Legacy Bancorp, Inc. Reports Results for Quarter Ended September 30, 2009
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PITTSFIELD, Mass.--(BUSINESS WIRE)-- Legacy Bancorp, Inc. (the "Company" or "Legacy") (NASDAQ: LEGC), the holding company for Legacy Banks (the "Bank"), today reported a net loss of $1.7 million, or $0.21 per diluted share for the quarter ended September 30, 2009, as compared to net income of $564,000, or $0.07 per diluted share in the third quarter of 2008. Year to date, the Company has incurred a net loss of $4.0 million, or $0.50 per diluted share, as compared to net income of $1.9 million, or $0.23 per diluted share for the same period in 2008. The decrease in the third quarter was primarily the result of an increase in the loss taken on investments deemed to be other-than-temporarily impaired (OTTI), while the year to date decrease is primarily a result of the OTTI charges, an increase in the provision expense for loan losses, and an increase in the deposit insurance premium paid to the Federal Deposit Insurance Corporation (FDIC). The total shares outstanding resulted in a book value per share and tangible book value per share of $14.21 and $12.78, respectively, at September 30, 2009.
J. Williar Dunlaevy, Chief Executive Officer, commented "Obviously we are disappointed to be reporting an earnings loss through the third quarter of 2009. Major factors in these numbers are the regular and special FDIC assessments, which impacted all banks, and charges for investments determined to be OTTI. Our Loan Loss Reserve Provision for the quarter was actually relatively low, although higher provision expenses were incurred in the first and second quarters.
"The combined FDIC assessments were roughly $1.1 million greater in the first nine months of 2009 than 2008. Every bank in the country has experienced charges of this magnitude as the FDIC recapitalizes its insurance fund which has been depleted with record numbers of problem institutions.
"Charges for investments deemed OTTI primarily involve mortgage backed securities and four limited partnerships related to commercial real estate finance. We have the ability and intent to hold these investments long term and anticipate a more satisfactory outcome. Nevertheless, we have determined that the current depreciation falls within the definition of OTTI.
"The Bank's loan loss reserve ratio to loans outstanding has increased in the prior year, as has the year-to-date provision for loan losses. While the level of actual charge-offs in 2009 has been relatively low, we remain very wary of the economic situation and its impact on our customers, and will continue to be until we see real gains in employment and in investment in new housing. Nevertheless, with our strong capital position, Legacy Bancorp is well positioned to not only weather the economic storm, but to take advantage of opportunities that it may present.
"Legacy continues to be a very well capitalized institution, and the capital impact of the reported operating loss was offset by an improvement in the available for sale calculation for investment securities, as well as the amortization of non-cash expense related to the equity incentive plan. Our capital or equity to asset ratio is a very strong 13%.
"The increase in the net interest margin for the quarter was encouraging and was a result of careful asset liability management, including deposit growth which enabled us to pay off higher rate Federal Home Loan Bank advances as they matured. The deposit growth was concentrated in core deposits, which is one of our major growth and financial strategies."
The Company's total assets increased $8.9 million, or 0.9%, from $944.7 million at December 31, 2008 to $953.5 million at September 30, 2009. Within the overall asset balances, the gross loan portfolio, excluding loans held for sale, decreased by $34.0 million, or 5.0% in the first nine months of 2009. While the overall loan balance decreased, commercial real estate and other commercial loans increased by $10.6 million, or 3.8%, to $291.2 million. This increase was offset by a decrease in residential mortgage loans of $50.8 million, or 14.7%, 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. Available for sale securities increased by $43.8 million or 33.1%, while cash and cash equivalents increased $4.9 million or 14.7% at September 30, 2009 as compared to the end of 2008.
Deposits have increased by $39.9 million, or 6.6%, to $648.0 million from a balance of $608.1 million at December 31, 2008. In March of 2009, the Bank closed on the acquisition of a single, full-service branch office located in Haydenville, Massachusetts, which resulted in the assumption of approximately $9.8 million of deposit liabilities. Although all deposit types have experienced growth in 2009, deposits increased primarily in money market accounts and certificates of deposit (CDs) which increased $13.8 million, or 22.9% and $15.6 million or 5.8%, respectively. Advances from the Federal Home Loan Bank of Boston (FHLBB) have decreased by $30.4 million, or 15.4%, at September 30, 2009 as compared to the end of 2008 as the increase in overall deposits allowed the Bank to pay off high rate FHLBB borrowings as they have matured during 2009.
Overall stockholders equity has increased by $156,000, or 0.1%, in the first nine months of 2009. The decreases in equity due to the net loss of $4.0 million, the declaration of a dividend of $0.05 per share during each of the first three quarters of 2009, and the repurchase of 35,100 shares of common stock as part of the Stock Repurchase Plan announced in March 2009 were offset by the amortization of unearned compensation and a decrease in the unrealized loss on available-for-sale investment securities.
Overall nonperforming assets were $16.8 million at September 30, 2009, an increase of $9.2 million as compared to year end, with $3.9 million of this increase being in residential mortgages and $5.1 million in commercial real estate loans. Nonperforming assets as a ratio to total assets was 1.76% at September 30, 2009 as compared to 0.80% at December 31, 2008. Legacy is, and always has been, diligent in evaluating its loan portfolio, especially given the current volatility in the credit markets. Through September 30, 2009 the loan loss provision expense was $2.3 million which represents an increase of $1.8 million as compared to the same period in 2008. This increase in both periods was a reflection of both the difference in the amount of and mix of loan growth for the period, a continuous review and analysis of current market and economic conditions by management, as well as higher specific reserves established against certain loans in 2009. The allowance for loan losses to total loans was 1.33% at September 30, 2009, as compared to 0.95% at December 31, 2008 and 0.84% at September 30, 2008.
The Company's net interest income decreased by $321,000, or 4.4%, in the third quarter, but increased by $230,000, or 1.1% year to date as compared to the same periods in 2008. The net interest margin (NIM) was 3.19% for the three months ended September 30, 2009, a decrease of 20 basis points from the third quarter of 2008, but an increase of 7 basis points from the second quarter of 2009. For the first nine months of 2009 the NIM was 3.16%, a decrease of 7 basis points from the first nine months of 2008 as interest rate changes and the increase in non-performing assets have each contributed to margin compression.
Non-interest income for the third quarter totaled a net charge of $2.2 million, a decrease of $2.7 million from the same period of 2008. Year to date, non-interest income totaled a net charge of $2.3 million, as compared to income of $3.1 million for the first nine months of 2008. The primary cause of the decrease in both periods was an increase in the amount of writedowns taken on investments deemed to be OTTI. The Bank incurred $3.7 million of OTTI charges in the third quarter, and $6.7 million year to date, on certain bonds, equities and limited partnership investments as compared to OTTI charges of $675,000 and $1.3 million in the same periods in 2008. In 2009, the Bank also had decreases in fees from customers, portfolio management and insurance and investment products, income from bank-owned life insurance, and net gains from the sale of securities, offset by an increase on the gain on sale of mortgages.
Operating expenses increased by $135,000 or 2.0%, for the third quarter of 2009 as compared to the same period of 2008 and by $1.5 million, or 7.2%, year to date. New full-service denovo branches opened in July 2008 in Albany, New York and in January 2009 in Latham, New York, as well as the Haydenville branch office acquired in the first quarter of 2009 contributed to increases in occupancy and equipment, data processing, advertising and other general and administrative expenses. Additionally, changes in the deposit insurance assessment formula by the FDIC resulted in an expense of $250,000 in the third quarter and $765,000 in the first nine months of 2009 as compared to an expense of $36,000 and $79,000, respectively in the same periods of 2008. The FDIC also implemented a special assessment during the second quarter of 2009 which resulted in an additional expense of $425,000. As a result of the increase in operating expenses, the Company's core efficiency ratio (reported efficiency ratio net of the effect of non-core adjustments) for the quarter has increased to 82.9% from 77.2% in the third quarter of 2009. Year to date, the core efficiency ratio has increased to 83.2% in 2009 from 80.1% in the first nine months of 2008.
CONFERENCE CALL
J. Williar Dunlaevy, Chairman and Chief Executive Officer, and Paul H. Bruce, Chief Financial Officer, will host a conference call at 3:00 p.m. (Eastern Time) on Thursday October 29, 2009. Persons wishing to access the conference call may do so by dialing 877-407-9205. Replays of the conference call will be available beginning October 29, 2009 at 6:00 p.m. (Eastern Time) through November 5, 2009 at 11:59 p.m. (Eastern Time) by dialing 877-660-6853 and using Account #286 and Conference ID #334594 (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)
September 30, December 31,
2009 2008
ASSETS (Unaudited)
Cash and due from banks $ 12,549 $ 13,245
Short-term investments 25,979 20,350
Cash and cash equivalents 38,528 33,595
Securities - Available for sale 176,108 132,357
Securities - Held to maturity 97 97
Restricted equity securities and other investments - 17,584 20,185
at cost
Loans held for sale 379 -
Loans, net of allowance for loan losses of $8,836
in 2009 and $6,642 in 2008 658,001 695,264
Premises and equipment, net 19,691 19,770
Accrued interest receivable 3,347 3,633
Goodwill, net 9,730 9,687
Net deferred tax asset 9,063 10,023
Bank-owned life insurance 15,972 15,551
Other assets 5,046 4,495
$ 953,546 $ 944,657
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing $ 68,327 $ 66,545
Interest-bearing 579,633 541,543
Total deposits 647,960 608,088
Securities sold under agreements to repurchase 6,400 5,238
Federal Home Loan Bank advances 167,491 197,898
Mortgagors' escrow accounts 1,138 1,015
Accrued expenses and other liabilities 6,259 8,276
Total liabilities 829,248 820,515
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 September 30,
2009 and
December 31, 2008; 8,746,812 outstanding at
September 30,
2009 and 8,781,912 outstanding at December 31, 2008) 103 103
Additional paid-in-capital 102,717 102,475
Unearned Compensation - ESOP (7,505 ) (8,055 )
Unearned Compensation - Equity Incentive Plan (2,097 ) (2,727 )
Retained earnings 53,346 58,534
Accumulated other comprehensive income (loss) (421 ) (4,722 )
Treasury stock, at cost (1,561,788 shares at
September 30, 2009
and 1,526,688 shares at December 31, 2008) (21,845 ) (21,466 )
Total stockholders' equity 124,298 124,142
$ 953,546 $ 944,657
LEGACY BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
Three Months Ended September 30, Nine Months Ended September 30,
2009 2008 2009 2008
(Unaudited) (Unaudited)
Interest and
dividend
income:
Loans $ 9,642 $ 10,564 $ 29,478 $ 31,468
Securities:
Taxable 1,552 1,895 4,911 5,752
Tax-Exempt 167 135 488 377
Short-term 3 24 10 238
investments
Total interest
and dividend 11,364 12,618 34,887 37,835
income
Interest
expense:
Deposits 2,656 3,261 8,460 11,322
Federal Home
Loan Bank 1,748 2,067 5,561 5,856
advances
Other borrowed 16 25 52 73
funds
Total interest 4,420 5,353 14,073 17,251
expense
Net interest 6,944 7,265 20,814 20,584
income
Provision for 101 4 2,334 575
loan losses
Net interest
income after 6,843 7,261 18,480 20,009
provision for
loan losses
Non-interest
income:
Customer 736 826 2,140 2,435
service fees
Portfolio
management 233 272 723 855
fees
Income from
bank owned 90 227 418 469
life insurance
Insurance,
annuities and 25 33 84 147
mutual fund
fees
Gain on sales
of securities, 199 (166 ) 241 306
net
Impairment
losses on (3,652 ) (675 ) (6,663 ) (1,265 )
securities,
net
Gain on sales 156 4 725 121
of loans, net
Miscellaneous 9 11 33 44
Total
non-interest (2,204 ) 532 (2,299 ) 3,112
income
Non-interest
expenses:
Salaries and
employee 3,447 3,739 10,343 10,934
benefits
Occupancy and 931 912 3,001 2,754
equipment
Data 691 615 2,025 1,898
processing
Professional 287 187 765 538
fees
Advertising 367 327 1,072 886
FDIC Deposit 250 36 1,190 79
Insurance
Other general
and 997 1,019 3,302 3,155
administrative
Total
non-interest 6,970 6,835 21,698 20,244
expenses
Income (loss)
before income (2,331 ) 958 (5,517 ) 2,877
taxes
Provision
(benefit) for (633 ) 394 (1,533 ) 981
income taxes
Net income $ (1,698 ) $ 564 $ (3,984 ) $ 1,896
(loss)
Earnings
(loss) per
share
Basic $ (0.21 ) $ 0.07 $ (0.50 ) $ 0.23
Diluted $ (0.21 ) $ 0.07 $ (0.50 ) $ 0.23
Weighted
average shares
outstanding
Basic 7,978,928 7,960,579 7,981,042 8,111,590
Diluted 7,978,928 7,994,020 7,981,042 8,143,461
LEGACY BANCORP, INC. AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL HIGHLIGHTS AND OTHER DATA
(Dollars in thousands except per share data)
Three Months Ended September Nine Months Ended September 30,
30,
2009 2008 2009 2008
Financial
Highlights:
Net interest $ 6,944 $ 7,265 $ 20,814 $ 20,584
income
Net income (1,698) 564 (3,984) 1,896
(loss)
Per share data:
Earnings (loss) (0.21) 0.07 (0.50) 0.23
-- basic
Earnings (loss) (0.21 0.07 (0.50) 0.23
-- diluted
Dividends 0.05 0.05 0.15 0.15
declared
Book value per
share -- end of 14.21 14.26 14.21 14.26
period
Tangible book
value per share 12.78 12.85 12.78 12.85
-- end of period
Ratios and Other
Information:
Return (loss) on (0.72) % 0.24 % (0.56) % 0.28 %
average assets
Return (loss) on (5.39) % 1.76 % (4.21) % 1.92 %
average equity
Net interest 2.83 % 2.95 % 2.80 % 2.74 %
rate spread (1)
Net interest 3.19 % 3.39 % 3.16 % 3.23 %
margin (2)
Efficiency ratio 82.9 % 77.2 % 84.9 % 80.1 %
(3)
Average
interest-earning
assets to
average
interest-bearing 117.28 % 117.73 % 116.75 % 118.19 %
liabilities
At period end:
Stockholders' $ 124,298 $ 125,623
equity
Total assets 953,546 923,497
Equity to total 13.0 % 13.6 %
assets
Non-performing
assets to total 1.76 % 0.68 %
assets
Non-performing
loans to total 2.37 0.90 %
loans
Allowance for
loan losses to 55.98 % 93.07 %
non-performing
loans
Allowance for
loan losses to 1.33 % 0.84 %
total loans
Number of full 19 % 17
service offices
(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 divided by the sum of
net interest income (before the loan loss provision) plus non-interest income
(excluding net gains or losses on the sale or impairment of securities).
Analysis of Net Interest Margin - Third Quarter:
Three Months Ended September Three Months Ended September
30, 2009 30, 2008
Average Yield/ Average Yield/
Outstanding Interest Rate(1) Outstanding Interest Rate(1)
Balance Balance
(Dollars in thousands)
Interest-earning
assets:
Loans - Net (2) $ 665,033 $ 9,642 5.80 % $ 684,825 $ 10,564 6.17 %
Investment 187,881 1,719 3.66 % 166,038 2,030 4.89 %
securities
Short-term 19,020 3 0.06 % 5,112 24 1.88 %
investments
Total
interest-earning 871,934 11,364 5.21 % 855,975 12,618 5.90 %
assets
Non-interest-earning 72,929 68,383
assets
Total assets $ 944,863 $ 924,358
Interest-bearing
liabilities:
Savings deposits $ 50,311 40 0.32 % $ 50,235 54 0.43 %
Relationship savings 123,762 383 1.24 % 124,647 582 1.87 %
Money market 68,342 160 0.94 % 59,428 298 2.01 %
NOW accounts 43,944 40 0.36 % 42,024 53 0.50 %
Certificates of 279,790 2,033 2.91 % 249,441 2,274 3.65 %
deposits
Total
interest-bearing 566,149 2,656 1.88 % 525,775 3,261 2.48 %
deposits
Borrowed funds 177,321 1,764 3.98 % 201,279 2,092 4.16 %
Total
interest-bearing 743,470 4,420 2.38 % 727,054 5,353 2.95 %
liabilities
Non-interest-bearing 75,263 69,037
liabilities
Total liabilities 818,733 796,091
Equity 126,130 128,267
Total liabilities $ 944,863 $ 924,358
and equity
Net interest income $ 6,944 $ 7,265
Net interest rate 2.83 % 2.95 %
spread (3)
Net interest-earning $ 128,464 $ 128,921
assets (4)
Net interest margin 3.19 % 3.39 %
(5)
Average
interest-earning
assets to 117.28 % 117.73 %
interest-bearing
liabilities
(1) Yields and rates for the three months ended September 30, 2009 and 2008 are
annualized.
(2) Includes loans held for sale.
(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 for the three months ended September 30, 2009 and 2008.
(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:
Nine Months Ended September 30, Nine Months Ended September 30,
2009 2008
Average Yield/Rate Average Yield/
Outstanding Interest (1) Outstanding Interest Rate(1)
Balance Balance
(Dollars in thousands)
Interest-earning
assets:
Loans - Net (2) $ 681,577 $ 29,478 5.77 % $ 670,527 $ 31,468 6.26 %
Investment 176,507 5,399 4.08 % 166,390 6,129 4.91 %
securities
Short-term 19,865 10 0.07 % 12,334 238 2.57 %
investments
Total
interest-earning 877,949 34,887 5.30 % 849,251 37,835 5.94 %
assets
Non-interest-earning 73,324 67,202
assets
Total assets $ 951,273 $ 916,453
Interest-bearing
liabilities:
Savings deposits $ 50,741 133 0.35 % $ 50,375 155 0.41 %
Relationship savings 122,703 1,240 1.35 % 122,409 1,993 2.17 %
Money market 66,205 545 1.10 % 59,374 1,109 2.49 %
NOW accounts 43,335 134 0.41 % 41,474 165 0.53 %
Certificates of 280,384 6,408 3.05 % 259,590 7,900 4.06 %
deposits
Total
interest-bearing 563,368 8,460 2.00 % 533,222 11,322 2.83 %
deposits
Borrowed funds 188,650 5,613 3.97 % 185,343 5,929 4.27 %
Total
interest-bearing 752,018 14,073 2.50 % 718,565 17,251 3.20 %
liabilities
Non-interest-bearing 73,344 66,904
liabilities
Total liabilities 825,362 785,469
Equity 125,911 130,984
Total liabilities $ 951,273 $ 916,453
and equity
Net interest income $ 20,814 $ 20,584
Net interest rate 2.80 % 2.74 %
spread (3)
Net interest-earning $ 125,931 $ 130,686
assets (4)
Net interest margin 3.16 % 3.23 %
(5)
Average
interest-earning
assets to 116.75 % 118.19 %
interest-bearing
liabilities
(1) Yields and rates for the nine months ended September 30, 2009 and 2008 are
annualized.
(2) Includes loans held for sale.
(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 for
the nine months ended September 30, 2009 and 2008.
(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 Composition:
At September 30, 2009 At December 31, 2008
Amount Percent Amount Percent
(Dollars in Thousands)
Mortgage loans on real estate:
Residential $ 293,468 44.14 % $ 344,235 49.15 %
Commercial 255,999 38.45 246,374 35.18
Home equity 68,572 10.30 63,138 9.01
618,039 92.89 653,747 93.34
Other loans:
Commercial 35,241 5.29 34,242 4.89
Consumer and other 12,114 1.82 12,386 1.77
47,355 7.11 46,628 6.66
Total loans 665,394 100.00 % 700,375 100.00 %
Other Items:
Net deferred loan costs 1,443 1,531
Allowance for loan losses (8,836 ) (6,642 )
Total Loans, net $ 658,001 $ 695,264
Nonperforming Loans:
At September 30, At December 31,
2009 2008
(Dollars in Thousands)
Non-accrual loans:
Residential mortgage $ 5,052 $ 1,190
Commercial mortgage 9,848 5,777
Commercial 772 410
Home equity, consumer and other 112 172
Total non-accrual loans 15,784 7,549
Loans greater than 90 days delinquent and
still accruing:
Residential mortgage - -
Commercial mortgage - -
Commercial - -
Home equity, consumer and other - -
Total loans 90 days delinquent and still - -
accruing
Total non-performing loans 15,784 7,549
Other real estate owned 990 -
Total non-performing assets $ 16,774 $ 7,549
Troubled debt restructurings $ 4,986 $ -
Ratios:
Non-performing loans to total loans 2.37 % 1.08 %
Non-performing assets to total assets 1.76 % 0.80 %
Securities and Other Investment Portfolio Composition:
At September 30, 2009 At December 31, 2008
Amortized Fair Value Amortized Fair Value
Cost Cost
(Dollars in Thousands)
Securities available for sale:
Government-sponsored enterprises $ 78,811 $ 79,384 $ 36,459 $ 36,832
(GSE)
Municipal bonds 16,773 17,730 15,876 15,632
Corporate bonds and other 1,324 1,347 363 363
obligations
GSE mortgage-backed securities 59,890 61,176 51,679 52,490
Private issue mortgage-backed 15,264 11,527 28,588 21,496
securities
Total debt securities 172,062 171,164 132,965 126,813
Common stock 3,962 4,944 6,314 5,544
Total securities available for sale 176,024 176,108 139,279 132,357
Securities held to maturity:
Other bonds and obligations 97 97 97 97
Restricted equity securities and
other investments:
Federal Home Loan Bank of Boston 10,932 10,932 10,932 10,932
stock
Savings Bank Life Insurance 1,709 1,709 1,709 1,709
Real estate partnerships 4,761 4,761 7,360 7,360
Other investments 182 182 184 184
Total restricted equity securities
and other investments 17,584 17,584 20,185 20,185
Total securities $ 193,705 $ 193,789 $ 159,561 $ 152,639
Deposit Accounts Composition:
At September 30, 2009 At December 31, 2008
Balance Percent Balance Percent
(Dollars in Thousands)
Deposit type:
Demand $ 68,327 10.55 % $ 66,545 10.94 %
Regular savings 49,025 7.57 46,946 7.72
Relationship savings 126,048 19.45 121,376 19.96
Money market deposits 73,972 11.42 60,174 9.89
NOW deposits 45,111 6.96 43,206 7.11
Total transaction accounts 362,483 55.94 338,247 55.62
Term certificates less than $100,000 177,157 27.34 162,739 26.76
Term certificates $100,000 or more 108,320 16.72 107,102 17.62
Total certificate accounts 285,477 44.06 269,841 44.38
Total deposits $ 647,960 100.00 % $ 608,088 100.00 %
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 and to exclude the effects of amortization of intangible assets (in the case of the efficiency ratio). 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 September 30, Nine Months Ended September 30,
2009 2008 2009 2008
Net Income
(loss) $ (1,698 ) $ 564 $ (3,984 ) $ 1,896
(GAAP)
Less:
(Gain) loss
on sale or
impairment 3,453 841 6,422 959
of
securities,
net
Add: FDIC
deposit
insurance - - 425 -
special
assessment
Adjustment:
Income
taxes
related to
non-
recurring
adjustments (975 ) (245 ) (1,939 ) (289 )
noted above
Net Income $ 780 $ 1,160 $ 924 $ 2,566
(Core)
Efficiency
Ratio (As 82.9 % 77.2 % 84.9 % 80.1 %
Reported)
Effect of
gain or
loss on
sale or - - - -
impairment
of
securities,
net
Effect of
FDIC
deposit - (1.7 )
insurance
special
assessment
Efficiency
Ratio 82.9 % 77.2 % 83.2 % 80.1 %
(Core)
Source: Legacy Bancorp, Inc.
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