x
|
Annual
Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
|
¨
|
Transition
Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
|
Maryland
|
74-3242562
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification
Number)
|
95 Elm Street, West
Springfield, Massachusetts
|
01089
|
(Address
of Principal Executive Offices)
|
Zip
Code
|
Common Stock, par
value $0.01 per share
|
NASDAQ
Global Select Market
|
(Title
of Class)
|
Name
of exchange on which
registered
|
Large
accelerated filer ¨
|
Accelerated
filer x
|
Non-accelerated
filer ¨
|
Smaller
reporting company ¨
|
TABLE
OF CONTENTS
|
ITEM
|
PAGE
|
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3
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37
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42
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43
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44
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44
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45
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48
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50
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67
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68
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69
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69
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71
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71
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71
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71
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71
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71
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At
December 31,
|
||||||||||||||||||||||||||||||||||||||||
2008
|
2007
|
2006
|
2005
|
2004
|
||||||||||||||||||||||||||||||||||||
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
|||||||||||||||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||||||||||||||||||
Types
of loans:
|
||||||||||||||||||||||||||||||||||||||||
Real
estate loans:
|
||||||||||||||||||||||||||||||||||||||||
One-
to four-family
|
$ | 356,428 | 40.95 | % | $ | 339,470 | 41.16 | % | $ | 319,108 | 41.87 | % | $ | 285,236 | 44.86 | % | $ | 256,134 | 44.62 | % | ||||||||||||||||||||
Commercial
|
248,457 | 28.55 | % | 214,776 | 26.04 | % | 175,564 | 23.04 | % | 150,099 | 23.61 | % | 137,787 | 24.00 | % | |||||||||||||||||||||||||
Construction
(1)
|
32,082 | 3.69 | % | 42,059 | 5.10 | % | 54,759 | 7.19 | % | 28,872 | 4.54 | % | 29,836 | 5.20 | % | |||||||||||||||||||||||||
Home
equity
|
120,724 | 13.87 | % | 116,241 | 14.10 | % | 112,739 | 14.79 | % | 86,045 | 13.53 | % | 74,700 | 13.01 | % | |||||||||||||||||||||||||
Commercial
and industrial
|
84,919 | 9.76 | % | 81,562 | 9.89 | % | 69,762 | 9.15 | % | 59,591 | 9.37 | % | 56,291 | 9.81 | % | |||||||||||||||||||||||||
Automobile
|
17,332 | 1.99 | % | 22,461 | 2.72 | % | 24,456 | 3.21 | % | 22,054 | 3.47 | % | 17,460 | 3.04 | % | |||||||||||||||||||||||||
Consumer
|
10,334 | 1.19 | % | 8,126 | 0.99 | % | 5,725 | 0.75 | % | 3,895 | 0.61 | % | 1,862 | 0.32 | % | |||||||||||||||||||||||||
Total
loans
|
$ | 870,276 | 100.00 | % | $ | 824,695 | 100.00 | % | $ | 762,113 | 100.00 | % | $ | 635,792 | 100.00 | % | $ | 574,070 | 100.00 | % | ||||||||||||||||||||
Other
items:
|
||||||||||||||||||||||||||||||||||||||||
Net
deferred loan costs and fees
|
2,395 | 2,136 | 1,285 | 1,148 | 923 | |||||||||||||||||||||||||||||||||||
Allowance
for loan losses
|
(8,250 | ) | (7,714 | ) | (7,218 | ) | (6,382 | ) | (5,750 | ) | ||||||||||||||||||||||||||||||
Total
loans, net
|
$ | 864,421 | $ | 819,117 | $ | 756,180 | $ | 630,558 | $ | 569,243 | ||||||||||||||||||||||||||||||
(1) Includes $30,161,
$33,603, $41,256, $17,506 and $17,029 of commercial construction loans at
December 31, 2008, 2007, 2006, 2005 and 2004,
respectively.
|
||||||||||||||||||||||||||||||||||||||||
Commercial
|
Commercial
|
|||||||||||||||||||||||||||||||||||||||
Residential
|
Real
Estate
|
Construction
|
Home
Equity
|
and
Industrial
|
Automobile
|
Other
Consumer
|
Total
|
|||||||||||||||||||||||||||||||||
Weighted
|
Weighted
|
Weighted
|
Weighted
|
Weighted
|
Weighted
|
Weighted
|
Weighted
|
|||||||||||||||||||||||||||||||||
Average
|
Average
|
Average
|
Average
|
Average
|
Average
|
Average
|
Average
|
|||||||||||||||||||||||||||||||||
Amount
|
Rate
|
Amount
|
Rate
|
Amount
|
Rate
|
Amount
|
Rate
|
Amount
|
Rate
|
Amount
|
Rate
|
Amount
|
Rate
|
Amount
|
Rate
|
|||||||||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||||||||||||||||||
Due
during the years ending
|
||||||||||||||||||||||||||||||||||||||||
after
December 31, 2008:
|
||||||||||||||||||||||||||||||||||||||||
One
year or less
|
$ | 11,948 |
5.49%
|
$ | 10,380 |
5.99%
|
$ | 26,940 |
4.46%
|
$ | 10,468 |
5.77%
|
$ | 41,477 |
4.46%
|
$ | 6,623 |
5.19%
|
$ | 1,158 |
8.82%
|
$ | 108,994 |
4.94%
|
||||||||||||||||
More
than one to three years
|
26,198 |
5.49%
|
21,840 |
6.03%
|
1,200 |
3.33%
|
17,334 |
5.91%
|
18,830 |
6.35%
|
8,747 |
5.40%
|
1,263 |
6.48%
|
95,412 |
5.84%
|
||||||||||||||||||||||||
More
than three to five years
|
27,921 |
5.48%
|
23,148 |
6.06%
|
1,814 |
7.00%
|
13,301 |
6.10%
|
9,947 |
6.47%
|
1,962 |
5.53%
|
894 |
7.38%
|
78,987 |
5.94%
|
||||||||||||||||||||||||
More
than five to ten years
|
69,493 |
5.49%
|
59,605 |
6.14%
|
- |
0.00%
|
21,758 |
6.47%
|
5,742 |
6.80%
|
- |
0.00%
|
2,292 |
8.05%
|
158,890 |
5.95%
|
||||||||||||||||||||||||
More
than ten to fifteen years
|
55,676 |
5.65%
|
60,831 |
6.24%
|
- |
0.00%
|
16,616 |
5.75%
|
681 |
7.27%
|
- |
0.00%
|
2,863 |
8.00%
|
136,667 |
5.98%
|
||||||||||||||||||||||||
More
than fifteen years
|
165,192 |
5.73%
|
72,653 |
6.27%
|
2,128 |
5.94%
|
41,247 |
4.29%
|
8,242 |
5.97%
|
- |
0.00%
|
1,864 |
7.86%
|
291,326 |
5.68%
|
||||||||||||||||||||||||
Total
|
$ | 356,428 |
5.63%
|
$ | 248,457 |
6.18%
|
$ | 32,082 |
4.66%
|
$ | 120,724 |
5.44%
|
$ | 84,919 |
5.44%
|
$ | 17,332 |
5.33%
|
$ | 10,334 |
7.84%
|
$ | 870,276 |
5.73%
|
||||||||||||||||
Due
After December 31, 2009
|
||||||||||||
Fixed
|
Adjustable
|
Total
|
||||||||||
(In
thousands)
|
||||||||||||
Residential
real estate
|
$ | 307,455 | $ | 37,025 | $ | 344,480 | ||||||
Commercial
real estate
|
108,593 | 129,484 | 238,077 | |||||||||
Construction
|
3,819 | 1,323 | 5,142 | |||||||||
Home
equity
|
64,277 | 45,979 | 110,256 | |||||||||
Commercial
and industrial
|
32,079 | 11,363 | 43,442 | |||||||||
Automobile
|
10,709 | - | 10,709 | |||||||||
Consumer
|
9,176 | - | 9,176 | |||||||||
Total
loans
|
$ | 536,108 | $ | 225,174 | $ | 761,282 |
Years
Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
(In
thousands)
|
||||||||||||
Total
loans at beginning of period
|
$ | 824,695 | $ | 762,113 | $ | 635,792 | ||||||
Loan
originations:
|
||||||||||||
Residential
mortgages
|
46,946 | 46,191 | 59,576 | |||||||||
Commercial
mortgages
|
57,095 | 45,449 | 51,141 | |||||||||
Construction
(1)
|
28,798 | 50,089 | 59,719 | |||||||||
Home
equity
|
58,928 | 58,634 | 83,041 | |||||||||
Commercial
and industrial
|
97,274 | 87,869 | 85,105 | |||||||||
Automobile
|
5,367 | 9,364 | 13,702 | |||||||||
Other
consumer
|
5,368 | 6,106 | 4,712 | |||||||||
Total
loans originated
|
299,778 | 303,702 | 356,996 | |||||||||
Loans
purchased
|
15,024 | - | - | |||||||||
Sales
and loan principal repayment
|
||||||||||||
deductions:
|
||||||||||||
Principal
repayments
|
264,610 | 239,063 | 232,266 | |||||||||
Loan
sales
|
- | 2,046 | 190 | |||||||||
Decrease
(increase) due to other items
|
4,399 | 11 | (1,781 | ) | ||||||||
Total
deductions
|
269,009 | 241,120 | 230,675 | |||||||||
Net
loan activity
|
45,793 | 62,582 | 126,321 | |||||||||
Total
loans at end of period
|
$ | 870,488 | $ | 824,695 | $ | 762,113 | ||||||
__________________________________ | ||||||||||||
(1) Includes
$25,799, $41,708 and $46,904 of commercial construction loans for the
years ended December 31, 2008,
|
||||||||||||
2007
and 2006, respectively.
|
||||||||||||
At
December 31,
|
||||||||||||||||||||
2008
|
2007
|
2006
|
2005
|
2004
|
||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||
Non-accrual
loans:
|
||||||||||||||||||||
Residential
mortgages
|
$ | 1,244 | $ | 328 | $ | - | $ | 1,016 | $ | 1,383 | ||||||||||
Commercial
mortgages
|
2,544 | 553 | 1,144 | 141 | 1,376 | |||||||||||||||
Construction
|
444 | 577 | - | 113 | - | |||||||||||||||
Home
equity
|
- | 52 | 20 | - | - | |||||||||||||||
Commercial
and industrial
|
425 | 275 | 123 | 447 | 1,025 | |||||||||||||||
Automobile
|
- | - | - | - | - | |||||||||||||||
Other
consumer
|
140 | - | 1 | - | - | |||||||||||||||
Total
non-accrual loans
|
4,797 | 1,785 | 1,288 | 1,717 | 3,784 | |||||||||||||||
Accruing
loans 90 days or more past due
|
- | - | - | - | - | |||||||||||||||
Total
non-performing loans
|
4,797 | 1,785 | 1,288 | 1,717 | 3,784 | |||||||||||||||
Other
real estate owned
|
998 | 880 | 562 | 1,602 | - | |||||||||||||||
Total
non-performing assets
|
$ | 5,795 | $ | 2,665 | $ | 1,850 | $ | 3,319 | $ | 3,784 | ||||||||||
Ratios:
|
||||||||||||||||||||
Total
non-performing loans to total loans
|
0.55 | % | 0.22 | % | 0.17 | % | 0.27 | % | 0.66 | % | ||||||||||
Total
non-performing assets to total assets
|
0.46 | % | 0.25 | % | 0.18 | % | 0.37 | % | 0.49 | % | ||||||||||
Allowance
for loan losses to non-performing loans
|
171.98 | % | 432.16 | % | 560.40 | % | 371.69 | % | 151.96 | % |
Loans
Delinquent For
|
||||||||||||||||||||||||
60
- 89 Days
|
90
Days and Over
|
Total
|
||||||||||||||||||||||
Number
|
Amount
|
Number
|
Amount
|
Number
|
Amount
|
|||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||
At December 31,
2008
|
||||||||||||||||||||||||
Residential
mortgages
|
7 | $ | 939 | 7 | $ | 1,244 | 14 | $ | 2,183 | |||||||||||||||
Commercial
mortgage
|
3 | 772 | 8 | 2,544 | 11 | 3,316 | ||||||||||||||||||
Construction
|
1 | 140 | 3 | 444 | 4 | 584 | ||||||||||||||||||
Home
equity
|
2 | 126 | - | - | 2 | 126 | ||||||||||||||||||
Commercial
and industrial
|
5 | 242 | 15 | 425 | 20 | 667 | ||||||||||||||||||
Automobile
|
1 | 8 | - | - | 1 | 8 | ||||||||||||||||||
Other
consumer
|
1 | 2 | 2 | 140 | 3 | 142 | ||||||||||||||||||
Total
|
20 | $ | 2,229 | 35 | $ | 4,797 | 55 | $ | 7,026 | |||||||||||||||
At December 31,
2007
|
||||||||||||||||||||||||
Residential
mortgages
|
1 | $ | 558 | 4 | $ | 328 | 5 | $ | 886 | |||||||||||||||
Commercial
mortgages
|
3 | 671 | 5 | 553 | 8 | 1,224 | ||||||||||||||||||
Construction
|
- | - | 5 | 577 | 5 | 577 | ||||||||||||||||||
Home
equity
|
2 | 200 | 2 | 52 | 4 | 252 | ||||||||||||||||||
Commercial
and industrial
|
7 | 454 | 8 | 275 | 15 | 729 | ||||||||||||||||||
Automobile
|
- | - | - | - | - | - | ||||||||||||||||||
Other
consumer
|
2 | 50 | - | - | 2 | 50 | ||||||||||||||||||
Total
|
15 | $ | 1,933 | 24 | $ | 1,785 | 39 | $ | 3,718 | |||||||||||||||
At December 31,
2006
|
||||||||||||||||||||||||
Residential
mortgages
|
3 | $ | 203 | - | $ | - | 3 | $ | 203 | |||||||||||||||
Commercial
mortgages
|
1 | 149 | 7 | 1,144 | 8 | 1,293 | ||||||||||||||||||
Construction
|
- | - | - | - | - | - | ||||||||||||||||||
Home
equity
|
- | - | 1 | 20 | 1 | 20 | ||||||||||||||||||
Commercial
and industrial
|
2 | 47 | 4 | 123 | 6 | 170 | ||||||||||||||||||
Automobile
|
2 | 1 | - | - | 2 | 1 | ||||||||||||||||||
Other
consumer
|
- | - | 1 | 1 | 1 | 1 | ||||||||||||||||||
Total
|
8 | $ | 400 | 13 | $ | 1,288 | 21 | $ | 1,688 | |||||||||||||||
At December 31,
2005
|
||||||||||||||||||||||||
Residential
mortgages
|
8 | $ | 755 | 5 | $ | 998 | 13 | $ | 1,753 | |||||||||||||||
Commercial
mortgages
|
4 | 546 | 2 | 141 | 6 | 687 | ||||||||||||||||||
Construction
|
- | - | 1 | 113 | 1 | 113 | ||||||||||||||||||
Home
equity
|
1 | 100 | 1 | 18 | 2 | 118 | ||||||||||||||||||
Commercial
and industrial
|
1 | 2 | 6 | 447 | 7 | 449 | ||||||||||||||||||
Automobile
|
1 | 1 | - | - | 1 | 1 | ||||||||||||||||||
Other
consumer
|
- | - | - | - | - | - | ||||||||||||||||||
Total
|
15 | $ | 1,404 | 15 | $ | 1,717 | 30 | $ | 3,121 | |||||||||||||||
At December 31,
2004
|
||||||||||||||||||||||||
Residential
mortgages
|
1 | $ | 48 | 7 | $ | 1,383 | 8 | $ | 1,431 | |||||||||||||||
Commercial
mortgages
|
1 | 114 | 7 | 1,376 | 8 | 1,490 | ||||||||||||||||||
Construction
|
- | - | - | - | - | - | ||||||||||||||||||
Home
equity
|
1 | 5 | - | - | 1 | 5 | ||||||||||||||||||
Commercial
and industrial
|
9 | 330 | 10 | 1,025 | 19 | 1,355 | ||||||||||||||||||
Automobile
|
3 | 13 | - | - | 3 | 13 | ||||||||||||||||||
Other
consumer
|
- | - | - | - | - | - | ||||||||||||||||||
Total
|
15 | $ | 510 | 24 | $ | 3,784 | 39 | $ | 4,294 | |||||||||||||||
At
December 31,
|
At
December 31,
|
|||||||
2008
|
2007
|
|||||||
(In
thousands)
|
||||||||
Residential Real Estate
(1):
|
||||||||
Special
mention
|
$ | 379 | $ | - | ||||
Substandard
|
1,552 | (2) | 1,278 | |||||
All Other Loans (3):
|
||||||||
Special
mention
|
17,984 | 13,800 | ||||||
Substandard
|
22,975 | 19,377 | ||||||
Doubtful
|
894 | 244 | ||||||
Loss
|
- | - | ||||||
Foreclosed
Assets:
|
||||||||
Other
real estate owned
|
998 | 880 | ||||||
Total
classified assets
|
$ | 44,782 | $ | 35,579 | ||||
_________________________________________ | ||||||||
(1) Includes
one- to-four family loans and home equity loans and lines of
credit.
|
||||||||
(2) Includes
eight residential relationships, four of which are in foreclosure or
liquidation proceedings.
|
||||||||
(3) Includes
$10.3 million of construction loans for one- to-four family or condominium
contruction.
|
At
or For the Year Ended December 31,
|
||||||||||||||||||||
2008
|
2007
|
2006
|
2005
|
2004
|
||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||
Balance
at beginning of period
|
$ | 7,714 | $ | 7,218 | $ | 6,382 | $ | 5,750 | $ | 5,094 | ||||||||||
Charge-offs:
|
||||||||||||||||||||
Residential
mortgages
|
- | - | - | - | - | |||||||||||||||
Commercial
mortgages
|
6 | 39 | - | 60 | - | |||||||||||||||
Construction
|
444 | 326 | - | - | - | |||||||||||||||
Home
equity
|
42 | - | 10 | - | - | |||||||||||||||
Commercial
and industrial
|
827 | 593 | 164 | 377 | 501 | |||||||||||||||
Automobile
|
8 | 21 | 1 | 15 | 46 | |||||||||||||||
Other
consumer
|
9 | 4 | 11 | 3 | 11 | |||||||||||||||
Total
charge-offs
|
1,336 | 983 | 186 | 455 | 558 | |||||||||||||||
Recoveries:
|
||||||||||||||||||||
Residential
mortgages
|
- | - | - | - | - | |||||||||||||||
Commercial
mortgages
|
- | - | 1 | - | 175 | |||||||||||||||
Construction
|
- | - | - | - | - | |||||||||||||||
Home
equity
|
5 | 4 | - | - | 1 | |||||||||||||||
Commercial
and industrial
|
17 | 47 | 47 | 157 | 32 | |||||||||||||||
Automobile
|
3 | 1 | 2 | 6 | 21 | |||||||||||||||
Other
consumer
|
1 | 2 | 3 | 7 | 2 | |||||||||||||||
Total
recoveries
|
26 | 54 | 53 | 170 | 231 | |||||||||||||||
Net
charge-offs
|
(1,310 | ) | (929 | ) | (133 | ) | (285 | ) | (327 | ) | ||||||||||
Provision
for loan losses
|
1,846 | 1,425 | 969 | 917 | 983 | |||||||||||||||
Balance
at end of period
|
$ | 8,250 | $ | 7,714 | $ | 7,218 | $ | 6,382 | $ | 5,750 | ||||||||||
Ratios:
|
||||||||||||||||||||
Net
charge-offs to average loans
|
||||||||||||||||||||
outstanding
|
0.15 | % | 0.12 | % | 0.02 | % | 0.05 | % | 0.06 | % | ||||||||||
Allowance
for loan losses to non-
|
||||||||||||||||||||
performing
loans at end of period
|
171.98 | % | 432.16 | % | 560.40 | % | 371.69 | % | 151.96 | % | ||||||||||
Allowance
for loan losses to total
|
||||||||||||||||||||
loans
at end of period
|
0.95 | % | 0.94 | % | 0.95 | % | 1.00 | % | 1.00 | % | ||||||||||
At
December 31,
|
||||||||||||||||||||||||||||||||||||
2008
|
2007
|
2006
|
||||||||||||||||||||||||||||||||||
Percent
of
|
Percent
of
|
Percent
of
|
Percent
of
|
Percent
of
|
Percent
of
|
|||||||||||||||||||||||||||||||
Allowance
|
Loans
in
|
Allowance
|
Loans
in
|
Allowance
|
Loans
in
|
|||||||||||||||||||||||||||||||
to
Total
|
Category
to
|
to
Total
|
Category
to
|
to
Total
|
Category
to
|
|||||||||||||||||||||||||||||||
Amount
|
Allowance
|
Total
Loans
|
Amount
|
Allowance
|
Total
Loans
|
Amount
|
Allowance
|
Total
Loans
|
||||||||||||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||||||||||||||
At
end of period allocated to:
|
||||||||||||||||||||||||||||||||||||
Residential
mortgages
|
$ | 891 | 10.80 | % | 40.95 | % | $ | 849 | 11.00 | % | 41.16 | % | $ | 957 | 13.26 | % | 41.87 | % | ||||||||||||||||||
Commercial
mortgages
|
3,506 | 42.50 | % | 28.55 | % | 3,164 | 41.02 | % | 26.04 | % | 2,588 | 35.86 | % | 23.04 | % | |||||||||||||||||||||
Construction
|
1,089 | 13.20 | % | 3.69 | % | 1,229 | 15.93 | % | 5.10 | % | 1,255 | 17.39 | % | 7.19 | % | |||||||||||||||||||||
Home
equity
|
604 | 7.32 | % | 13.87 | % | 523 | 6.78 | % | 14.10 | % | 512 | 7.09 | % | 14.79 | % | |||||||||||||||||||||
Commercial
and industrial
|
1,911 | 23.16 | % | 9.76 | % | 1,667 | 21.61 | % | 9.89 | % | 1,633 | 22.62 | % | 9.15 | % | |||||||||||||||||||||
Automobile
|
156 | 1.89 | % | 1.99 | % | 202 | 2.62 | % | 2.72 | % | 220 | 3.05 | % | 3.21 | % | |||||||||||||||||||||
Other
consumer
|
93 | 1.13 | % | 1.19 | % | 80 | 1.04 | % | 0.99 | % | 53 | 0.73 | % | 0.75 | % | |||||||||||||||||||||
Total
allowance
|
$ | 8,250 | 100.00 | % | 100.00 | % | $ | 7,714 | 100.00 | % | 100.00 | % | $ | 7,218 | 100.00 | % | 100.00 | % | ||||||||||||||||||
At
December 31,
|
||||||||||||||||||||||||
2005
|
2004
|
|||||||||||||||||||||||
Percent
of
|
Percent
of
|
Percent
of
|
Percent
of
|
|||||||||||||||||||||
Allowance
|
Loans
in
|
Allowance
|
Loans
in
|
|||||||||||||||||||||
to
Total
|
Category
to
|
to
Total
|
Category
to
|
|||||||||||||||||||||
Amount
|
Allowance
|
Total
Loans
|
Amount
|
Allowance
|
Total
Loans
|
|||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||
At
end of period allocated to:
|
||||||||||||||||||||||||
Residential
mortgages
|
$ | 297 | 4.65 | % | 44.86 | % | $ | 302 | 5.25 | % | 44.62 | % | ||||||||||||
Commercial
mortgages
|
2,944 | 46.13 | % | 23.61 | % | 3,217 | 55.95 | % | 24.00 | % | ||||||||||||||
Construction
|
316 | 4.95 | % | 4.54 | % | 259 | 4.50 | % | 5.20 | % | ||||||||||||||
Home
equity
|
257 | 4.03 | % | 13.53 | % | 224 | 3.90 | % | 13.01 | % | ||||||||||||||
Commercial
and industrial
|
2,487 | 38.97 | % | 9.37 | % | 1,682 | 29.25 | % | 9.81 | % | ||||||||||||||
Automobile
|
78 | 1.22 | % | 3.47 | % | 60 | 1.04 | % | 3.04 | % | ||||||||||||||
Other
consumer
|
3 | 0.05 | % | 0.61 | % | 6 | 0.11 | % | 0.32 | % | ||||||||||||||
Total
allowance
|
$ | 6,382 | 100.00 | % | 100.00 | % | $ | 5,750 | 100.00 | % | 100.00 | % |
At
December 31,
|
||||||||||||||||||||||||
2008
|
2007
|
2006
|
||||||||||||||||||||||
Amortized
|
Amortized
|
Amortized
|
||||||||||||||||||||||
Cost
|
Fair
Value
|
Cost
|
Fair
Value
|
Cost
|
Fair
Value
|
|||||||||||||||||||
(In
thousands)
|
||||||||||||||||||||||||
Investment
securities available-for-sale:
|
||||||||||||||||||||||||
Government-sponsored
enterprises
|
$ | 467 | $ | 465 | $ | 45,447 | $ | 45,474 | $ | 78,248 | $ | 77,369 | ||||||||||||
Mortgage-backed
securities
|
294,824 | 301,111 | 146,764 | 147,581 | 111,481 | 109,274 | ||||||||||||||||||
Corporate
debt obligations
|
1,538 | 1,538 | 2,820 | 2,778 | 3,415 | 3,309 | ||||||||||||||||||
Municipal
bonds
|
10,504 | 10,392 | 5,295 | 5,284 | - | - | ||||||||||||||||||
Equity
securities
|
- | - | 140 | 140 | 293 | 285 | ||||||||||||||||||
Total
available-for-sale
|
$ | 307,333 | $ | 313,506 | $ | 200,466 | $ | 201,257 | $ | 193,437 | $ | 190,237 | ||||||||||||
Investment
securities held-to-maturity:
|
||||||||||||||||||||||||
IRB
|
$ | 1,122 | $ | 1,122 | $ | 1,197 | $ | 1,197 | $ | 1,271 | $ | 1,271 | ||||||||||||
Municipal
bonds
|
2,069 | 2,116 | 2,435 | 2,434 | 1,970 | 1,956 | ||||||||||||||||||
Total
held-to-maturity
|
$ | 3,191 | $ | 3,238 | $ | 3,632 | $ | 3,631 | $ | 3,241 | $ | 3,227 | ||||||||||||
More
than One Year
|
More
than Five Years
|
||||||||||||||||||||||||||||
One
Year or Less
|
through
Five Years
|
through
Ten Years
|
More
than Ten Years
|
Total
Securities
|
|||||||||||||||||||||||||
Weighted
|
Weighted
|
Weighted
|
Weighted
|
Weighted
|
|||||||||||||||||||||||||
Amortized
|
Average
|
Amortized
|
Average
|
Amortized
|
Average
|
Amortized
|
Average
|
Amortized
|
Average
|
||||||||||||||||||||
Cost
|
Yield
|
Cost
|
Yield
|
Cost
|
Yield
|
Cost
|
Yield
|
Cost
|
Yield
|
Fair
Value
|
|||||||||||||||||||
(Dollars
in thousands)
|
|||||||||||||||||||||||||||||
Investment
securities available-for-sale:
|
|||||||||||||||||||||||||||||
Government-sponsored
enterprises
|
$ | - |
0.00%
|
$ | 467 |
4.64%
|
$ | - |
0.00%
|
$ | - |
0.00%
|
$ | 467 |
4.64%
|
$ | 465 | ||||||||||||
Mortgage-backed
securities
|
- |
0.00%
|
12,190 |
3.55%
|
16,146 |
4.74%
|
266,488 |
5.31%
|
294,824 |
5.21%
|
301,111 | ||||||||||||||||||
Corporate
debt obligations
|
- |
0.00%
|
- |
0.00%
|
- |
0.00%
|
1,538 |
7.76%
|
1,538 |
7.76%
|
1,538 | ||||||||||||||||||
Municipal
bonds
|
- |
0.00%
|
- |
0.00%
|
1,327 |
3.72%
|
9,177 |
4.20%
|
10,504 |
4.14%
|
10,392 | ||||||||||||||||||
Total
available-for-sale
|
$ | - |
0.00%
|
$ | 12,657 |
3.59%
|
$ | 17,473 |
4.66%
|
$ | 277,203 |
5.29%
|
$ | 307,333 |
5.18%
|
$ | 313,506 | ||||||||||||
Investment
securities held-to-maturity:
|
|||||||||||||||||||||||||||||
IRB
|
$ | 372 |
5.00%
|
$ | - |
0.00%
|
$ | - |
0.00%
|
$ | 750 |
4.00%
|
$ | 1,122 |
4.33%
|
$ | 1,122 | ||||||||||||
Municipal
bonds
|
- |
0.00%
|
918 |
3.23%
|
764 |
3.81%
|
387 |
3.90%
|
2,069 |
3.57%
|
2,116 | ||||||||||||||||||
Total
held-to-maturity
|
$ | 372 |
5.00%
|
$ | 918 |
3.23%
|
$ | 764 |
3.81%
|
$ | 1,137 |
3.97%
|
$ | 3,191 |
3.84%
|
$ | 3,238 | ||||||||||||
At
December 31,
|
||||||||||||||||||||||||||||||||||||
2008
|
2007
|
2006
|
||||||||||||||||||||||||||||||||||
Weighted
|
Weighted
|
Weighted
|
||||||||||||||||||||||||||||||||||
Average
|
Average
|
Average
|
||||||||||||||||||||||||||||||||||
Balance
|
Percent
|
Rate
|
Balance
|
Percent
|
Rate
|
Balance
|
Percent
|
Rate
|
||||||||||||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||||||||||||||
Deposit
type:
|
||||||||||||||||||||||||||||||||||||
Demand
|
$ | 114,178 | 14.59 | % | - | % | $ | 102,010 | 14.20 | % | - | % | $ | 97,190 | 14.17 | % | - | % | ||||||||||||||||||
NOW
|
32,390 | 4.14 | % | 0.50 | % | 35,207 | 4.90 | % | 0.51 | % | 37,523 | 5.47 | % | 0.57 | % | |||||||||||||||||||||
Regular
savings
|
99,492 | 12.71 | % | 1.04 | % | 65,711 | 9.14 | % | 1.15 | % | 65,475 | 9.55 | % | 0.83 | % | |||||||||||||||||||||
Money
market
|
160,736 | 20.54 | % | 1.69 | % | 168,107 | 23.39 | % | 2.94 | % | 165,984 | 24.21 | % | 3.18 | % | |||||||||||||||||||||
Certificates
of deposit
|
375,867 | 48.02 | % | 3.34 | % | 347,647 | 48.37 | % | 4.58 | % | 319,514 | 46.60 | % | 4.52 | % | |||||||||||||||||||||
Total
deposits
|
$ | 782,663 | 100.00 | % | 2.10 | % | $ | 718,682 | 100.00 | % | 3.03 | % | $ | 685,686 | 100.00 | % | 2.99 | % | ||||||||||||||||||
At
December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
(In
thousands)
|
||||||||||||
Interest
Rate
|
||||||||||||
Less
than 2.00%
|
$ | 10,119 | $ | 3 | $ | 2,788 | ||||||
2.00-2.99%
|
94,010 | 9,280 | 35,404 | |||||||||
3.00-3.99%
|
215,796 | 37,040 | 21,682 | |||||||||
4.00-4.99%
|
54,329 | 247,487 | 161,688 | |||||||||
5.00-5.99%
|
1,613 | 53,837 | 97,952 | |||||||||
Total
time deposits
|
$ | 375,867 | $ | 347,647 | $ | 319,514 |
Over
one
|
Over
two
|
|||||||||||||||||||
Less
than
|
year
to two
|
years
to
|
Over
three
|
|||||||||||||||||
one
year
|
years
|
three
years
|
years
|
Total
|
||||||||||||||||
(In
thousands)
|
||||||||||||||||||||
Interest
Rate
|
||||||||||||||||||||
Less
than 2.00%
|
$ | 9,172 | $ | 947 | $ | - | $ | - | $ | 10,119 | ||||||||||
2.00-2.99%
|
88,826 | 5,184 | - | - | 94,010 | |||||||||||||||
3.00-3.99%
|
158,906 | 20,998 | 33,516 | 2,376 | 215,796 | |||||||||||||||
4.00-4.99%
|
23,958 | 12,744 | 2,451 | 15,176 | 54,329 | |||||||||||||||
5.00-5.99%
|
206 | 1,300 | - | 107 | 1,613 | |||||||||||||||
Total
|
$ | 281,068 | $ | 41,173 | $ | 35,967 | $ | 17,659 | $ | 375,867 |
For
the Years Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
(In
thousands)
|
||||||||||||
Beginning
balance
|
$ | 616,672 | $ | 588,496 | $ | 560,310 | ||||||
Net
deposits before interest
|
||||||||||||
credited
|
33,978 | 6,124 | 9,563 | |||||||||
Interest
credited
|
17,835 | 22,052 | 18,623 | |||||||||
Net
increase in deposits
|
51,813 | 28,176 | 28,186 | |||||||||
Ending
balance
|
$ | 668,485 | $ | 616,672 | $ | 588,496 |
Three
months or less
|
$ | 55,336 | ||
Over
three months through six months
|
26,088 | |||
Over
six months through one year
|
33,713 | |||
Over
one year to three years
|
28,057 | |||
Over
three years
|
7,162 | |||
Total
|
$ | 150,356 |
For
the Years Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
(In
thousands)
|
||||||||||||
Balance
at end of period
|
$ | 208,564 | $ | 107,997 | $ | 169,806 | ||||||
Average
amount outstanding during year
|
178,699 | 158,595 | 127,397 | |||||||||
Interest
expense incurred during year
|
6,739 | 7,617 | 5,621 | |||||||||
Maximum
amount outstanding at any month-end
|
228,214 | 187,941 | 169,806 | |||||||||
Average
interest rate during the year
|
3.77 | % | 4.80 | % | 4.41 | % | ||||||
Weighted
average interest rate on end of period balances
|
3.32 | % | 4.55 | % | 4.73 | % |
For
the Years Ended December 31,
|
||||||||||||||||||||||||
2008
|
2007
|
2006
|
||||||||||||||||||||||
Weighted
|
Weighted
|
Weighted
|
||||||||||||||||||||||
Amount
|
Average
Rate
|
Amount
|
Average
Rate
|
Amount
|
Average
Rate
|
|||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||
Within
1 year
|
$ | 55,000 | 1.26 | % | $ | 17,152 | 5.00 | % | $ | 65,000 | 5.16 | % | ||||||||||||
Over
1 year to 2 years
|
22,279 | 4.35 | % | 13,000 | 5.13 | % | 16,411 | 5.06 | % | |||||||||||||||
Over
2 years to 3 years
|
52,321 | 4.03 | % | 26,767 | 4.15 | % | 13,000 | 5.13 | % | |||||||||||||||
Over
3 years to 4 years
|
8,033 | 4.34 | % | 23,267 | 4.60 | % | 16,111 | 3.20 | % | |||||||||||||||
Over
4 years to 5 years
|
41,894 | 4.02 | % | 9,968 | 4.34 | % | 39,184 | 4.60 | % | |||||||||||||||
Over
5 years
|
29,037 | 3.84 | % | 17,843 | 4.36 | % | 20,100 | 4.32 | % | |||||||||||||||
$ | 208,564 | 3.32 | % | $ | 107,997 | 4.55 | % | $ | 169,806 | 4.73 | % |
For
the Years Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
(In
thousands)
|
||||||||||||
Balance
at end of period
|
$ | 18,042 | $ | 13,864 | $ | 10,425 | ||||||
Average
amount outstanding during year
|
8,534 | 7,788 | 5,546 | |||||||||
Interest
expense incurred during year
|
158 | 259 | 167 | |||||||||
Maximum
amount outstanding at any month-end
|
18,042 | 13,864 | 10,425 | |||||||||
Average
interest rate during the year
|
1.85 | % | 3.33 | % | 3.01 | % | ||||||
Weighted
average interest rate on end of period balances
|
1.60 | % | 3.12 | % | 3.38 | % |
|
·
|
the
association would be undercapitalized following the
distribution;
|
|
·
|
the
proposed capital distribution raises safety and soundness concerns;
or
|
|
·
|
the
capital distribution would violate a prohibition contained in any statute,
regulation or agreement.
|
|
·
|
well-capitalized
(at least 5% leverage capital, 6% Tier 1 risk-based capital and 10% total
risk-based capital);
|
|
·
|
adequately
capitalized (at least 4% leverage capital, 4% Tier 1 risk-based capital
and 8% total risk-based capital);
|
|
·
|
undercapitalized
(less than 3% leverage capital, 4% Tier 1 risk-based capital or 8% total
risk-based capital);
|
|
·
|
significantly
undercapitalized (less than 3% leverage capital, 3% Tier 1 risk-based
capital or 6% total risk-based capital);
and
|
|
·
|
critically
undercapitalized (less than 2% tangible
capital).
|
|
·
|
Truth-In-Lending
Act, governing disclosures of credit terms to consumer
borrowers;
|
|
·
|
Home
Mortgage Disclosure Act, requiring financial institutions to provide
information to enable the public and public officials to determine whether
a financial institution is fulfilling its obligation to help meet the
housing needs of the community it
serves;
|
|
·
|
Equal
Credit Opportunity Act, prohibiting discrimination on the basis of race,
creed or other prohibited factors in extending
credit;
|
|
·
|
Fair
Credit Reporting Act, governing the use and provision of information to
credit reporting agencies;
|
|
·
|
Fair
Debt Collection Act, governing the manner in which consumer debts may be
collected by collection agencies;
|
|
·
|
Truth
in Savings Act; and
|
|
·
|
rules
and regulations of the various federal agencies charged with the
responsibility of implementing such federal
laws.
|
|
·
|
Right
to Financial Privacy Act, which imposes a duty to maintain confidentiality
of consumer financial records and prescribes procedures for complying with
administrative subpoenas of financial
records;
|
|
·
|
Electronic
Funds Transfer Act and Regulation E promulgated thereunder, which govern
automatic deposits to and withdrawals from deposit accounts and customers’
rights and liabilities arising from the use of automated teller machines
and other electronic banking
services;
|
|
·
|
Check
Clearing for the 21st
Century Act (also known as “Check 21”), which gives “substitute checks,”
such as digital check images and copies made from that image, the same
legal standing as the original paper
check;
|
|
·
|
The
USA PATRIOT Act, which requires savings banks to, among other things,
establish broadened anti-money laundering compliance programs, due
diligence policies and controls to ensure the detection and reporting of
money laundering. Such required compliance programs are
intended to supplement existing compliance requirements, also applicable
to financial institutions, under the Bank Secrecy Act and the Office of
Foreign Assets Control regulations;
and
|
|
·
|
The
Gramm-Leach-Bliley Act, which places limitations on the sharing of
consumer financial information by financial institutions with unaffiliated
third parties. Specifically, the
Gramm-
|
|
Leach-Bliley
Act requires all financial institutions offering financial products or
services to retail customers to provide such customers with the financial
institution’s privacy policy and provide such customers the opportunity to
“opt out” of the sharing of certain personal financial information with
unaffiliated third parties.
|
|
(i)
|
the
approval of interstate supervisory acquisitions by savings and loan
holding companies; and
|
|
(ii)
|
the
acquisition of a savings institution in another state if the laws of the
state of the target savings institution specifically permit such
acquisition.
|
|
·
|
the
interest income we earn on our interest-earning assets, such as loans and
securities; and
|
|
·
|
the
interest expense we pay on our interest-bearing liabilities, such as
deposits and borrowings.
|
Year
Acquired
|
Net
Book Value of
|
|||||||||||
Location
|
Leased
or Owned
|
or
Leased
|
Square
Footage
|
Real
Property
|
||||||||
(In
thousands)
|
||||||||||||
Main
Office:
|
||||||||||||
95
Elm Street
West
Springfield, MA 01089
|
Owned
|
1999
|
46,147
|
$
|
1,387
|
|||||||
Full
Service Branches:
|
||||||||||||
115
State Street
Springfield,
MA 01103
|
Leased
|
(1)
|
3,401
|
50
|
||||||||
1077
St. James Avenue
Springfield,
MA 01104
|
Owned
|
2003
|
8,354
|
864
|
||||||||
459
Main Street
Indian
Orchard, MA 01151
|
Leased
|
(2)
|
2,560
|
-
|
||||||||
528
Center Street
Ludlow,
MA 01056
|
Owned
|
2002
|
3,000
|
966
|
||||||||
1930
Wilbraham Road
Springfield,
MA 01129
|
Owned
|
2001
|
2,304
|
668
|
||||||||
670
Bliss Road
Longmeadow,
MA 01106
|
Leased
|
(3)
|
1,652
|
-
|
||||||||
1325
Springfield Street
Feeding
Hills, MA 01030
|
Leased
|
(4)
|
2,400
|
-
|
||||||||
180
Main Street
Northampton,
MA 01060
|
Leased
|
(5)
|
2,800
|
201
|
||||||||
10
Elm Street
Westfield,
MA 01085
|
Owned
|
1981
|
8,500
|
727
|
||||||||
14
Russell Road
Huntington,
MA 01050
|
Owned
|
2001
|
720
|
155
|
||||||||
168
Southampton Road
Westfield,
MA 01085
|
Leased
|
(6)
|
2,890
|
1,766
|
||||||||
1830
Northampton Street
Holyoke,
MA 01040
|
Owned
|
1994
|
6,409
|
565
|
94
Shaker Road
East
Longmeadow, MA 01028
|
Leased
|
2008
(7)
|
2,411
|
-
|
||||||||
806
Suffield Street
Agawam,
MA 01001
|
Leased
|
2008
(8)
|
2,972
|
1,259
|
||||||||
Other:
|
||||||||||||
52
Van Deene Avenue
West
Springfield, MA 01089
|
Owned
|
2005 (9)
|
547
|
620
|
||||||||
33
Westfield Street
West
Springfield, MA 01089
|
Owned
|
(10)
|
1,720
|
950
|
||||||||
140
Main Street
Northampton,
MA 01060
|
Leased
|
2006 (11)
|
1,375
|
-
|
||||||||
491
Pleasant Street
Northampton,
MA 01060
|
Leased
|
2008
(12)
|
7,405
|
542
|
||||||||
(1)
|
United
Bank has a lease for a five-year period expiring in June 2010 with a
renewal option for five additional years.
|
||||||||||
(2)
|
United
Bank has a lease for a five-year period expiring in May 2013 with an
additional five-year renewal option.
|
||||||||||
(3)
|
United
Bank has a lease for a five-year period expiring in September
2011.
|
||||||||||
(4)
|
United
Bank has a lease for a five-year period expiring in September 2010 with a
renewal option for five additional years.
|
||||||||||
(5)
|
United
Bank has a lease for a ten-year period expiring in April 2016 with two
five-year renewal options.
|
||||||||||
(6)
|
United
Bank has a lease for a twenty-five year period expiring in March 2031 with
two five-year renewal options. This lease
|
||||||||||
is
classified as a capitalized lease for accounting and reporting
purposes.
|
|||||||||||
(7)
|
United
Bank has a lease for a ten-year period expiring in January 2018 with a
renewal option for ten additional years.
|
||||||||||
(8)
|
United
Bank has a lease for a twenty-year period expiring in March 2028 with two
five-year renewal options. This lease
|
||||||||||
is
classified as a capitalized lease for accounting and reporting
purposes.
|
|||||||||||
(9)
|
This
office is a drive-up facility only.
|
||||||||||
(10)
|
A
portion of this facility is used as a Wealth Management office which
offers insurance, investment products and financial
|
||||||||||
planning
services.
|
|||||||||||
(11)
|
United
Bank has a two-year lease for this Wealth Management services facility
which expires in November 2010 and has one
|
||||||||||
two-year
renewal option.
|
|||||||||||
(12)
|
This
office is an express drive-up branch.
|
ITEM
5.
|
MARKET FOR
REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND
ISSUER PURCHASES OF EQUITY
SECURITIES
|
Price Per
Share (1)
|
Cash
|
|||||||||||
High
|
Low
|
Dividend
Declared
|
||||||||||
2008
|
||||||||||||
Fourth
quarter
|
$ | 15.32 | $ | 11.00 | $ | 0.07 | ||||||
Third
quarter
|
17.10 | 10.97 | 0.07 | |||||||||
Second
quarter
|
12.47 | 10.71 | 0.07 | |||||||||
First
quarter
|
12.00 | 10.23 | 0.06 | |||||||||
2007
|
||||||||||||
Fourth
quarter
|
$ | 12.27 | $ | 9.60 | $ | 0.06 | ||||||
Third
quarter
|
13.43 | 10.16 | 0.06 | |||||||||
Second
quarter
|
14.77 | 12.36 | 0.06 | |||||||||
First
quarter
|
13.78 | 12.66 | 0.06 | |||||||||
(1) As
a result of the Company's second-step conversion and offering, all share
prices for 2007 have been
|
||||||||||||
adjusted for the exchange ratio of 1.04079.
|
||||||||||||
Index
|
07/13/05
|
12/31/05
|
12/31/06
|
12/31/07
|
12/31/08
|
|||||||||||||||
United
Financial Bancorp, Inc.
|
100.00 | 98.13 | 119.32 | 101.73 | 141.84 | |||||||||||||||
Russell
2000
|
100.00 | 101.41 | 120.04 | 118.16 | 78.23 | |||||||||||||||
SNL
Thrift MHCs Index
|
100.00 | 100.51 | 137.78 | 121.12 | 127.07 | |||||||||||||||
SNL
Thrift Index
|
100.00 | 100.76 | 117.45 | 70.46 | 44.84 |
|
(b)
|
Not
Applicable.
|
(d)
|
||||||||||||||||
(c)
|
Maximum
Number
|
|||||||||||||||
Total
Number of
|
(or
Approximate
|
|||||||||||||||
Shares
|
Dollar
Value)
|
|||||||||||||||
(a)
|
(b)
|
Purchased
as Part
|
of
Shares that
|
|||||||||||||
Total
Number
|
Average
Price
|
of
Publicly
|
May
Yet Be
|
|||||||||||||
of
Shares
|
Paid
Per
|
Announced
Plans
|
Purchased
Under the
|
|||||||||||||
Period:
|
Purchased
|
Share
|
or
Programs
|
Plans
or Programs
|
||||||||||||
October
1 -31, 2008
|
- | $ | - | - | - | |||||||||||
November
1 - 30, 2008
|
- | - | - | - | ||||||||||||
December
1 -31, 2008
|
206,200 | 13.75 | 206,200 | 679,179 | ||||||||||||
Total
|
206,200 | $ | 13.75 | 206,200 |
ITEM
6.
|
SELECTED FINANCIAL DATA
|
At
December 31,
|
||||||||||||||||||||
2008
|
2007
|
2006
|
2005
|
2004
|
||||||||||||||||
(In
thousands)
|
||||||||||||||||||||
Selected
Financial Condition Data:
|
||||||||||||||||||||
Total
assets
|
$ | 1,263,134 | $ | 1,079,281 | $ | 1,009,433 | $ | 906,513 | $ | 772,008 | ||||||||||
Cash
and cash equivalents
|
13,572 | 14,254 | 25,419 | 15,843 | 23,233 | |||||||||||||||
Short-term
investments
|
1,071 | 1,030 | - | - | - | |||||||||||||||
Investment
securities available-for-sale
|
12,395 | 53,676 | 80,963 | 111,763 | 50,650 | |||||||||||||||
Investment
securities held-to-maturity
|
3,191 | 3,632 | 3,241 | 3,325 | 2,498 | |||||||||||||||
Mortgage-backed
securities available-for-sale
|
301,111 | 147,581 | 109,274 | 114,702 | 101,679 | |||||||||||||||
Loans, net (1)
|
864,421 | 819,117 | 756,180 | 630,558 | 569,243 | |||||||||||||||
Deposits
|
782,663 | 718,682 | 685,686 | 653,611 | 613,672 | |||||||||||||||
FHLB
advances
|
208,564 | 107,997 | 169,806 | 101,880 | 86,694 | |||||||||||||||
Repurchase
agreements
|
28,042 | 13,864 | 10,425 | 8,434 | 4,317 | |||||||||||||||
Stockholders'
equity
|
227,714 | 226,120 | 137,711 | 137,005 | 62,255 | |||||||||||||||
Non-performing assets
(2)
|
5,795 | 2,665 | 1,850 | 3,319 | 3,784 | |||||||||||||||
Years
Ended December 31,
|
||||||||||||||||||||
2008
|
2007
|
2006
|
2005
|
2004
|
||||||||||||||||
(Dollars
in thousands, except per share amounts)
|
||||||||||||||||||||
Selected
Operating Data:
|
||||||||||||||||||||
Interest
and dividend income
|
$ | 64,814 | $ | 59,250 | $ | 52,202 | $ | 43,233 | $ | 36,532 | ||||||||||
Interest
expense
|
25,003 | 30,083 | 24,647 | 16,206 | 12,148 | |||||||||||||||
Net
interest income before provision for loan
|
||||||||||||||||||||
losses
|
39,811 | 29,167 | 27,555 | 27,027 | 24,384 | |||||||||||||||
Provision
for loan losses
|
1,846 | 1,425 | 969 | 917 | 983 | |||||||||||||||
Net
interest income after provision for loan
|
||||||||||||||||||||
losses
|
37,965 | 27,742 | 26,586 | 26,110 | 23,401 | |||||||||||||||
Non-interest
income
|
5,220 | 5,735 | 5,392 | 5,020 | 5,134 | |||||||||||||||
Non-interest
expense
|
30,690 | 26,039 | 24,036 | 24,112 | 19,179 | |||||||||||||||
Income
before taxes
|
12,495 | 7,438 | 7,942 | 7,018 | 9,356 | |||||||||||||||
Income
tax expense
|
5,197 | 3,061 | 3,018 | 2,649 | 3,828 | |||||||||||||||
Net
income
|
$ | 7,298 | (4) | $ | 4,377 | $ | 4,924 | $ | 4,369 | (5) | $ | 5,528 | ||||||||
Basic earnings per share
(12)
|
$ | 0.45 | $ | 0.26 | $ | 0.29 | $ | 0.33 | $ | 0.58 | ||||||||||
Diluted earnings per share
(12)
|
$ | 0.45 | $ | 0.26 | $ | 0.29 | $ | 0.33 | $ | 0.58 | ||||||||||
Dividends per share (3)
|
$ | 0.27 | $ | 0.24 | $ | 0.20 |
NA
|
NA
|
||||||||||||
Number of shares outstanding
(12)
|
||||||||||||||||||||
Basic
|
16,043,727 | 16,852,566 | 17,139,599 | 13,193,088 | 9,564,571 | |||||||||||||||
Diluted
|
16,126,561 | 16,905,713 | 17,149,027 | 13,193,088 | 9,564,571 | |||||||||||||||
At
or For the Years Ended December 31,
|
||||||||||||||||||||
2008
|
2007
|
2006
|
2005
|
2004
|
||||||||||||||||
Selected
Financial Ratios and Other Data:
|
||||||||||||||||||||
Performance Ratios (6):
|
||||||||||||||||||||
Return
on average assets
|
0.62 | % (13) | 0.42 | % | 0.51 | % | 0.51 | % (11) | 0.73 | % | ||||||||||
Return
on average equity
|
3.23 | % (13) | 2.99 | % | 3.59 | % | 4.45 | % (11) | 9.25 | % | ||||||||||
Average
equity to average assets
|
19.06 | % | 14.17 | % | 14.35 | % | 11.42 | % | 7.87 | % | ||||||||||
Equity
to total assets at end of period (6)
|
18.03 | % | 20.95 | % | 13.64 | % | 15.11 | % | 8.06 | % | ||||||||||
Interest
rate spread (7)
|
2.69 | % | 2.08 | % | 2.23 | % | 2.77 | % | 3.03 | % | ||||||||||
Net
interest margin (8)
|
3.47 | % | 2.91 | % | 2.97 | % | 3.27 | % | 3.33 | % | ||||||||||
Average
interest-earning assets to average
|
||||||||||||||||||||
interest-bearing
liabilitites
|
135.95 | % | 127.77 | % | 128.10 | % | 125.61 | % | 118.30 | % | ||||||||||
Total
non-interest expense to average total assets
|
2.59 | % | 2.52 | % | 2.51 | % | 2.81 | % (11) | 2.53 | % | ||||||||||
Efficiency
ratio (9)
|
66.16 | % | 74.02 | % | 72.95 | % | 75.25 | % (11) | 64.98 | % | ||||||||||
Dividend
payout ratio
|
60.78 | % | 40.15 | % | 29.69 | % |
NA
|
NA
|
||||||||||||
Regulatory Capital Ratios
(6,10):
|
||||||||||||||||||||
Tier
I risk-based capital
|
17.76 | % | 19.25 | % | 14.83 | % | 17.21 | % | 11.67 | % | ||||||||||
Tier
I (core) capital
|
12.31 | % | 14.00 | % | 10.57 | % | 11.63 | % | 8.11 | % | ||||||||||
Tangible
Equity Ratio
|
12.31 | % | 14.00 | % |
NA
|
NA
|
NA
|
|||||||||||||
Total
risk-based capital
|
18.71 | % | 20.25 | % | 15.86 | % | 18.28 | % | 12.76 | % | ||||||||||
Asset Quality Ratios
(6):
|
||||||||||||||||||||
Non-performing
assets as a percent of total assets (2)
|
0.46 | % | 0.25 | % | 0.18 | % | 0.37 | % | 0.49 | % | ||||||||||
Non-performing
loans as a percent of total loans (2)
|
0.55 | % | 0.22 | % | 0.17 | % | 0.27 | % | 0.66 | % | ||||||||||
Allowance
for loan losses as a percent of total loans
|
0.95 | % | 0.94 | % | 0.95 | % | 1.00 | % | 1.00 | % | ||||||||||
Allowance
for loan losses as a percent of non-
|
||||||||||||||||||||
performing
loans (2)
|
171.98 | % | 432.16 | % | 560.40 | % | 371.69 | % | 151.96 | % | ||||||||||
Number
of full service customer facilities
|
15 | 13 | 13 | 11 | 11 |
(1)
|
The
allowance for loan losses at December 31, 2008, 2007, 2006, 2005 and 2004
was $8.3 million, $7.7 million, $7.2 million, $6.4 million and $5.8
million, respectively.
|
(2)
|
Non-performing
assets consist of non-performing loans and foreclosed real estate owned
(“REO”). Non-performing loans consist of non-accrual and
accruing loans 90 days or more overdue, while REO consists of real estate
acquired through foreclosure and real estate acquired by acceptance of a
deed-in-lieu of foreclosure.
|
(3)
|
The
following table sets forth aggregate cash dividends paid per period, which
is calculated by multiplying the dividend declared per share by the number
of shares outstanding as of the applicable record
date:
|
For
the Years Ended December 31,
|
||||||||
2008
|
2007
|
|||||||
Dividends
paid to public stockholders
|
$ | 4,436 | $ | 1,757 | ||||
Dividends
paid to United Mutual
|
||||||||
Holding
Company
|
N/A | - | ||||||
Total
dividends paid
|
$ | 4,436 | $ | 1,757 |
|
Payments
listed above for the year ended December 31, 2007 exclude cash dividends
waived by United Mutual Holding Company of $2.2 million. United Mutual
Holding Company began waiving dividends on January 20, 2006 and, as of
December 31, 2007, had waived dividends totaling $4.0 million. United
Mutual Holding Company was dissolved in December,
2007.
|
(4)
|
Exclusive
of the $1.4 million OTTI charge and related tax effect of $550,000, net
income in 2008 would have been $8.1
million.
|
(5)
|
Excluding
the effect of a $3,591,000 charitable contribution ($2,199,000 after
taxes) to fund the newly-formed United Charitable Foundation, net income
in 2005 would have amounted to $6,568,000 or $0.50 per
share.
|
(6)
|
Asset
Quality Ratios and Regulatory Capital Ratios and the “equity to total
assets” ratio are end-of-period ratios. With the exception of
end-of-period ratios, all ratios are based on average monthly balances
during the indicated periods and are annualized where
appropriate.
|
(7)
|
The
interest rate spread represents the difference between weighted-average
yield on interest-earning assets and the weighted-average cost of
interest-bearing liabilities.
|
(8)
|
The
net interest margin represents net interest income as a percent of average
interest-earning assets.
|
(9)
|
The
efficiency ratio represents non-interest expense divided by the sum of net
interest income and non-interest income and excludes gains/losses on sales
of securities and loans and impairment charges on
securities.
|
(10)
|
Regulatory
Capital Ratios are reported for United Bank
only.
|
(11)
|
Exclusive
of the contribution to the United Charitable Foundation in 2005, return on
average assets, return on average equity, total non-interest expense to
average total assets, and efficiency ratio would have been 0.76%, 6.70%,
2.43% and 64.41%, respectively.
|
(12)
|
The
Company issued 17,205,995 shares of common stock in its July 2005 initial
public offering, including 9,189,722 shares held by United Mutual Holding
Company. In December 2007, the Company completed a second step
conversion and offering in which each outstanding minority share was
exchanged for 1.04079 shares and 9,564,570 shares were sold in a
subscription and syndicated offering. All earnings per share
data and share information have been adjusted by the exchange ratio for
2007 and all periods prior.
|
(13)
|
Exclusive
of the $1.4 million OTTI charge and related tax effect of $550,000, the
return on average assets and average equity would have been 0.68% and
3.59%, respectively.
|
ITEM
7.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
|
Years
Ended December 31,
|
||||||||||||||||||||||||
2008
|
2007
|
|||||||||||||||||||||||
Interest
|
Interest
|
|||||||||||||||||||||||
Average
|
and
|
Yield/
|
Average
|
and
|
Yield/
|
|||||||||||||||||||
Balance
|
Dividends
|
Cost
|
Balance
|
Dividends
|
Cost
|
|||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||
Interest-earning
assets:
|
||||||||||||||||||||||||
Loans:
|
||||||||||||||||||||||||
Residential
real estate
|
$ | 356,685 | $ | 20,069 | 5.63 | % | $ | 342,719 | $ | 19,380 | 5.65 | % | ||||||||||||
Commercial
real estate
|
260,675 | 16,411 | 6.30 | % | 235,600 | 15,590 | 6.62 | % | ||||||||||||||||
Home
equity loans
|
119,401 | 6,793 | 5.69 | % | 117,640 | 7,704 | 6.55 | % | ||||||||||||||||
Commercial
and industrial
|
83,470 | 5,223 | 6.26 | % | 75,348 | 5,513 | 7.32 | % | ||||||||||||||||
Consumer
and other
|
30,211 | 1,679 | 5.56 | % | 30,586 | 1,625 | 5.31 | % | ||||||||||||||||
Total
loans
|
850,442 | 50,175 | 5.90 | % | 801,893 | 49,812 | 6.21 | % | ||||||||||||||||
Investment
securities
|
280,447 | 14,109 | 5.03 | % | 177,000 | 8,200 | 4.63 | % | ||||||||||||||||
Other
interest-earning assets
|
16,103 | 530 | 3.29 | % | 22,543 | 1,238 | 5.49 | % | ||||||||||||||||
Total
interest-earning assets
|
1,146,992 | 64,814 | 5.65 | % | 1,001,436 | 59,250 | 5.92 | % | ||||||||||||||||
Noninterest-earning
assets
|
39,501 | 32,744 | ||||||||||||||||||||||
Total
assets
|
$ | 1,186,493 | $ | 1,034,180 | ||||||||||||||||||||
Interest-bearing
liabilities:
|
||||||||||||||||||||||||
Savings
accounts
|
$ | 84,816 | 1,015 | 1.20 | % | $ | 64,029 | 593 | 0.93 | % | ||||||||||||||
Money
market accounts
|
170,439 | 3,336 | 1.96 | % | 178,005 | 5,631 | 3.16 | % | ||||||||||||||||
NOW
accounts
|
32,228 | 171 | 0.53 | % | 33,890 | 178 | 0.53 | % | ||||||||||||||||
Certificates
of deposit
|
363,836 | 13,309 | 3.66 | % | 337,193 | 15,540 | 4.61 | % | ||||||||||||||||
Total
interest-bearing deposits
|
651,319 | 17,831 | 2.74 | % | 613,117 | 21,942 | 3.58 | % | ||||||||||||||||
FHLB
advances
|
178,699 | 6,739 | 3.77 | % | 158,595 | 7,617 | 4.80 | % | ||||||||||||||||
Other
interest-bearing liabilities
|
13,686 | 433 | 3.16 | % | 12,042 | 524 | 4.35 | % | ||||||||||||||||
Total
interest-bearing liabilities
|
843,704 | 25,003 | 2.96 | % | 783,754 | 30,083 | 3.84 | % | ||||||||||||||||
Demand
deposits
|
107,182 | 99,155 | ||||||||||||||||||||||
Other
noninterest-bearing liabilities
|
9,503 | 4,725 | ||||||||||||||||||||||
Total
liabilities
|
960,389 | 887,634 | ||||||||||||||||||||||
Stockholders'
equity
|
226,104 | 146,546 | ||||||||||||||||||||||
Total
liabilities and stockholders' equity
|
$ | 1,186,493 | $ | 1,034,180 | ||||||||||||||||||||
Net
interest income
|
$ | 39,811 | $ | 29,167 | ||||||||||||||||||||
Interest
rate spread(1)
|
2.69 | % | 2.08 | % | ||||||||||||||||||||
Net
interest-earning assets(2)
|
$ | 303,288 | $ | 217,682 | ||||||||||||||||||||
Net
interest margin(3)
|
3.47 | % | 2.91 | % | ||||||||||||||||||||
Average
interest-earning assets to
|
||||||||||||||||||||||||
average
interest-bearing liabilities
|
135.95 | % | 127.77 | % |
|
(1)
|
Net
interest rate spread represents the difference between the yield on
average interest-earning assets and the cost of average interest-bearing
liabilities.
|
|
(2)
|
Net
interest-earning assets represents total interest-earning assets less
total interest-bearing liabilities.
|
|
(3)
|
Net interest margin represents
net interest income divided by average total interest-earning
assets.
|
Years
Ended December 31,
|
||||||||||||
2008
vs. 2007
|
||||||||||||
Increase
(Decrease) Due to
|
|
|||||||||||
Volume
|
Rate
|
Net
|
||||||||||
(In
thousands)
|
||||||||||||
Interest-earning
assets:
|
||||||||||||
Loans:
|
||||||||||||
Residential
real estate
|
$ | 786 | $ | (97 | ) | $ | 689 | |||||
Commercial
real estate
|
1,603 | (782 | ) | 821 | ||||||||
Home
equity loans
|
113 | (1,024 | ) | (911 | ) | |||||||
Commercial
and industrial
|
557 | (847 | ) | (290 | ) | |||||||
Consumer
and other
|
(20 | ) | 74 | 54 | ||||||||
Total
loans
|
3,039 | (2,676 | ) | 363 | ||||||||
Investment
securities
|
5,151 | 758 | 5,909 | |||||||||
Other
interest-earning assets
|
(295 | ) | (413 | ) | (708 | ) | ||||||
Total
interest-earning assets
|
7,895 | (2,331 | ) | 5,564 | ||||||||
Interest-bearing
liabilities:
|
||||||||||||
Savings
accounts
|
223 | 199 | 422 | |||||||||
Money
market accounts
|
(230 | ) | (2,065 | ) | (2,295 | ) | ||||||
NOW
accounts
|
(9 | ) | 2 | (7 | ) | |||||||
Certificates
of deposit
|
1,158 | (3,389 | ) | (2,231 | ) | |||||||
Total
interest-bearing deposits
|
1,142 | (5,253 | ) | (4,111 | ) | |||||||
FHLB
advances
|
889 | (1,767 | ) | (878 | ) | |||||||
Other
interest-bearing liabilities
|
65 | (156 | ) | (91 | ) | |||||||
Total
interest-bearing liabilities
|
2,096 | (7,176 | ) | (5,080 | ) | |||||||
Change
in net interest income
|
$ | 5,799 | $ | 4,845 | $ | 10,644 |
Years
Ended December 31,
|
||||||||||||||||||||||||
2007
|
2006
|
|||||||||||||||||||||||
Interest
|
Interest
|
|||||||||||||||||||||||
Average
|
and
|
Yield/
|
Average
|
and
|
Yield/
|
|||||||||||||||||||
Balance
|
Dividends
|
Cost
|
Balance
|
Dividends
|
Cost
|
|||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||
Interest-earning
assets:
|
||||||||||||||||||||||||
Loans:
|
||||||||||||||||||||||||
Residential
real estate
|
$ | 342,719 | $ | 19,380 | 5.65 | % | $ | 309,517 | $ | 17,292 | 5.59 | % | ||||||||||||
Commercial
real estate
|
235,600 | 15,590 | 6.62 | % | 189,694 | 12,485 | 6.58 | % | ||||||||||||||||
Home
equity loans
|
117,640 | 7,704 | 6.55 | % | 100,823 | 6,525 | 6.47 | % | ||||||||||||||||
Commercial
and industrial
|
75,348 | 5,513 | 7.32 | % | 64,164 | 4,595 | 7.16 | % | ||||||||||||||||
Consumer
and other
|
30,586 | 1,625 | 5.31 | % | 29,005 | 1,441 | 4.97 | % | ||||||||||||||||
Total
loans
|
801,893 | 49,812 | 6.21 | % | 693,203 | 42,338 | 6.11 | % | ||||||||||||||||
Investment
securities
|
177,000 | 8,200 | 4.63 | % | 213,430 | 8,843 | 4.14 | % | ||||||||||||||||
Other
interest-earning assets
|
22,543 | 1,238 | 5.49 | % | 19,641 | 1,021 | 5.20 | % | ||||||||||||||||
Total
interest-earning assets
|
1,001,436 | 59,250 | 5.92 | % | 926,274 | 52,202 | 5.64 | % | ||||||||||||||||
Noninterest-earning
assets
|
32,744 | 30,280 | ||||||||||||||||||||||
Total
assets
|
$ | 1,034,180 | $ | 956,554 | ||||||||||||||||||||
Interest-bearing
liabilities:
|
||||||||||||||||||||||||
Savings
accounts
|
$ | 64,029 | 593 | 0.93 | % | $ | 76,688 | 638 | 0.83 | % | ||||||||||||||
Money
market accounts
|
178,005 | 5,631 | 3.16 | % | 165,101 | 5,125 | 3.10 | % | ||||||||||||||||
NOW
accounts
|
33,890 | 178 | 0.53 | % | 36,050 | 103 | 0.29 | % | ||||||||||||||||
Certificates
of deposit
|
337,193 | 15,540 | 4.61 | % | 309,784 | 12,829 | 4.14 | % | ||||||||||||||||
Total
interest-bearing deposits
|
613,117 | 21,942 | 3.58 | % | 587,623 | 18,695 | 3.18 | % | ||||||||||||||||
FHLB
advances
|
158,595 | 7,617 | 4.80 | % | 127,397 | 5,621 | 4.41 | % | ||||||||||||||||
Other
interest-bearing liabilities
|
12,042 | 524 | 4.35 | % | 8,049 | 331 | 4.11 | % | ||||||||||||||||
Total
interest-bearing liabilities
|
783,754 | 30,083 | 3.84 | % | 723,069 | 24,647 | 3.41 | % | ||||||||||||||||
Demand
deposits
|
99,155 | 92,644 | ||||||||||||||||||||||
Other
noninterest-bearing liabilities
|
4,725 | 3,618 | ||||||||||||||||||||||
Total
liabilities
|
887,634 | 819,331 | ||||||||||||||||||||||
Stockholders'
equity
|
146,546 | 137,223 | ||||||||||||||||||||||
Total
liabilities and stockholders' equity
|
$ | 1,034,180 | $ | 956,554 | ||||||||||||||||||||
Net
interest income
|
$ | 29,167 | $ | 27,555 | ||||||||||||||||||||
Interest
rate spread(1)
|
2.08 | % | 2.23 | % | ||||||||||||||||||||
Net
interest-earning assets(2)
|
$ | 217,682 | $ | 203,205 | ||||||||||||||||||||
Net
interest margin(3)
|
2.91 | % | 2.97 | % | ||||||||||||||||||||
Average
interest-earning assets to
|
||||||||||||||||||||||||
average
interest-bearing liabilities
|
127.77 | % | 128.10 | % | ||||||||||||||||||||
____________________________
|
(1)
|
Net
interest rate spread represents the difference between the yield on
average interest-earning assets and the cost of average interest-bearing
liabilities.
|
(2)
|
Net
interest-earning assets represents total interest-earning assets less
total interest-bearing
liabilities.
|
(3)
|
Net
interest margin represents net interest income divided by average total
interest-earning assets.
|
Years
Ended December 31,
|
||||||||||||
2007
vs. 2006
|
||||||||||||
Increase
(Decrease) Due to
|
|
|||||||||||
Volume
|
Rate
|
Net
|
||||||||||
(In
thousands)
|
||||||||||||
Interest-earning
assets:
|
||||||||||||
Loans:
|
||||||||||||
Residential
real estate
|
$ | 1,876 | $ | 212 | $ | 2,088 | ||||||
Commercial
real estate
|
3,037 | 68 | 3,105 | |||||||||
Home
equity loans
|
1,100 | 79 | 1,179 | |||||||||
Commercial
and industrial
|
816 | 102 | 918 | |||||||||
Consumer
and other
|
81 | 103 | 184 | |||||||||
Total
loans
|
6,910 | 564 | 7,474 | |||||||||
Investment
securities
|
(1,614 | ) | 971 | (643 | ) | |||||||
Other
interest-earning assets
|
158 | 59 | 217 | |||||||||
Total
interest-earning assets
|
5,454 | 1,594 | 7,048 | |||||||||
Interest-bearing
liabilities:
|
||||||||||||
Savings
accounts
|
(112 | ) | 67 | (45 | ) | |||||||
Money
market accounts
|
407 | 99 | 506 | |||||||||
NOW
accounts
|
(6 | ) | 81 | 75 | ||||||||
Certificates
of deposit
|
1,191 | 1,520 | 2,711 | |||||||||
Total
interest-bearing deposits
|
1,480 | 1,767 | 3,247 | |||||||||
FHLB
advances
|
1,467 | 529 | 1,996 | |||||||||
Other
interest-bearing liabilities
|
173 | 20 | 193 | |||||||||
Total
interest-bearing liabilities
|
3,120 | 2,316 | 5,436 | |||||||||
Change
in net interest income
|
$ | 2,334 | $ | (722 | ) | $ | 1,612 |
Net
Interest Income At-Risk
|
||||
Estimated
Increase (Decrease)
|
Estimated
Increase (Decrease)
|
|||
Change
in Interest Rates
|
in
NII
|
in
NII
|
||
(basis
points)
|
(December
31, 2008)
|
(December
31, 2007)
|
||
-200
|
NA
|
2.1%
|
||
Stable
|
0.0%
|
0.0%
|
||
+200
|
(3.3)%
|
(4.2)%
|
December
31, 2008
|
||||||||||||||||||||||
NPV
as a Percentage of Present
|
||||||||||||||||||||||
Value
of Assets (3)
|
||||||||||||||||||||||
Estimated
Increase (Decrease) in
|
|
|||||||||||||||||||||
Change
in
|
NPV
|
|
Increase
|
|||||||||||||||||||
Interest
Rates
|
Estimated
|
(Decrease)
|
||||||||||||||||||||
(basis
points) (1)
|
NPV (2)
|
Amount
|
Percent
|
NPV
Ratio (4)
|
(basis
points)
|
|||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||
+300 | $ | 122,901 | $ | (66,712 | ) | (35 | )% | 10.52 | % | (424 | ) | |||||||||||
+200 | 147,220 | (42,393 | ) | (22 | ) | 12.19 | (257 | ) | ||||||||||||||
+100 | 170,707 | (18,906 | ) | (10 | ) | 13.68 | (108 | ) | ||||||||||||||
0 | 189,613 | 14.76 |
(1)
|
Assumes
an instantaneous uniform change in interest rates at all
maturities.
|
||||||||||
(2)
|
NPV
is the discounted present value of expected cash flows from assets,
liabilities and off-balance sheet contracts.
|
||||||||||
(3)
|
Present
value of assets represents the discounted present value of incoming cash
flows on interest-earning assets.
|
||||||||||
(4)
|
NPV
ratio represents NPV divided by the present value of
assets.
|
||||||||||
December
31, 2007
|
||||||||||||||||||||||
NPV
as a Percentage of Present
|
||||||||||||||||||||||
Value
of Assets (3)
|
||||||||||||||||||||||
Estimated
Increase (Decrease) in
|
||||||||||||||||||||||
Change
in
|
NPV
|
Increase
|
||||||||||||||||||||
Interest
Rates
|
Estimated
|
(Decrease)
|
||||||||||||||||||||
(basis
points) (1)
|
NPV (2)
|
Amount
|
Percent
|
NPV
Ratio (4)
|
(basis
points)
|
|||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||
+300 | $ | 108,167 | $ | (64,752 | ) | (37 | )% | 11.24 | % | (504 | ) | |||||||||||
+200 | 130,569 | (42,351 | ) | (24 | ) | 13.13 | (316 | ) | ||||||||||||||
+100 | 153,090 | (19,829 | ) | (11 | ) | 14.88 | (140 | ) | ||||||||||||||
0 | 172,919 | 16.29 | ||||||||||||||||||||
-100 | 186,881 | 13,962 | 8 | 17.14 | 86 | |||||||||||||||||
-200 | 193,894 | 20,975 | 12 | 17.44 | 115 |
(1)
|
Assumes
an instantaneous uniform change in interest rates at all
maturities.
|
||||||||||
(2)
|
NPV
is the discounted present value of expected cash flows from assets,
liabilities and off-balance sheet contracts.
|
||||||||||
(3)
|
Present
value of assets represents the discounted present value of incoming cash
flows on interest-earning assets.
|
||||||||||
(4)
|
NPV
ratio represents NPV divided by the present value of
assets.
|
Payments
Due by Period
|
||||||||||||||||||||
Less
Than
|
One
to Three
|
Three
to Five
|
More
than
|
|||||||||||||||||
One
Year
|
Years
|
Years
|
Five
Years
|
Total
|
||||||||||||||||
(In
thousands)
|
||||||||||||||||||||
Contractual
Obligations:
|
||||||||||||||||||||
Certificates
of deposit
|
$ | 281,068 | $ | 77,139 | $ | 17,659 | $ | - | $ | 375,867 | ||||||||||
Federal
Home Loan Bank advances
|
55,000 | 74,600 | 49,927 | 29,037 | 208,564 | |||||||||||||||
Repurchase
agreements
|
18,042 | - | - | 10,000 | 28,042 | |||||||||||||||
Standby
letters of credit
|
1,156 | - | - | - | 1,156 | |||||||||||||||
Operating
leases
|
595 | 992 | 721 | 2,917 | 5,225 | |||||||||||||||
Capitalized
leases
|
252 | 504 | 503 | 4,011 | 5,270 | |||||||||||||||
Future
benefits to be paid under retirement plans
|
198 | 3,064 | 1,037 | 760 | 5,059 | |||||||||||||||
Total
|
$ | 356,311 | $ | 156,299 | $ | 69,847 | $ | 46,725 | $ | 629,182 | ||||||||||
Commitments:
|
||||||||||||||||||||
Commitments
to extend credit
|
$ | 181,541 | $ | - | $ | - | $ | - | $ | 181,541 | ||||||||||
Commitment
to invest in venture capital fund
|
$ | 900 | $ | - | $ | - | $ | - | $ | 900 | ||||||||||
Total
|
$ | 182,441 | $ | - | $ | - | $ | - | $ | 182,441 |
Page
|
|
Report
of Independent Registered Public Accounting Firm on Financial
Statements
|
F-1
|
Financial
Statements
|
|
Consolidated
Balance Sheets
|
F-2
|
Consolidated
Statements of Earnings
|
F-3
|
Consolidated
Statements of Stockholders’ Equity and Comprehensive
Income
|
F-4
|
Consolidated
Statements of Cash Flows
|
F-5
|
Notes
to Consolidated Financial Statements
|
F-6
|
2008
|
2007
|
|||||||
ASSETS
|
||||||||
Cash
and due from banks
|
$ | 10,356 | $ | 14,219 | ||||
Interest-bearing
deposits
|
3,216 | 35 | ||||||
Total
cash and cash equivalents
|
13,572 | 14,254 | ||||||
Short-term
investments
|
1,071 | 1,030 | ||||||
Securities
available for sale, at fair value
|
313,506 | 201,257 | ||||||
Securities
held to maturity, at amortized cost (fair value of $3,238
at
|
||||||||
December
31, 2008 and $3,631 at December 31, 2007)
|
3,191 | 3,632 | ||||||
Loans,
net of allowance for loan losses of $8,250 at December 31,
2008
|
||||||||
and
$7,714 at December 31, 2007
|
864,421 | 819,117 | ||||||
Other
real estate owned
|
998 | 880 | ||||||
Accrued
interest receivable
|
4,706 | 4,477 | ||||||
Deferred
tax asset, net
|
7,969 | 4,953 | ||||||
Stock
in the Federal Home Loan Bank of Boston
|
12,223 | 10,257 | ||||||
Banking
premises and equipment, net
|
12,125 | 10,600 | ||||||
Bank-owned
life insurance
|
27,173 | 6,652 | ||||||
Other
assets
|
2,179 | 2,172 | ||||||
TOTAL
ASSETS
|
$ | 1,263,134 | $ | 1,079,281 | ||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||
Liabilities:
|
||||||||
Deposits:
|
||||||||
Interest-bearing
|
$ | 668,485 | $ | 616,672 | ||||
Non-interest-bearing
|
114,178 | 102,010 | ||||||
Total
deposits
|
782,663 | 718,682 | ||||||
Federal
Home Loan Bank of Boston advances
|
208,564 | 107,997 | ||||||
Repurchase
agreements
|
28,042 | 13,864 | ||||||
Escrow
funds held for borrowers
|
1,667 | 1,356 | ||||||
Capitalized
lease obligations
|
3,129 | 1,890 | ||||||
Accrued
expenses and other liabilities
|
11,355 | 9,372 | ||||||
Total
liabilities
|
1,035,420 | 853,161 | ||||||
Commitments
and contingencies (Notes E and L)
|
||||||||
Stockholders’
equity:
|
||||||||
Preferred
stock, par value $0.01 per share, authorized 50,000,000
shares;
|
||||||||
none
issued
|
- | - | ||||||
Common
stock, par value $0.01 per share, authorized 100,000,000
shares;
|
||||||||
17,763,747
shares issued at December 31, 2008 and December 31, 2007
|
178 | 178 | ||||||
Paid-in
capital
|
164,358 | 165,920 | ||||||
Retained
earnings
|
75,888 | 73,026 | ||||||
Unearned
compensation
|
(12,144 | ) | (12,835 | ) | ||||
Treasury
stock, at cost (261,798 shares at December 31, 2008)
|
(3,497 | ) | - | |||||
Accumulated
other comprehensive income (loss), net of taxes
|
2,931 | (169 | ) | |||||
Total
stockholders’ equity
|
227,714 | 226,120 | ||||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$ | 1,263,134 | $ | 1,079,281 | ||||
2008
|
2007
|
2006
|
||||||||||
Interest
and dividend income:
|
||||||||||||
Loans
|
$ | 50,175 | $ | 49,812 | $ | 42,338 | ||||||
Investments
|
14,109 | 8,200 | 8,843 | |||||||||
Other
interest-earning assets
|
530 | 1,238 | 1,021 | |||||||||
Total
interest and dividend income
|
64,814 | 59,250 | 52,202 | |||||||||
Interest
expense:
|
||||||||||||
Deposits
|
17,831 | 21,942 | 18,695 | |||||||||
Short-term
borrowings
|
1,417 | 4,135 | 3,198 | |||||||||
Long-term
debt
|
5,755 | 4,006 | 2,754 | |||||||||
Total
interest expense
|
25,003 | 30,083 | 24,647 | |||||||||
Net
interest income before provision for loan losses
|
39,811 | 29,167 | 27,555 | |||||||||
Provision
for loan losses
|
1,846 | 1,425 | 969 | |||||||||
Net
interest income after provision for loan losses
|
37,965 | 27,742 | 26,586 | |||||||||
Non-interest
income:
|
||||||||||||
Fee
income on depositors’ accounts
|
4,638 | 4,432 | 4,190 | |||||||||
Net
gain (loss) on sales of securities
|
23 | (95 | ) | (222 | ) | |||||||
Impairment
charges on securities
|
(1,377 | ) | (180 | ) | - | |||||||
Wealth
management income
|
799 | 692 | 426 | |||||||||
Income
from bank-owned life insurance
|
357 | 158 | 273 | |||||||||
Other
income
|
780 | 728 | 725 | |||||||||
Total
non-interest income
|
5,220 | 5,735 | 5,392 | |||||||||
Non-interest
expense:
|
||||||||||||
Salaries
and benefits
|
17,359 | 14,835 | 12,888 | |||||||||
Occupancy
expenses
|
2,327 | 1,925 | 1,792 | |||||||||
Marketing
expenses
|
1,440 | 1,374 | 1,436 | |||||||||
Data
processing expenses
|
3,190 | 2,735 | 2,474 | |||||||||
Professional
fees
|
1,679 | 1,276 | 1,148 | |||||||||
Other
expenses
|
4,695 | 3,894 | 4,298 | |||||||||
Total
non-interest expense
|
30,690 | 26,039 | 24,036 | |||||||||
Income
before income taxes
|
12,495 | 7,438 | 7,942 | |||||||||
Income
tax expense
|
5,197 | 3,061 | 3,018 | |||||||||
NET
INCOME
|
$ | 7,298 | $ | 4,377 | $ | 4,924 | ||||||
Earnings
per share:
|
||||||||||||
Basic
|
$ | 0.45 | $ | 0.26 | $ | 0.29 | ||||||
Diluted
|
$ | 0.45 | $ | 0.26 | $ | 0.29 | ||||||
Weighted
average shares outstanding:
|
||||||||||||
Basic
|
16,043,727 | 16,852,566 | 17,139,599 | |||||||||
Diluted
|
16,126,561 | 16,905,713 | 17,149,027 |
Accumulated
|
||||||||||||||||||||||||||||||||
Common
|
Other
|
|||||||||||||||||||||||||||||||
Shares
|
Common
|
Paid-In
|
Retained
|
Unearned
|
Treasury
|
Comprehensive
|
||||||||||||||||||||||||||
Outstanding
|
Stock
|
Capital
|
Earnings
|
Compensation
|
Stock
|
Income
(Loss)
|
Total
|
|||||||||||||||||||||||||
Balances
at December 31, 2005
|
17,205,995 | $ | 172 | $ | 78,446 | $ | 66,944 | $ | (6,092 | ) | $ | - | $ | (2,465 | ) | $ | 137,005 | |||||||||||||||
Net
income
|
- | - | - | 4,924 | - | - | - | 4,924 | ||||||||||||||||||||||||
Net
unrealized gain on securities available for sale,
|
||||||||||||||||||||||||||||||||
net
of reclassification adjustments and taxes
|
- | - | - | - | - | - | 514 | 514 | ||||||||||||||||||||||||
Total
comprehensive income
|
5,438 | |||||||||||||||||||||||||||||||
Cash
dividends paid ($0.20 per share)
|
- | - | - | (1,462 | ) | - | - | - | (1,462 | ) | ||||||||||||||||||||||
Treasury
stock purchases
|
(341,945 | ) | - | - | - | - | (4,405 | ) | - | (4,405 | ) | |||||||||||||||||||||
Reissuance
of treasury shares in connection with
|
||||||||||||||||||||||||||||||||
restricted
stock grants
|
290,500 | - | (3,741 | ) | - | - | 3,741 | - | - | |||||||||||||||||||||||
Stock-based
compensation
|
- | - | 728 | - | - | - | - | 728 | ||||||||||||||||||||||||
ESOP
shares committed to be released
|
- | - | 87 | - | 320 | - | - | 407 | ||||||||||||||||||||||||
Balances
at December 31, 2006
|
17,154,550 | 172 | 75,520 | 70,406 | (5,772 | ) | (664 | ) | (1,951 | ) | 137,711 | |||||||||||||||||||||
Net
income
|
- | - | - | 4,377 | - | - | - | 4,377 | ||||||||||||||||||||||||
Net
unrealized gain on securities available for sale,
|
||||||||||||||||||||||||||||||||
net
of reclassification adjustments and taxes
|
- | - | - | - | - | - | 2,463 | 2,463 | ||||||||||||||||||||||||
Prior
service costs on pension and other post
|
||||||||||||||||||||||||||||||||
retirement
benefit plans, net of tax
|
- | - | - | - | - | - | (681 | ) | (681 | ) | ||||||||||||||||||||||
Total
comprehensive income
|
6,159 | |||||||||||||||||||||||||||||||
Additional
shares issued pursuant to second step
|
||||||||||||||||||||||||||||||||
conversion
and offering
|
320,739 | 2 | (2 | ) | - | - | - | - | - | |||||||||||||||||||||||
Cancelation
of common stock owned by United
|
||||||||||||||||||||||||||||||||
Mutual
Holding Company
|
(9,189,722 | ) | (92 | ) | 92 | - | - | - | - | - | ||||||||||||||||||||||
Proceeds
from issuance of common stock
|
||||||||||||||||||||||||||||||||
pursuant
to second-step conversion, net of
|
||||||||||||||||||||||||||||||||
offering
costs of $5,438
|
9,564,570 | 96 | 90,112 | - | - | - | - | 90,208 | ||||||||||||||||||||||||
Cancelation
of treasury shares
|
- | - | (1,914 | ) | - | - | 1,914 | - | - | |||||||||||||||||||||||
Capital
contribution pursuant to dissolution
|
||||||||||||||||||||||||||||||||
of
United Mutual Holding Company
|
- | - | 82 | - | - | - | - | 82 | ||||||||||||||||||||||||
Shares
purchased for ESOP
|
- | - | - | - | (7,538 | ) | - | - | (7,538 | ) | ||||||||||||||||||||||
Cash
dividends paid ($0.24 per share)
|
- | - | - | (1,757 | ) | - | - | - | (1,757 | ) | ||||||||||||||||||||||
Treasury
stock purchases
|
(86,390 | ) | - | - | - | - | (1,250 | ) | - | (1,250 | ) | |||||||||||||||||||||
Stock-based
compensation
|
- | - | 1,880 | - | - | - | - | 1,880 | ||||||||||||||||||||||||
ESOP
shares committed to be released
|
- | - | 150 | - | 475 | - | - | 625 | ||||||||||||||||||||||||
Balances
at December 31, 2007
|
17,763,747 | 178 | 165,920 | 73,026 | (12,835 | ) | - | (169 | ) | 226,120 | ||||||||||||||||||||||
Net
income
|
- | - | - | 7,298 | - | - | - | 7,298 | ||||||||||||||||||||||||
Net
unrealized gain on securities available for sale,
|
||||||||||||||||||||||||||||||||
net
of reclassification adjustments and taxes
|
- | - | - | - | - | - | 3,331 | 3,331 | ||||||||||||||||||||||||
Adjustments
to pension and other post retirement
|
||||||||||||||||||||||||||||||||
benefit
plans, net of reclassificaton adjustments
|
||||||||||||||||||||||||||||||||
and
taxes
|
- | - | - | - | - | - | (231 | ) | (231 | ) | ||||||||||||||||||||||
Total
comprehensive income
|
10,398 | |||||||||||||||||||||||||||||||
Net
costs from issuance of common stock
|
||||||||||||||||||||||||||||||||
pursuant
to second-step conversion
|
- | - | (26 | ) | - | - | - | - | (26 | ) | ||||||||||||||||||||||
Repurchase
of stock to fund the 2008 Equity
|
||||||||||||||||||||||||||||||||
Incentive
Plan
|
(359,581 | ) | - | - | - | - | (4,240 | ) | - | (4,240 | ) | |||||||||||||||||||||
Shares
repurchased in connection with restricted
|
||||||||||||||||||||||||||||||||
stock
forfeited for tax purposes
|
(10,086 | ) | - | - | - | - | (125 | ) | - | (125 | ) | |||||||||||||||||||||
Reissuance
of treasury shares in connection with
|
||||||||||||||||||||||||||||||||
restricted
stock grants and stock appreciation
|
||||||||||||||||||||||||||||||||
rights
exercised
|
314,069 | - | (3,703 | ) | - | - | 3,703 | - | - | |||||||||||||||||||||||
Cash
dividends paid ($0.27 per share)
|
- | - | - | (4,436 | ) | - | - | - | (4,436 | ) | ||||||||||||||||||||||
Treasury
stock purchases
|
(206,200 | ) | - | - | - | - | (2,835 | ) | - | (2,835 | ) | |||||||||||||||||||||
Stock-based
compensation
|
- | - | 1,992 | - | - | - | - | 1,992 | ||||||||||||||||||||||||
ESOP
shares committed to be released
|
- | - | 175 | - | 691 | - | - | 866 | ||||||||||||||||||||||||
Balances
at December 31, 2008
|
17,501,949 | $ | 178 | $ | 164,358 | $ | 75,888 | $ | (12,144 | ) | $ | (3,497 | ) | $ | 2,931 | $ | 227,714 | |||||||||||||||
2008
|
2007
|
2006
|
||||||||||
Cash
flows from operating activities:
|
||||||||||||
Net
income
|
$ | 7,298 | $ | 4,377 | $ | 4,924 | ||||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||||||
Provision
for loan losses
|
1,846 | 1,425 | 969 | |||||||||
ESOP
expense
|
866 | 625 | 407 | |||||||||
Stock-based
compensation
|
1,992 | 1,880 | 728 | |||||||||
Amortization
of premiums and discounts
|
192 | 103 | 308 | |||||||||
Depreciation
and amortization
|
907 | 831 | 838 | |||||||||
Amortization
of intangible assets
|
30 | 30 | 25 | |||||||||
Provision
for other real estate owned
|
92 | - | - | |||||||||
Net
loss (gain) on sales of loans
|
- | 5 | (3 | ) | ||||||||
Net
loss (gain) on sale of other real estate owned
|
45 | (14 | ) | - | ||||||||
Net
(gain) loss on sale of property and equipment
|
- | (4 | ) | 21 | ||||||||
Net
(gain) loss on sale of available for sale securities
|
(23 | ) | 95 | 222 | ||||||||
Impairment
charges on securities
|
1,377 | 180 | - | |||||||||
Deferred
income tax benefit
|
(3,577 | ) | (2,348 | ) | (1,679 | ) | ||||||
Increase
in cash surrender value of bank-owned life insurance
|
(521 | ) | (348 | ) | (273 | ) | ||||||
Increase
in accrued interest receivable
|
(229 | ) | (157 | ) | (392 | ) | ||||||
(Increase)
decrease in other assets
|
(1,380 | ) | (789 | ) | 475 | |||||||
Increase
(decrease) in accrued expenses and other liabilities
|
1,842 | 3,697 | (42 | ) | ||||||||
Net
cash provided by operating activities
|
10,757 | 9,588 | 6,528 | |||||||||
Cash
flows from investing activities:
|
||||||||||||
Purchases
of securities available for sale
|
(231,991 | ) | (90,513 | ) | (47,764 | ) | ||||||
Proceeds
from sales of securities available for sale
|
51,448 | 16,537 | 28,896 | |||||||||
Proceeds
from calls, maturities and principal repayments of securities available
for sale
|
72,136 | 66,579 | 55,430 | |||||||||
Purchases
of securities held to maturity
|
- | (675 | ) | - | ||||||||
Proceeds
from maturities, calls and principal repayments of securities
held to maturity
|
435 | 274 | 75 | |||||||||
Investment
in short-term time deposits
|
(41 | ) | (1,030 | ) | - | |||||||
Purchases
of Federal Home Loan Bank of Boston stock
|
(1,966 | ) | (983 | ) | (2,686 | ) | ||||||
Proceeds
from sales of other real estate owned
|
655 | 576 | 1,852 | |||||||||
Net
loan originations, purchases and principal repayments
|
(48,060 | ) | (67,288 | ) | (127,570 | ) | ||||||
Proceeds
from sales of loans
|
- | 2,041 | 170 | |||||||||
Purchases
of property and equipment
|
(1,113 | ) | (685 | ) | (1,372 | ) | ||||||
Cash
paid to acquire Levine Financial Group
|
(92 | ) | (55 | ) | (100 | ) | ||||||
Proceeds
from sale of property and equipment
|
- | 21 | - | |||||||||
Purchases
of bank-owned life insurance
|
(20,000 | ) | - | - | ||||||||
Net
cash used in investing activities
|
(178,589 | ) | (75,201 | ) | (93,069 | ) | ||||||
Cash
flows from financing activities:
|
||||||||||||
Net
increase in deposits
|
63,981 | 32,996 | 32,075 | |||||||||
Net
increase (decrease) in short-term borrowings
|
38,145 | (51,145 | ) | 53,201 | ||||||||
Proceeds
from Federal Home Loan Bank of Boston long term advances
|
85,000 | 30,000 | 68,000 | |||||||||
Repayments
of Federal Home Loan Bank of Boston long term advances
|
(22,578 | ) | (40,664 | ) | (53,275 | ) | ||||||
Net
increase in repurchase agreements
|
14,178 | 3,439 | 1,991 | |||||||||
Net
increase (decrease) in escrow funds held for borrowers
|
311 | 235 | (8 | ) | ||||||||
Payments
on capitalized lease obligation
|
(225 | ) | (158 | ) | - | |||||||
Repurchases
of common stock to fund the 2008 Equity Incentive Plan
|
(4,240 | ) | - | - | ||||||||
Treasury
stock purchases
|
(2,960 | ) | (1,250 | ) | (4,405 | ) | ||||||
Cash
dividends paid
|
(4,436 | ) | (1,757 | ) | (1,462 | ) | ||||||
Net
(costs) proceeds from stock offering subscriptions
|
(26 | ) | 90,290 | - | ||||||||
Acquisition
of common stock by ESOP
|
- | (7,538 | ) | - | ||||||||
Net
cash provided by financing activities
|
167,150 | 54,448 | 96,117 | |||||||||
(Decrease)
increase in cash and cash equivalents
|
(682 | ) | (11,165 | ) | 9,576 | |||||||
Cash
and cash equivalents at beginning of year
|
14,254 | 25,419 | 15,843 | |||||||||
Cash
and cash equivalents at end of year
|
$ | 13,572 | $ | 14,254 | $ | 25,419 | ||||||
Supplemental
Disclosure of Cash Flow Information:
|
||||||||||||
Cash
paid during the period:
|
||||||||||||
Interest
on deposits and other borrowings
|
$ | 24,793 | $ | 30,361 | $ | 24,353 | ||||||
Income
taxes – net
|
9,612 | 2,467 | 3,882 | |||||||||
Non-cash
item:
|
||||||||||||
Capitalized
lease asset and obligations
|
$ | 1,308 | $ | 1,932 | $ | - | ||||||
Transfer
of loans to other real estate owned
|
910 | 880 | 562 | |||||||||
2008
|
2007
|
2006
|
||||||||||
Change
in unrealized holding gains on available for sale
|
||||||||||||
securities
|
$ | 4,028 | $ | 4,562 | $ | 633 | ||||||
Reclassification
adjustment for losses realized in
|
||||||||||||
income
|
1,354 | 275 | 222 | |||||||||
Net
change in unrealized gains
|
5,382 | 4,837 | 855 | |||||||||
Tax
effect
|
(2,051 | ) | (2,374 | ) | (341 | ) | ||||||
3,331 | 2,463 | 514 | ||||||||||
Pension
liability for retirement plans
|
(514 | ) | (1,152 | ) | - | |||||||
Pension
liability adjustment
|
136 | - | - | |||||||||
(378 | ) | (1,152 | ) | - | ||||||||
Tax
effect
|
147 | 471 | - | |||||||||
(231 | ) | (681 | ) | - | ||||||||
Other
comprehensive income
|
$ | 3,100 | $ | 1,782 | $ | 514 | ||||||
December
31, 2008
|
||||||||||||
Gross
|
Tax
|
Net
of
|
||||||||||
Amount
|
Effect
|
Tax
|
||||||||||
Unrealized
gain on securities available for sale
|
$ | 6,173 | $ | 2,331 | $ | 3,842 | ||||||
Pension
liability
|
(1,530 | ) | 619 | (911 | ) |
December
31, 2007
|
||||||||||||
Gross
|
Tax
|
Net
of
|
||||||||||
Amount
|
Effect
|
Tax
|
||||||||||
Unrealized
gain on securities available for sale
|
$ | 791 | $ | 279 | $ | 512 | ||||||
Pension
liability
|
(1,152 | ) | 471 | (681 | ) |
Amortized
|
Unrealized
|
Unrealized
|
||||||||||||||
Cost
|
Gain
|
Losses
|
Fair
Value
|
|||||||||||||
Securities Available
for Sale
|
||||||||||||||||
December
31, 2008:
|
||||||||||||||||
Debt
Securities:
|
||||||||||||||||
Government-sponsored
enterprises
|
$ | 467 | $ | - | $ | (2 | ) | $ | 465 | |||||||
Mortgage-backed
securities
|
294,824 | 6,601 | (314 | ) | 301,111 | |||||||||||
Municipal
bonds
|
10,504 | 83 | (195 | ) | 10,392 | |||||||||||
Corporate
bonds
|
1,538 | - | - | 1,538 | ||||||||||||
Total
|
$ | 307,333 | $ | 6,684 | $ | (511 | ) | $ | 313,506 | |||||||
December
31, 2007:
|
||||||||||||||||
Debt
Securities:
|
||||||||||||||||
Government-sponsored
enterprises
|
$ | 45,447 | $ | 51 | $ | (24 | ) | $ | 45,474 | |||||||
Mortgage-backed
securities
|
146,764 | 1,270 | (453 | ) | 147,581 | |||||||||||
Municipal
bonds
|
5,295 | 8 | (19 | ) | 5,284 | |||||||||||
Corporate
bonds
|
2,820 | 5 | (47 | ) | 2,778 | |||||||||||
Total
debt securities
|
200,326 | 1,334 | (543 | ) | 201,117 | |||||||||||
Marketable
equity securities
|
140 | - | - | 140 | ||||||||||||
Total
|
$ | 200,466 | $ | 1,334 | $ | (543 | ) | $ | 201,257 | |||||||
Amortized
|
Unrealized
|
Unrealized
|
||||||||||||||
Cost
|
Gain
|
Losses
|
Fair
Value
|
|||||||||||||
Securities Held to
Maturity
|
||||||||||||||||
December
31, 2008:
|
||||||||||||||||
IRB
|
$ | 1,122 | $ | - | $ | - | $ | 1,122 | ||||||||
Municipal
bonds
|
2,069 | 49 | (2 | ) | 2,116 | |||||||||||
Total
|
$ | 3,191 | $ | 49 | $ | (2 | ) | $ | 3,238 | |||||||
December
31, 2007:
|
||||||||||||||||
IRB
|
$ | 1,197 | $ | - | $ | - | $ | 1,197 | ||||||||
Municipal
bonds
|
2,435 | 11 | (12 | ) | 2,434 | |||||||||||
Total
|
$ | 3,632 | $ | 11 | $ | (12 | ) | $ | 3,631 |
Less
than 12 months
|
12
months or longer
|
Total
|
||||||||||||||||||||||||||
Unrealized
|
Unrealized
|
Number
of
|
Unrealized
|
|||||||||||||||||||||||||
Fair
Value
|
Losses
|
Fair
Value
|
Losses
|
Securities
|
Fair
Value
|
Losses
|
||||||||||||||||||||||
2008:
|
||||||||||||||||||||||||||||
Securities Available
for Sale
|
||||||||||||||||||||||||||||
Debt
Securities:
|
||||||||||||||||||||||||||||
Government-sponsored
enterprises
|
$ | 465 | $ | (2 | ) | $ | - | $ | - | 1 | $ | 465 | $ | (2 | ) | |||||||||||||
Mortgage-backed
securities
|
17,654 | (216 | ) | 4,256 | (98 | ) | 28 | 21,910 | (314 | ) | ||||||||||||||||||
Municipal
bonds
|
5,652 | (195 | ) | - | - | 17 | 5,652 | (195 | ) | |||||||||||||||||||
Corporate
bonds
|
- | - | - | - | - | - | - | |||||||||||||||||||||
Total
|
$ | 23,771 | $ | (413 | ) | $ | 4,256 | $ | (98 | ) | 46 | $ | 28,027 | $ | (511 | ) | ||||||||||||
Securities Held to
Maturity
|
||||||||||||||||||||||||||||
Municipal
bonds
|
$ | 385 | $ | (2 | ) | $ | - | $ | - | 1 | $ | 385 | $ | (2 | ) | |||||||||||||
Total
|
$ | 385 | $ | (2 | ) | $ | - | $ | - | 1 | $ | 385 | $ | (2 | ) | |||||||||||||
2007:
|
||||||||||||||||||||||||||||
Securities Available
for Sale
|
||||||||||||||||||||||||||||
Debt
Securities:
|
||||||||||||||||||||||||||||
Government-sponsored
enterprises
|
$ | - | $ | - | $ | 8,600 | $ | (24 | ) | 6 | $ | 8,600 | $ | (24 | ) | |||||||||||||
Mortgage-backed
securities
|
23,159 | (190 | ) | 29,410 | (263 | ) | 53 | 52,569 | (453 | ) | ||||||||||||||||||
Municipal
bonds
|
2,277 | (19 | ) | - | - | 6 | 2,277 | (19 | ) | |||||||||||||||||||
Corporate
bonds
|
1,857 | (47 | ) | - | - | 2 | 1,857 | (47 | ) | |||||||||||||||||||
Total
|
$ | 27,293 | $ | (256 | ) | $ | 38,010 | $ | (287 | ) | 67 | $ | 65,303 | $ | (543 | ) | ||||||||||||
Securities Held to
Maturity
|
||||||||||||||||||||||||||||
Municipal
bonds
|
$ | 666 | $ | (9 | ) | $ | 757 | $ | (3 | ) | 6 | $ | 1,423 | $ | (12 | ) | ||||||||||||
Total
|
$ | 666 | $ | (9 | ) | $ | 757 | $ | (3 | ) | 6 | $ | 1,423 | $ | (12 | ) |
2008
|
2007
|
2006
|
||||||||||
Proceeds
from sales
|
$ | 51,448 | $ | 16,537 | $ | 28,896 | ||||||
Gross
gains
|
72 | 40 | 56 | |||||||||
Gross
losses
|
(49 | ) | (135 | ) | (278 | ) |
At
December 31, 2008
|
||||||||||||||||
Securities
|
Securities
|
|||||||||||||||
Available
for Sale
|
Held
to Maturity
|
|||||||||||||||
Amortized
|
Amortized
|
|||||||||||||||
Cost
|
Fair
Value
|
Cost
|
Fair
Value
|
|||||||||||||
Due
in one year or less
|
$ | - | $ | - | $ | 372 | $ | 372 | ||||||||
Due
from one year to five years
|
12,657 | 12,817 | 918 | 938 | ||||||||||||
Due
from five years to ten years
|
17,473 | 18,017 | 764 | 793 | ||||||||||||
Due
after ten years
|
277,203 | 282,672 | 1,137 | 1,135 | ||||||||||||
$ | 307,333 | $ | 313,506 | $ | 3,191 | $ | 3,238 |
2008
|
2007
|
|||||||
One-
to four-family residential real estate
|
$ | 356,428 | $ | 339,470 | ||||
Commercial
real estate
|
248,457 | 214,776 | ||||||
Construction
|
32,082 | 42,059 | ||||||
Home
equity loans
|
120,724 | 116,241 | ||||||
Commercial
and industrial
|
84,919 | 81,562 | ||||||
Automobile
|
17,332 | 22,461 | ||||||
Consumer
|
10,334 | 8,126 | ||||||
Total
loans
|
870,276 | 824,695 | ||||||
Net
deferred loan costs and fees
|
2,395 | 2,136 | ||||||
Allowance
for loan losses
|
(8,250 | ) | (7,714 | ) | ||||
Loans,
net
|
$ | 864,421 | $ | 819,117 |
December
31,
|
||||||||
2008
|
2007
|
|||||||
Beginning
balance
|
$ | 1,127 | $ | 1,150 | ||||
New
loans
|
829 | 460 | ||||||
Repayments
|
(257 | ) | (483 | ) | ||||
Ending
balance
|
$ | 1,699 | $ | 1,127 |
2008
|
2007
|
2006
|
||||||||||
Balance
at beginning of year
|
$ | 7,714 | $ | 7,218 | $ | 6,382 | ||||||
Provision
for loan losses
|
1,846 | 1,425 | 969 | |||||||||
Charge-offs
|
(1,336 | ) | (983 | ) | (186 | ) | ||||||
Recoveries
|
26 | 54 | 53 | |||||||||
Balance
at end of year
|
$ | 8,250 | $ | 7,714 | $ | 7,218 |
2008
|
2007
|
Estimated
Useful Lives
|
|||||||
Land
and improvements
|
$ | 2,387 | $ | 2,387 | |||||
Buildings
and improvements
|
8,076 | 7,625 |
25
- 40 Years
|
||||||
Leasehold
improvements
|
471 | 471 |
Lesser
of useful life or term of lease
|
||||||
Furniture
and equipment
|
2,104 | 1,802 |
5 Years
|
||||||
Assets
under capitalized lease
|
3,240 | 1,932 |
Lesser
of lease term or useful life
|
||||||
16,278 | 14,217 | ||||||||
Less
accumulated depreciation
|
|||||||||
and
amortization
|
(4,153 | ) | (3,617 | ) | |||||
$ | 12,125 | $ | 10,600 |
Operating
|
Capital
|
|||||||||||
Leases
|
Leases
|
Total
|
||||||||||
Years ending December
31,
|
||||||||||||
2009
|
$ | 595 | $ | 252 | $ | 847 | ||||||
2010
|
555 | 252 | 807 | |||||||||
2011
|
437 | 252 | 689 | |||||||||
2012
|
374 | 252 | 626 | |||||||||
2013
|
347 | 251 | 598 | |||||||||
Thereafter
|
2,917 | 4,011 | 6,928 | |||||||||
Total
minimum lease payments
|
$ | 5,225 | $ | 5,270 | $ | 10,495 |
2008
|
2007
|
|||||||
Demand
|
$ | 114,178 | $ | 102,010 | ||||
NOW
|
32,390 | 35,207 | ||||||
Savings
|
99,492 | 65,711 | ||||||
Money
market
|
160,736 | 168,107 | ||||||
Certificates
of deposit
|
375,867 | 347,647 | ||||||
$ | 782,663 | $ | 718,682 |
Three
months or less
|
$ | 55,336 | ||
Over
three months through six months
|
26,088 | |||
Over
six months through one year
|
33,713 | |||
Over
one year to three years
|
28,057 | |||
Over
three years
|
7,162 | |||
Total
|
$ | 150,356 |
Less
than one year
|
$ | 281,068 | ||
Over
one year to two years
|
41,173 | |||
Over
two years to three years
|
35,967 | |||
Over
three years to four years
|
5,830 | |||
Over
four years to five years
|
11,829 | |||
Total
time deposits
|
$ | 375,867 |
Years
Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
NOW
|
$ | 171 | $ | 178 | $ | 103 | ||||||
Regular
savings
|
1,015 | 593 | 638 | |||||||||
Money
market
|
3,336 | 5,631 | 5,125 | |||||||||
Certificates
of deposit
|
13,309 | 15,540 | 12,829 | |||||||||
Total
|
$ | 17,831 | $ | 21,942 | $ | 18,695 |
2008
|
2007
|
2006
|
||||||||||||||||||||||
Weighted
|
Weighted
|
Weighted
|
||||||||||||||||||||||
Amount
|
Average
Rate
|
Amount
|
Average
Rate
|
Amount
|
Average
Rate
|
|||||||||||||||||||
Within
1 year
|
$ | 55,000 | 1.26 | % | $ | 17,152 | 5.00 | % | $ | 65,000 | 5.16 | % | ||||||||||||
Over
1 year to 2 years
|
22,279 | 4.35 | % | 13,000 | 5.13 | % | 16,411 | 5.06 | % | |||||||||||||||
Over
2 years to 3 years
|
52,321 | 4.03 | % | 26,767 | 4.15 | % | 13,000 | 5.13 | % | |||||||||||||||
Over
3 years to 4 years
|
8,033 | 4.34 | % | 23,267 | 4.60 | % | 16,111 | 3.20 | % | |||||||||||||||
Over
4 years to 5 years
|
41,894 | 4.02 | % | 9,968 | 4.34 | % | 39,184 | 4.60 | % | |||||||||||||||
Over
5 years
|
29,037 | 3.84 | % | 17,843 | 4.36 | % | 20,100 | 4.32 | % | |||||||||||||||
$ | 208,564 | 3.32 | % | $ | 107,997 | 4.55 | % | $ | 169,806 | 4.73 | % | |||||||||||||
At
or For the Years Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Balance
at year-end
|
$ | 18,042 | $ | 13,864 | $ | 10,425 | ||||||
Average
amount outstanding during the year
|
8,534 | 7,788 | 5,546 | |||||||||
Interest
expense incurred during the year
|
158 | 259 | 167 | |||||||||
Maximum
amount outstanding at any month-end
|
18,042 | 13,864 | 10,425 | |||||||||
Average
interest rate during the year
|
1.85 | % | 3.33 | % | 3.01 | % | ||||||
Weighted
average interest rate at year-end
|
1.60 | % | 3.12 | % | 3.38 | % |
Years
Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Current
tax provision:
|
||||||||||||
Federal
|
$ | 6,942 | $ | 4,240 | $ | 3,618 | ||||||
State
|
1,832 | 1,161 | 1,079 | |||||||||
8,774 | 5,401 | 4,697 | ||||||||||
Deferred
tax benefit:
|
||||||||||||
Federal
|
(2,890 | ) | (1,719 | ) | (1,289 | ) | ||||||
State
|
(687 | ) | (621 | ) | (390 | ) | ||||||
(3,577 | ) | (2,340 | ) | (1,679 | ) | |||||||
Tax
provision
|
$ | 5,197 | $ | 3,061 | $ | 3,018 | ||||||
Years
Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Statutory
federal income tax rate
|
34.0 | % | 34.0 | % | 34.0 | % | ||||||
Increase
(decrease) resulting from:
|
||||||||||||
State
taxes, net of federal tax benefit
|
6.0 | 4.8 | 5.7 | |||||||||
Stock-based
compensation
|
1.6 | 2.6 | - | |||||||||
Tax-exempt
obligations
|
(1.3 | ) | (0.9 | ) | - | |||||||
Bank
owned life insurance
|
(1.0 | ) | (0.7 | ) | - | |||||||
Other,
net
|
2.3 | 1.4 | (1.7 | ) | ||||||||
Effective
tax rate
|
41.6 | % | 41.2 | % | 38.0 | % |
December
31,
|
||||||||
2008
|
2007
|
|||||||
Deferred
tax asset:
|
||||||||
Federal
|
$ | 7,694 | $ | 4,868 | ||||
State
|
2,322 | 1,729 | ||||||
10,016 | 6,597 | |||||||
Deferred
tax liability:
|
||||||||
Federal
|
(1,771 | ) | (1,280 | ) | ||||
State
|
(276 | ) | (364 | ) | ||||
(2,047 | ) | (1,644 | ) | |||||
Net
deferred tax asset:
|
$ | 7,969 | $ | 4,953 |
At
December 31,
|
||||||||
2008
|
2007
|
|||||||
Cash
basis of accounting
|
$ | 41 | $ | 28 | ||||
Investments:
|
||||||||
Net
unrealized gain on securities
|
||||||||
available
for sale
|
(992 | ) | (283 | ) | ||||
Impairment
loss on preferred stock
|
- | 22 | ||||||
Retirement
benefits
|
619 | 471 | ||||||
Depreciation
|
699 | 704 | ||||||
Deferred
expense
|
(1,027 | ) | (1,077 | ) | ||||
Allowance
for loan losses
|
3,295 | 3,158 | ||||||
Employee
benefit plans
|
2,178 | 1,739 | ||||||
Market
value adjustment on loans
|
3,156 | (275 | ) | |||||
Contribution
carryover
|
- | 454 | ||||||
Other
|
- | 12 | ||||||
Net
deferred tax asset
|
$ | 7,969 | $ | 4,953 |
At
December 31,
|
||||||||
2008
|
2007
|
|||||||
Balance
at beginning of year
|
$ | 4,953 | $ | 2,851 | ||||
Deferred
tax benefit
|
3,577 | 2,340 | ||||||
Change
in unrealized gain on securities
|
||||||||
available
for sale
|
(561 | ) | (238 | ) | ||||
Balance
at end of year
|
$ | 7,969 | $ | 4,953 |
Years
Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Net
income
|
$ | 7,298 | $ | 4,377 | $ | 4,924 | ||||||
Weighted
average common shares applicable to
|
||||||||||||
basic EPS (1,
4)
|
16,043,727 | 16,852,566 | 17,139,599 | |||||||||
Effect of dilutive potential
common shares (2, 3)
|
82,834 | 53,147 | 9,428 | |||||||||
Weighted
average common shares applicable to
|
||||||||||||
diluted
EPS
|
16,126,561 | 16,905,713 | 17,149,027 | |||||||||
Earnings
per share:
|
||||||||||||
Basic
|
$ | 0.45 | $ | 0.26 | $ | 0.29 | ||||||
Diluted
|
$ | 0.45 | $ | 0.26 | $ | 0.29 |
|
||||||
(1) In
December 2007, the Company completed a second-step conversion and offering
in which each outstanding
|
||||||
minority
share was exchanged for 1.04079 shares and 9,564,570 shares were sold in a
subscription and syndicated
|
||||||
offering.
All share data in prior periods have been adjusted by the exhange
ratio.
|
||||||
(2) For
the years ended December 31, 2008, 2007 and 2006, options to purchase
1,175,964, 785,275 and 778,510 shares,
|
||||||
respectively,
were not included in the computation of diluted earnings per share because
they were antidilutive.
|
||||||
(3) Includes
incremental shares related to stock options and restricted
stock.
|
||||||
(4) Excludes
shares repurchased in June 2008 through September 2008 to fund the 2008
Equity Incentive Plan.
|
||||||
Stock
Awards Outstanding
|
Stock
Options Outstanding
|
|||||||||||||||||||
Weighted-
|
Weighted-
|
|||||||||||||||||||
Shares
|
Average
|
Average
|
||||||||||||||||||
Available
|
Number
of
|
Grant
|
Number
of
|
Exercise
|
||||||||||||||||
for
Grant
|
Shares
|
Value
|
Shares
|
Price
|
||||||||||||||||
Balance
at December 31, 2006
|
140,534 | 302,354 | $ | 12.35 | 778,510 | $ | 12.37 | |||||||||||||
Granted
|
(6,765 | ) | - | - | 6,765 | 11.36 | ||||||||||||||
Stock
options exercised
|
- | - | - | - | - | |||||||||||||||
Shares
vested
|
- | (68,375 | ) | 12.35 | - | - | ||||||||||||||
Forfeited
|
- | - | - | - | - | |||||||||||||||
Cancelled
|
- | - | - | - | - | |||||||||||||||
Balance
at December 31, 2007
|
133,769 | 233,979 | $ | 12.35 | 785,275 | $ | 12.36 | |||||||||||||
New
Incentive Plan
|
1,258,534 | - | - | - | - | |||||||||||||||
Granted
|
(1,093,000 | ) | 313,500 | 11.66 | 779,500 | 11.66 | ||||||||||||||
Stock
options exercised
|
- | - | - | (3,538 | ) | 12.35 | ||||||||||||||
Shares
vested
|
- | (58,487 | ) | 12.36 | - | - | ||||||||||||||
Forfeited
|
12,387 | - | - | (12,387 | ) | 12.35 | ||||||||||||||
Cancelled
|
23,105 | - | - | (23,105 | ) | 12.35 | ||||||||||||||
Balance
at December 31, 2008
|
334,795 | 488,992 | $ | 11.91 | 1,525,745 | $ | 12.00 |
(1) In
conjunction with the Company's second-step conversion in December 2007,
the numbers of shares and
|
|||||||||||||
weighted
average prices for 2006 and 2007 have been adjusted by the conversion
ratio of 1.04079.
|
|||||||||||||
2008
|
2007
|
|||||||
Weighted
average fair value
|
$ | 2.57 | $ | 3.08 | ||||
Expected
term (short-cut method)
|
6.50
years
|
6.50
years
|
||||||
Volatility
|
19.30 | % | 25.00 | % | ||||
Expected
dividend yield
|
1.88 | % | 2.00 | % | ||||
Weighted
average risk-free interest rate
|
3.89 | % | 4.36 | % | ||||
Stock
Options
|
||||||||
Outstanding
|
Exercisable
|
|||||||
Total
number of shares
|
1,525,745 | 302,439 | ||||||
Weighted
average exercise price
|
$ | 12.00 | $ | 12.33 | ||||
Aggregate
intrinsic value
|
$ | 4,789 | $ | 850 | ||||
Weighted
average remaining contractual term
|
8.6
years
|
7.4
years
|
At
or For the Years Ended December 31,
|
||||||||||||||||
2008
|
2007
|
|||||||||||||||
Director
|
Director
|
|||||||||||||||
Retirement
|
Retirement
|
|||||||||||||||
SERP
|
Plan
|
SERP
|
Plan
|
|||||||||||||
Change
in projected benefit obligation:
|
||||||||||||||||
Beginning
of period
|
$ | 1,796 | $ | 588 | $ | 1,707 | $ | 567 | ||||||||
Service
cost
|
306 | 57 | 63 | 13 | ||||||||||||
Interest
cost
|
137 | 31 | 26 | 8 | ||||||||||||
Actuarial
loss
|
482 | 32 | - | - | ||||||||||||
Benefits
paid
|
- | - | - | - | ||||||||||||
End
of period
|
$ | 2,721 | $ | 708 | $ | 1,796 | $ | 588 | ||||||||
Funded
status:
|
||||||||||||||||
Accrued
benefit cost
|
$ | 2,721 | $ | 708 | $ | 1,796 | $ | 588 | ||||||||
Amounts
recognized in accumulated other
|
||||||||||||||||
comprehensive
income consist of:
|
||||||||||||||||
Transition
obligation
|
- | - | - | - | ||||||||||||
Prior
service cost
|
(746 | ) | (292 | ) | (823 | ) | (329 | ) | ||||||||
Net
losses
|
(459 | ) | (32 | ) | - | - | ||||||||||
Total
|
$ | (1,205 | ) | $ | (324 | ) | $ | (823 | ) | $ | (329 | ) | ||||
Weighted-average
assumptions used to
|
||||||||||||||||
determine
benefit obligations:
|
||||||||||||||||
Discount
rate
|
6.00 | % | 5.00 | % | 6.00 | % | 5.00 | % | ||||||||
Rate
of compensation increase
|
5.00 | % | 2.00 | % | 5.00 | % | 2.00 | % |
For
the Years Ended December 31,
|
||||||||||||||||
2008
|
2007
|
|||||||||||||||
Director
|
Director
|
|||||||||||||||
Retirement
|
Retirement
|
|||||||||||||||
SERP
|
Plan
|
SERP
|
Plan
|
|||||||||||||
Periodic
benefit cost:
|
||||||||||||||||
Service
cost
|
$ | 306 | $ | 57 | $ | 63 | $ | 13 | ||||||||
Interest
cost
|
137 | 31 | 26 | 8 | ||||||||||||
Total
pension cost
|
443 | 88 | 89 | 21 | ||||||||||||
Prior
service cost amortization
|
76 | 36 | 19 | 9 | ||||||||||||
Net
loss amortization
|
24 | - | - | - | ||||||||||||
Net
periodic benefit cost
|
$ | 543 | $ | 124 | $ | 108 | $ | 30 | ||||||||
Weighted-average
assumptions used to
|
||||||||||||||||
determine
net periodic benefit cost:
|
||||||||||||||||
Discount
rate
|
6.00 | % | 6.00 | % | 6.00 | % | 6.00 | % | ||||||||
Rate
of compensation increase
|
5.00 | % | 2.00 | % | 5.00 | % | 2.00 | % |
Director
|
||||||||
Retirement
|
||||||||
SERP
|
Plan
|
|||||||
Years ending December
31,
|
||||||||
2009
|
$ | - | $ | 198 | ||||
2010
|
- | - | ||||||
2011
|
3,064 | - | ||||||
2012
|
856 | 181 | ||||||
2013
|
- | - | ||||||
2014
through 2018
|
- | 760 | ||||||
Total
expected benefit payments
|
$ | 3,920 | $ | 1,139 |
December
31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Allocated
|
109,880 | 64,738 | 33,372 | |||||||||
Committed
to be released
|
71,707 | 46,208 | 33,372 | |||||||||
Unallocated
|
1,236,631 | 1,308,339 | 600,714 | |||||||||
1,418,218 | 1,419,285 | 667,458 |
2008
|
2007
|
|||||||
Unused
lines of credit
|
$ | 155,448 | $ | 146,579 | ||||
Amounts
due mortgagors
|
14,479 | 31,168 | ||||||
Standby
letters of credit
|
1,156 | 1,627 | ||||||
Commitments
to originate loans
|
10,458 | 15,890 |
At
December 31, 2008
|
||||||||||||||||
Total
|
||||||||||||||||
Level
1
|
Level
2
|
Level
3
|
Fair
Value
|
|||||||||||||
Securities
available for sale
|
$ | 465 | $ | 311,209 | $ | 1,832 | $ | 313,506 | ||||||||
Mortgage
servicing rights
|
- | - | 124 | 124 | ||||||||||||
Total
|
$ | 465 | $ | 311,209 | $ | 1,956 | $ | 313,630 |
Balance
as of January 1, 2008
|
$ | 136 | ||
Transfers
in and out of Level 3, net
|
3,155 | |||
Total
realized/unrealized losses included in net income
|
(1,389 | ) | ||
Decrease
in unrealized loss
|
54 | |||
Purchases,
sales, issuances and settlements
|
- | |||
Balance
as of December 31, 2008
|
$ | 1,956 |
At
or For the Year Ended December 31, 2008
|
||||||||||||||||
Total
|
||||||||||||||||
Level
1
|
Level
2
|
Level
3
|
Gains/(Losses)
|
|||||||||||||
Assets:
|
||||||||||||||||
Loans
|
$ | - | $ | 5,362 | $ | - | $ | (120 | ) | |||||||
Other
real estate owned
|
- | 998 | - | (137 | ) | |||||||||||
Other
assets
|
- | - | 1,320 | - | ||||||||||||
Total
assets
|
$ | - | $ | 6,360 | $ | 1,320 | $ | (257 | ) |
2008
|
2007
|
|||||||||||||||
Carrying
|
Estimated
|
Carrying
|
Estimated
|
|||||||||||||
Value
|
Fair
Value
|
Value
|
Fair
Value
|
|||||||||||||
Financial
Assets:
|
||||||||||||||||
Cash
and cash equivalents
|
$ | 13,572 | $ | 13,572 | $ | 14,254 | $ | 14,254 | ||||||||
Short-term
investments
|
1,071 | 1,071 | 1,030 | 1,030 | ||||||||||||
Securities
available for sale
|
313,506 | 313,506 | 201,257 | 201,257 | ||||||||||||
Securities
held to maturity
|
3,191 | 3,238 | 3,632 | 3,631 | ||||||||||||
Stock
in Federal Home Loan Bank of Boston
|
12,223 | 12,223 | 10,257 | 10,257 | ||||||||||||
Net
loans
|
864,421 | 870,731 | 819,117 | 822,309 | ||||||||||||
Accrued
interest receivable
|
4,706 | 4,706 | 4,477 | 4,477 | ||||||||||||
Financial
Liabilities:
|
||||||||||||||||
Deposits
(with no stated maturity)
|
406,796 | 406,796 | 371,035 | 371,035 | ||||||||||||
Time
deposits
|
375,867 | 378,424 | 347,647 | 347,828 | ||||||||||||
Federal
Home Loan Bank of Boston advances
|
208,564 | 217,236 | 107,997 | 108,791 | ||||||||||||
Repurchase
agreements
|
28,042 | 28,021 | 13,864 | 13,864 | ||||||||||||
Accrued
interest payable
|
627 | 627 | 417 | 417 |
To
Be Well Capitalized
|
||||||||||||||||||||||||||||
For
Capital
|
Under
Regulatory
|
|||||||||||||||||||||||||||
Actual
|
Adequacy
Purposes
|
Framework
|
||||||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||||||
As
of December 31, 2008:
|
||||||||||||||||||||||||||||
Total
Risk-based Capital
|
||||||||||||||||||||||||||||
(to
Risk Weighted Assets)
|
$ | 162,782 | 18.7 | % |
>
|
$ | 69,590 |
>
|
8.0 | % |
>
|
$ | 86,988 |
>
|
10.0 | % | ||||||||||||
Tier
I Risk-based Capital
|
||||||||||||||||||||||||||||
(to
Risk Weighted Assets)
|
154,532 | 17.8 | % |
>
|
34,795 |
>
|
4.0 | % |
>
|
52,193 |
>
|
6.0 | % | |||||||||||||||
Tier
I (Core) Capital
|
||||||||||||||||||||||||||||
(to
Adjusted Total Assets)
|
154,532 | 12.3 | % |
>
|
50,231 |
>
|
4.0 | % |
>
|
62,789 |
>
|
5.0 | % | |||||||||||||||
Tangible
Equity
|
||||||||||||||||||||||||||||
(to
Tangible Assets)
|
154,532 | 12.3 | % |
>
|
18,837 |
>
|
1.5 | % |
>
|
N/A
|
||||||||||||||||||
As
of December 31, 2007:
|
||||||||||||||||||||||||||||
Total
Risk-based Capital
|
||||||||||||||||||||||||||||
(to
Risk Weighted Assets)
|
$ | 155,973 | 20.3 | % |
>
|
$ | 61,624 |
>
|
8.0 | % |
>
|
$ | 77,029 |
>
|
10.0 | % | ||||||||||||
Tier
I Risk-based Capital
|
||||||||||||||||||||||||||||
(to
Risk Weighted Assets)
|
148,259 | 19.3 | % |
>
|
30,812 |
>
|
4.0 | % |
>
|
46,218 |
>
|
6.0 | % | |||||||||||||||
Tier
I (Core) Capital
|
||||||||||||||||||||||||||||
(to
Adjusted Total Assets)
|
148,259 | 14.0 | % |
>
|
42,347 |
>
|
4.0 | % |
>
|
52,934 |
>
|
5.0 | % | |||||||||||||||
Tangible
Equity
|
||||||||||||||||||||||||||||
(to
Tangible Assets)
|
148,259 | 14.0 | % |
>
|
15,880 |
>
|
1.5 | % |
>
|
N/A
|
||||||||||||||||||
December
31
|
||||||||
2008
|
2007
|
|||||||
Total
consolidated equity
|
$ | 227,714 | $ | 226,120 | ||||
Adjustments:
|
||||||||
Additional
equity capital of United Financial Bancorp, Inc.
|
(70,076 | ) | (77,802 | ) | ||||
Accumulated
other comprehensive (income) loss
|
(2,931 | ) | 169 | |||||
Disallowed
goodwill and intangible assets
|
(175 | ) | (258 | ) | ||||
Other
|
- | 30 | ||||||
Tangible,
Tier I and Core Capital
|
154,532 | 148,259 | ||||||
Allowance
for loan losses
|
8,250 | 7,714 | ||||||
Total
risk-based capital
|
$ | 162,782 | $ | 155,973 |
BALANCE
SHEETS
|
||||||||
December
31,
|
December
31,
|
|||||||
2008
|
2007
|
|||||||
ASSETS
|
||||||||
Cash
and cash equivalents
|
$ | 53,184 | $ | 44,157 | ||||
Short-term
investments
|
1,071 | 1,030 | ||||||
Investment
in Bank
|
157,638 | 148,318 | ||||||
Securities
available for sale, at fair value
|
- | 18,606 | ||||||
ESOP
loan receivable
|
12,829 | 13,160 | ||||||
Accrued
interest receivable
|
- | 247 | ||||||
Other
assets
|
3,174 | 1,145 | ||||||
TOTAL
ASSETS
|
$ | 227,896 | $ | 226,663 | ||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||
Other
liabilities
|
$ | 182 | $ | 543 | ||||
Stockholders’
equity
|
227,714 | 226,120 | ||||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$ | 227,896 | $ | 226,663 |
STATEMENTS OF
INCOME
|
||||||||||||
Years
Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Income:
|
||||||||||||
Investment
interest
|
$ | 1,235 | $ | 1,252 | $ | 1,258 | ||||||
ESOP
loan interest
|
955 | 536 | 439 | |||||||||
Gain
(loss) on sale of securities
|
15 | - | (9 | ) | ||||||||
Other
income
|
3 | - | - | |||||||||
Total
income
|
2,208 | 1,788 | 1,688 | |||||||||
Expense:
|
||||||||||||
Professional
services
|
1,311 | 1,105 | 958 | |||||||||
Other
expenses
|
47 | 43 | 31 | |||||||||
Total
expense
|
1,358 | 1,148 | 989 | |||||||||
Income
before income taxes and equity in
|
||||||||||||
undistributed
earnings in the Bank
|
850 | 640 | 699 | |||||||||
Income
tax expense
|
348 | 261 | 235 | |||||||||
Income
before equity in undistributed earnings
|
||||||||||||
of
the Bank
|
502 | 379 | 464 | |||||||||
Equity
in undistributed earnings of the Bank
|
6,796 | 3,998 | 4,460 | |||||||||
NET
INCOME
|
$ | 7,298 | $ | 4,377 | $ | 4,924 |
STATEMENTS OF CASH
FLOWS
|
||||||||||||
Years
Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Cash
flows from operating activities:
|
||||||||||||
Net
income
|
$ | 7,298 | $ | 4,377 | $ | 4,924 | ||||||
Adjustments
to reconcile net income to net cash
|
||||||||||||
provided
by (used in) operating activities:
|
||||||||||||
Equity
in undistributed earnings of the bank
|
(6,796 | ) | (3,998 | ) | (4,460 | ) | ||||||
Net
amortization of discounts and premiums
|
2 | (27 | ) | (83 | ) | |||||||
Net
(gain) loss on sale of available for sale securities
|
(15 | ) | - | 9 | ||||||||
(Decrease)
increase in deferred income taxes
|
(3 | ) | (525 | ) | 3 | |||||||
Decrease
in accrued interest receivable
|
247 | 17 | 57 | |||||||||
Decrease
(increase) in other assets
|
618 | (457 | ) | (717 | ) | |||||||
(Decrease)
increase in intercompany payables and
|
||||||||||||
other
liabilities
|
(359 | ) | 136 | 233 | ||||||||
Net
cash provided by (used in) operating activities
|
992 | (477 | ) | (34 | ) | |||||||
Cash
flows from investing activities:
|
||||||||||||
Purchases
of securities available for sale
|
- | (12,059 | ) | (2,094 | ) | |||||||
Proceeds
from sales of securities available for sale
|
9,352 | - | 4,990 | |||||||||
Proceeds
from maturities and principal repayments
|
||||||||||||
of
securities available for sale
|
9,218 | 15,181 | 6,934 | |||||||||
Investment
in short term time deposits
|
(41 | ) | (1,030 | ) | - | |||||||
Loan
to fund ESOP
|
- | (7,538 | ) | - | ||||||||
Principal
payments on ESOP loan
|
331 | 270 | 158 | |||||||||
Net
cash provided by (used in) investing activities
|
18,860 | (5,176 | ) | 9,988 | ||||||||
Cash
flows from financing activities:
|
||||||||||||
Return
of capital from United Bank (investment in
|
||||||||||||
United
Bank)
|
837 | (45,152 | ) | 3,579 | ||||||||
Repurchase
of stock to fund the 2008 Incentive Plan
|
(4,240 | ) | - | - | ||||||||
Treasury
stock purchases
|
(2,960 | ) | (1,250 | ) | (4,405 | ) | ||||||
Cash
dividends paid
|
(4,436 | ) | (1,757 | ) | (1,462 | ) | ||||||
Net
(costs) proceeds from stock issuance
|
(26 | ) | 90,289 | - | ||||||||
Net
cash (used in) provided by financing activities
|
(10,825 | ) | 42,130 | (2,288 | ) | |||||||
Increase
in cash and cash equivalents
|
9,027 | 36,477 | 7,666 | |||||||||
Cash
and cash equivalents at beginning of period
|
44,157 | 7,680 | 14 | |||||||||
Cash
and cash equivalents at end of period
|
$ | 53,184 | $ | 44,157 | $ | 7,680 | ||||||
Supplemental
Disclosure of Cash Flow Information:
|
||||||||||||
Cash
paid during the period:
|
||||||||||||
Income
taxes – net
|
6,521 | 1,097 | 229 |
Three
Months Ended
|
||||||||||||||||
March
31
|
June
30
|
September
30
|
December
31
|
|||||||||||||
2008:
|
||||||||||||||||
Interest
income
|
$ | 15,406 | $ | 15,973 | $ | 16,811 | $ | 16,624 | ||||||||
Interest
expense
|
6,375 | 6,065 | 6,275 | 6,288 | ||||||||||||
Net
interest income
|
9,031 | 9,908 | 10,536 | 10,336 | ||||||||||||
Provision
for loan losses
|
184 | 651 | 644 | 367 | ||||||||||||
Non-interest
income
|
1,519 | 1,574 | 1,733 | 394 | (1) | |||||||||||
Non-interest
expense
|
7,176 | 7,550 | 7,806 | 8,158 | ||||||||||||
Income
before income taxes
|
3,190 | 3,281 | 3,819 | 2,205 | ||||||||||||
Income
tax expense
|
1,224 | 1,272 | 1,455 | 1,246 | ||||||||||||
Net
income
|
$ | 1,966 | $ | 2,009 | $ | 2,364 | $ | 959 | ||||||||
Basic
earnings per share
|
$ | 0.12 | $ | 0.12 | $ | 0.15 | $ | 0.06 | ||||||||
Diluted
earnings per share
|
$ | 0.12 | $ | 0.12 | $ | 0.15 | $ | 0.06 | ||||||||
2007:
|
||||||||||||||||
Interest
income
|
$ | 14,312 | $ | 14,513 | $ | 14,976 | $ | 15,449 | ||||||||
Interest
expense
|
7,356 | 7,378 | 7,723 | 7,626 | ||||||||||||
Net
interest income
|
6,956 | 7,135 | 7,253 | 7,823 | ||||||||||||
Provision
for loan losses
|
284 | 320 | 436 | 385 | ||||||||||||
Non-interest
income
|
1,398 | 1,435 | 1,412 | 1,490 | ||||||||||||
Non-interest
expense
|
6,647 | 6,575 | 6,131 | 6,686 | ||||||||||||
Income
before income taxes
|
1,423 | 1,675 | 2,098 | 2,242 | ||||||||||||
Income
tax expense
|
589 | 697 | 807 | 968 | ||||||||||||
Net
income
|
$ | 834 | $ | 978 | $ | 1,291 | $ | 1,274 | ||||||||
Basic
earnings per share
|
$ | 0.05 | $ | 0.06 | $ | 0.08 | $ | 0.08 | ||||||||
Diluted
earnings per share
|
$ | 0.05 | $ | 0.06 | $ | 0.08 | $ | 0.08 | ||||||||
(1) Includes
other-than-temporary investment impairment charges totaling
$1,377.
|
||||||||||||||||
ITEM
9.
|
CHANGES IN AND
DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
|
|
(b)
|
Management’s
report on internal control over financial
reporting.
|
|
(c)
|
Attestation
report
|
|
(d)
|
Changes
to internal controls
|
ITEM
12.
|
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
|
ITEM
13.
|
CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS, DIRECTOR
INDEPENDENCE
|
|
(A)
|
Report
of Independent Registered Public Accounting Firm on Financial
Statements
|
|
(B)
|
Consolidated
Balance Sheets - at December 31, 2008 and
2007
|
|
(C)
|
Consolidated
Statements of Earnings - Years Ended December 31, 2008, 2007 and
2006
|
|
(D)
|
Consolidated
Statements of Stockholders’ Equity and Comprehensive Income - Years Ended
December 31, 2008, 2007 and 2006
|
|
(E)
|
Consolidated
Statements of Cash Flows - Years ended December 31, 2008, 2007 and
2006
|
|
(F)
|
Notes
to Consolidated Financial
Statements.
|
3.1
|
Articles
of Incorporation of United Financial Bancorp, Inc. (1)
|
3.2
|
Amended
and Restated Bylaws of United Financial Bancorp, Inc.
|
4
|
Form
of Common Stock Certificate of United Financial Bancorp, Inc.
(1)
|
10.1
|
Form
of Employee Stock Ownership Plan (2)
|
10.2
|
Employment
Agreement by and between United Bank and Richard B. Collins
(3)
|
10.3
|
Change
in Control Agreement by and between United Bank and Keith E. Harvey
(3)
|
10.4
|
Change
in Control Agreement by and between United Bank and J. Jeffrey Sullivan
(3)
|
10.5
|
Change
in Control Agreement by and between United Bank and Mark A. Roberts
(3)
|
10.6
|
United
Bank 2007 Supplemental Retirement Plan for Senior Executives
(3)
|
10.7
|
Split
Dollar Life Insurance Agreement by and between United Bank and Richard B.
Collins (4)
|
10.8
|
Split
Dollar Life Insurance Agreement by and between United Bank and Keith E.
Harvey (4)
|
10.9
|
Split
Dollar Life Insurance Agreement by and between United Bank and John J.
Patterson (4)
|
10.10
|
United
Bank 2006 Stock-Based Incentive Plan (5)
|
10.11
|
United
Bank 2008 Annual Incentive Plan
|
10.12
|
United
Bank 2007 Director Retirement Plan (6)
|
10.13
|
Directors
Fee Continuation Plan (2)
|
10.14
|
Deferred
Income Agreement by and between United Bank and Donald G. Helliwell
(2)
|
10.15
|
Deferred
Income Agreement by and between United Bank and Robert W. Bozenhard, Jr.
(2)
|
10.16
|
Deferred
Income Agreement by and between United Bank and George W. Jones
(2)
|
10.17
|
United
Financial Bancorp, Inc. 2008 Equity Incentive Plan (7)
|
11
|
Statement
Regarding Computation of Per Share Earnings (refer to Note I of Part
I,
|
Item
1- Consolidated Financial Statements)
|
|
21
|
Subsidiaries
of Registrant (1)
|
23
|
Consent
of Independent Registered Public Accounting Firm
|
31.1
|
Certification
of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
|
31.2
|
Certification
of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
|
32
|
Certification
of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
|
Certification
of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
|
|
(1)
|
Incorporated
by reference to the Registration Statement on Form S-1 of United Financial
Bancorp, Inc. (File No. 333-144245), originally filed with the Securities
and Exchange Commission on June 29, 2007.
|
(2)
|
Incorporated
by reference to the Registration Statement on Form S-1 of United Financial
Bancorp, Inc. (File No. 333-123371), originally filed with the
Securities and Exchange Commission on March 16,
2005.
|
(3)
|
Incorporated
by reference to the Form 8-K of United Financial Bancorp, Inc. filed with
the Securities and Exchange Commission on November 29,
2007.
|
(4)
|
Incorporated
by reference to the Form 8-K of United Financial Bancorp, Inc. filed with
the Securities and Exchange Commission on January 2,
2008.
|
(5)
|
Incorporated
by reference to Appendix B to the proxy statement for the 2006 Annual
Meeting of Stockholders of United Financial Bancorp, Inc. (File No.
000-51369), filed by United Financial Bancorp, Inc. under the Securities
Exchange Act of 1934, on June 12, 2006.
|
(6)
|
Incorporated
by reference to the Form 8-K of United Financial Bancorp, Inc. filed with
the Securities and Exchange Commission on November 21,
2007.
|
(7)
|
Incorporated
by reference to Appendix A of the Company's Definitive Proxy Statement for
the 2008 Annual Meeting of Stockholders (File No. 000-52947), as filed
with the SEC on April 29, 2008).
|
UNITED
FINANCIAL BANCORP, INC.
|
|
Date:
March 13, 2009
|
By: /s/ Richard B. Collins
|
Richard
B. Collins
|
|
Chairman,
President and Chief Executive Officer
|
|
(Duly
Authorized Representative)
|
Signatures
|
Title
|
Date
|
||
/s/
Richard B. Collins
|
Chief
Executive Officer,
|
March
13, 2009
|
||
Richard
B. Collins
|
President
and Chairman
(Principal Executive Officer) |
|||
/s/
Mark A. Roberts
|
Executive
Vice President and
|
March
13, 2009
|
||
Mark
A. Roberts
|
Chief
Financial Officer
(Principal Financial and Accounting Officer) |
|||
/s/
Michael F. Crowley
|
Director
|
March
13, 2009
|
||
Michael
F. Crowley
|
||||
/s/
Carol Moore Cutting
|
Director
|
March
13, 2009
|
||
Carol
Moore Cutting
|
||||
/s/
Carol A. Leary
|
Director
|
March
13, 2009
|
||
Carol
A. Leary
|
||||
/s/
G. Todd Marchant
|
Director
|
March
13, 2009
|
||
G.
Todd Marchant
|
||||
/s/
Kevin E. Ross
|
Director
|
March
13, 2009
|
||
Kevin
E. Ross
|
||||
/s/
Robert A. Stewart, Jr.
|
Director
|
March
13, 2009
|
||
Robert
A. Stewart, Jr.
|
||||
/s/
Thomas H. Themistos
|
Director
|
March
13, 2009
|
||
Thomas
H. Themistos
|
||||
/s/
Michael F. Werenski
|
Director
|
March
13, 2009
|
||
Michael
F. Werenski
|