 2007. The increase in both periods was primarily the result of higher net-interest income, offset somewhat by lower non-interest income and higher operating expenses. Book value per share and tangible book value per share were $14.35 and $12.94, respectively, at June 30, 2008.
J. Williar Dunlaevy, Chief Executive Officer, commented “We are pleased to report very solid results for the 2008 second quarter, with a 27.8% earnings increase over the 2007 second quarter. Earnings per share for the quarter came in at eleven cents, an increase of 37.5% over the corresponding 2007 number. Core earnings growth was even more impressive as it was 71.2% ahead of a year ago. Our core efficiency ratio was 78.7%, compared with 86.5% a year ago.
“One of the major factors behind the improved financial performance is that we were able to increase our net interest margin to 3.30%, up from 3.00% a year ago, and up from 2.89% in the fourth quarter of 2007. Legacy associates accomplished this with solid loan growth, disciplined pricing on both sides of the balance sheet, and a commitment to growing core deposit and multi-service relationships. Our operating expenses were up 6.4% over the same quarter a year ago, which is impressive given that we were operating with 16 offices this year compared to 11 in 2007. Again, we credit our associates for this accomplishment. They truly have embraced our Delta Project and have responded positively to the efficiency improvements we implemented late in 2007.
“In spite of the difficult economic environment and the credit and banking crisis, our improved earnings, asset quality, and capital position are strengths that distinguish Legacy. Those strengths will continue to be the foundation for our operations. Legacy has not participated in or invested in sub-prime or predatory lending. If the banking world followed fundamental community banking lending practices, there would probably not be such a severe mortgage crisis today.
“Earlier this month we opened a de novo office at 39 North Pearl Street, Albany, New York, in the heart of the Capital District. We have great expectations for this, our newest and 17th office. Previously we announced regulatory approval for our 18th office in Latham, NY, and we anticipate that opening in the fourth quarter.”
The Company’s total assets increased by $566,000, or 0.1%, from $924.5 million at December 31, 2007 to $925.1 million at June 30, 2008. Within the overall balance sheet, the gross loan portfolio, excluding loans held for sale, increased by $29.4 million, or 4.5%, in the first six months of 2008, almost all of which occurred in the second quarter. Commercial real estate and other commercial loans increased $24.2 million, or 10.1%, to $264.1 million. Residential mortgages increased by $3.4 million, or 1.0%, during the first six months. Much of the mortgage loan production was in the 30 year fixed rate category, a product which the Bank currently sells. The investment portfolio has increased by $12.6 million, or 8.3%, while cash and cash equivalents decreased $43.3 million, or 69.6%, at June 30, 2008 as compared to the prior year end. Excess short-term cash at year end was reinvested in securities and loans during the first two quarters of the year.
Deposits decreased by $19.4 million, or 3.2%, to $591.0 million. This overall decline was caused by a decrease of $22.7 million, or 8.3%, in certificates of deposit (CDs). Other decreases in certain money market and savings accounts were offset by an increase in Smart Banking/relationship savings accounts of $13.4 million, or 11.9%. The Bank aligned its CD pricing with the yield curve and allowed the runoff of high rate, single-service CD’s. To offset that outflow, the Bank increased its level of advances from the Federal Home Loan Bank of Boston by $25.1 million, or 15%, at June 30, 2008 as compared to the end of 2007. This shift of funding sources allowed the Bank to take advantage of lower cost borrowing alternatives while also lengthening certain liabilities, which in turn improved its asset and liability management position.
Stock repurchases were the primary contributor to an overall decrease in stockholders’ equity of $4.8 million, or 3.6%, as of June 30, 2008. Legacy purchased 303,600 shares of stock at an average price of $13.85 per share in the first two quarters of 2008 as part of the Stock Repurchase Program announced in December 2007. Total equity was positively affected by a contribution of $1.3 million from net income and the amortization of unearned compensation. These increases to equity were offset by the declaration of a dividend of $0.05 per share during each of the first and second quarters of 2008 as well as an increase in the unrealized loss on available for sale investment securities.
Asset quality remains strong at the close of the second quarter. As mentioned in the Company’s first quarter 2008 earnings call, overall nonperforming loans had increased to $7.7 million as of March 31, 2008 due primarily to a $5.5 million commercial construction loan which the Bank placed on non-accrual status in the first quarter. As of June 30, 2008 total nonperforming loans has decreased to $6.4 million. The additions to nonperforming loans during the year have resulted in an increase in their ratio to total assets to 0.70% at June 30, 2008 from 0.17% at December 31, 2007. Legacy is, and always has been, diligent in evaluating its loan portfolio, especially given the current economic environment.
The provision for loan losses increased by $153,000, or 79.3%, in the second quarter and by $133,000 or 30.4% for the full six months as compared to the same periods in 2007. This increase was a reflection of both the difference in the amount of and mix of loan growth for the respective periods, as well as higher net charge-offs in 2008. The allowance for loan losses to total loans stood at 0.85% at June 30, 2008, as compared to 0.85% at December 31, 2007 and 0.81% at June 30, 2007.
The Company’s net interest income increased by $1.1 million, or 18.6%, in the second quarter, and by $1.4 million, or 11.6% year to date as compared to the same periods in 2007. The net interest margin (“NIM”) was 3.30% for the three months ended June 30, 2008, an increase of 30 basis points from both the first quarter of 2008 and the second quarter of 2007, as changes in the yield curve have enabled the Bank to reprice its liabilities downward at a faster rate than its assets. Year to date the NIM was 3.15%, which represents an increase of 7 basis points from the same period of 2007.
Non-interest income for the quarter totaled $1.4 million, a decrease of $325,000, or 18.6%, compared to the second quarter of 2007. Year to date, non-interest income has decreased by $372,000, or 12.6%, as compared to the first half of 2007. The decrease in both periods is primarily due to the change from year to year in the net gain or loss on the sale of securities and an accounting charge for securities which are deemed to be other than temporarily impaired. The Bank recorded a net gain of $41,000 for the second quarter of 2008, and a net loss of $118,000 year to date as compared to net gains of $305,000 and $393,000 in the same periods in 2007. Contributing to this decrease from year to year was the write down of preferred stock issued by the Federal Home Loan Mortgage Corporation and Federal National Mortgage Association in the first quarter of 2008, resulting in an impairment charge of $246,000 as well as other impairment charges in the second quarter. The year-to-date decrease in non-interest income was partially offset by an increase of $121,000, or 99.2%, in income from bank-owned life insurance (BOLI) as a result of the Bank’s investment in $9.8 million of BOLI during the second quarter of 2007.
Operating expenses increased by $403,000, or 6.4%, for the second quarter of 2008 as compared to the same period of 2007, and by $888,000, or 7.1% year to date. The December 2007 acquisition of five full service branch offices in eastern New York from First Niagara Bank (First Niagara) has contributed to increases in occupancy and equipment, data processing, advertising and other general and administrative (G&A) expenses in both the quarter and year to date totals. Salary and benefit increases related to these offices were offset by decreases achieved from the reduction in workforce which occurred at the end of 2007. Salary and benefit expenses also benefited from a $439,000 decrease in amortization expense related to the 2006 Equity Incentive Plan due primarily to the accelerated nature of the amortization. Additionally, other G&A expenses increased as a result of the amortization of the $3.2 million core deposit intangible acquired as part of the First Niagara transaction. The improvement to net interest income helped the Company’s core efficiency ratio (reported efficiency ratio net of the effect of non-core adjustments) for the quarter improve to 78.7% from 86.5% in the year earlier period. Year to date, the core efficiency ratio has decreased to 81.7% in 2008 from 86.4% in the first six months of 2007. |
|
Enter your email address below to receive our FREE iBerkshires.com Newsletter
|
