Massachusetts
|
73-1627673
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
Common Stock, $0.01 par value per share
|
The NASDAQ Global Select Market
|
(Title of each class)
|
(Name of each exchange on which registered)
|
ITEM
|
PAGE
|
||
2
|
|||
25
|
|||
28
|
|||
29
|
|||
30
|
|||
30
|
|||
31
|
|||
34
|
|||
36
|
|||
51
|
|||
51
|
|||
51
|
|||
51
|
|||
52
|
|||
53
|
|||
53
|
|||
53
|
|||
53
|
|||
53
|
|||
54
|
●
|
changes in the real estate market or local economy;
|
●
|
changes in interest rates;
|
●
|
changes in laws and regulations to which we are subject; and
|
●
|
competition in our primary market area.
|
BUSINESS
|
At December 31,
|
||||||||||||||||||||||||||||||||||||||||
2010
|
2009
|
2008
|
2007
|
2006
|
||||||||||||||||||||||||||||||||||||
Percent of
|
Percent of
|
Percent of
|
Percent of
|
Percent of
|
||||||||||||||||||||||||||||||||||||
Amount
|
Total
|
Amount
|
Total
|
Amount
|
Total
|
Amount
|
Total
|
Amount
|
Total
|
|||||||||||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||||||||||||||
Real estate loans:
|
||||||||||||||||||||||||||||||||||||||||
Commercial
|
$ | 221,578 | 43.57 | % | $ | 229,061 | 48.08 | % | $ | 223,857 | 46.61 | % | $ | 189,964 | 45.22 | % | $ | 174,556 | 44.74 | % | ||||||||||||||||||||
Residential
|
112,680 | 22.17 | 64,299 | 13.50 | 62,810 | 13.08 | 72,170 | 17.18 | 79,308 | 20.33 | ||||||||||||||||||||||||||||||
Home equity
|
36,116 | 7.09 | 34,755 | 7.29 | 35,562 | 7.40 | 35,940 | 8.56 | 30,232 | 7.75 | ||||||||||||||||||||||||||||||
Total real estate loans
|
370,374 | 72.83 | 328,115 | 68.87 | 322,229 | 67.09 | 298,074 | 70.96 | 284,096 | 72.82 | ||||||||||||||||||||||||||||||
Other loans
|
||||||||||||||||||||||||||||||||||||||||
Commercial and industrial
|
135,250 | 26.59 | 145,012 | 30.44 | 153,861 | 32.03 | 116,514 | 27.74 | 100,237 | 25.69 | ||||||||||||||||||||||||||||||
Consumer, other
|
2,960 | 0.58 | 3,307 | 0.69 | 4,248 | 0.88 | 5,479 | 1.30 | 5,841 | 1.49 | ||||||||||||||||||||||||||||||
Total other loans
|
138,210 | 27.17 | 148,319 | 31.13 | 158,109 | 32.91 | 121,993 | 29.04 | 106,078 | 27.18 | ||||||||||||||||||||||||||||||
Total loans
|
508,584 | 100.00 | % | 476,434 | 100.00 | % | 480,338 | 100.00 | % | 420,067 | 100.00 | % | 390,174 | 100.00 | % | |||||||||||||||||||||||||
Unearned premiums and net deferred
|
||||||||||||||||||||||||||||||||||||||||
loan fees and costs, net
|
742 | 360 | 593 | 561 | 447 | |||||||||||||||||||||||||||||||||||
Allowance for loan losses
|
(6,934 | ) | (7,645 | ) | (8,796 | ) | (5,726 | ) | (5,437 | ) | ||||||||||||||||||||||||||||||
Total loans, net
|
$ | 502,392 | $ | 469,149 | $ | 472,135 | $ | 414,902 | $ | 385,184 | ||||||||||||||||||||||||||||||
At December 31, 2010
|
||||||||||||||||||||||||
Residential
|
Commercial
|
Commercial
|
||||||||||||||||||||||
Real Estate
|
Home Equity
|
Real Estate
|
and Industrial
|
Consumer
|
||||||||||||||||||||
Loans
|
Loans
|
Loans
|
Loans
|
Loans
|
Totals
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
Amount due:
|
||||||||||||||||||||||||
Within one year
|
$ | 14,806 | $ | 18,050 | $ | 21,929 | $ | 76,355 | $ | 639 | $ | 131,779 | ||||||||||||
After one year:
|
||||||||||||||||||||||||
One to three years
|
3,062 | 437 | 51,961 | 30,025 | 916 | 86,401 | ||||||||||||||||||
Three to five years
|
722 | 1,604 | 114,873 | 19,872 | 980 | 138,051 | ||||||||||||||||||
Five to ten years
|
5,812 | 7,605 | 13,617 | 4,429 | - | 31,463 | ||||||||||||||||||
Ten to twenty years
|
33,752 | 8,420 | 15,354 | - | - | 57,526 | ||||||||||||||||||
Over twenty years
|
54,526 | - | 3,844 | 4,569 | 425 | 63,364 | ||||||||||||||||||
Total due after one year
|
97,874 | 18,066 | 199,649 | 58,895 | 2,321 | 376,805 | ||||||||||||||||||
Total amount due:
|
112,680 | 36,116 | 221,578 | 135,250 | 2,960 | 508,584 | ||||||||||||||||||
Net deferred loan origination
costs
|
314 | 297 | (150 | ) | 275 | 6 | 742 | |||||||||||||||||
Allowance for loan losses
|
(664 | ) | (213 | ) | (3,182 | ) | (2,849 | ) | (26 | ) | (6,934 | ) | ||||||||||||
Loans, net
|
$ | 112,330 | $ | 36,200 | $ | 218,246 | $ | 132,676 | $ | 2,940 | $ | 502,392 |
Due After December 31, 2011
|
||||||||||||
Fixed
|
Adjustable
|
Total
|
||||||||||
(In thousands)
|
||||||||||||
Real estate loans:
|
||||||||||||
Residential
|
$ | 94,470 | $ | 3,404 | $ | 97,874 | ||||||
Home equity
|
18,066 | - | 18,066 | |||||||||
Commercial real estate
|
48,500 | 151,149 | 199,649 | |||||||||
Total real estate loans
|
161,036 | 154,553 | 315,589 | |||||||||
Other loans:
|
||||||||||||
Commercial and industrial
|
46,892 | 12,003 | 58,895 | |||||||||
Consumer
|
2,321 | - | 2,321 | |||||||||
Total other loans
|
49,213 | 12,003 | 61,216 | |||||||||
Total loans
|
$ | 210,249 | $ | 166,556 | $ | 376,805 |
For the Years Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
(In thousands)
|
||||||||||||
Loans:
|
||||||||||||
Balance outstanding at beginning of year
|
$ | 476,434 | $ | 480,338 | $ | 420,067 | ||||||
Originations:
|
||||||||||||
Real estate loans:
|
||||||||||||
Residential
|
1,830 | 1,378 | 2,807 | |||||||||
Home equity
|
13,167 | 16,601 | 12,120 | |||||||||
Commercial
|
19,174 | 39,805 | 40,367 | |||||||||
Total mortgage originations
|
34,171 | 57,784 | 55,294 | |||||||||
Commercial and industrial loans
|
41,029 | 47,492 | 84,300 | |||||||||
Consumer loans
|
1,550 | 1,299 | 1,624 | |||||||||
Total originations
|
76,750 | 106,575 | 141,218 | |||||||||
Purchase of one-to-four family mortgage loans
|
61,880 | 16,381 | 1,648 | |||||||||
138,630 | 122,956 | 142,866 | ||||||||||
Less:
|
||||||||||||
Principal repayments, unadvanced funds and other, net
|
96,846 | 121,809 | 82,212 | |||||||||
Loan charge-offs, net
|
9,634 | 5,051 | 383 | |||||||||
Total deductions
|
106,480 | 126,860 | 82,595 | |||||||||
Ending balance
|
$ | 508,584 | $ | 476,434 | $ | 480,338 |
At December 31,
|
||||||||||||||||||||
2010
|
2009
|
2008
|
2007
|
2006
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Nonaccrual real estate loans:
|
||||||||||||||||||||
Residential
|
$ | 629 | $ | 784 | $ | 905 | $ | 820 | $ | 803 | ||||||||||
Home equity
|
144 | 225 | 239 | 175 | 103 | |||||||||||||||
Commercial real estate
|
1,892 | 782 | 1,460 | 177 | 69 | |||||||||||||||
Total nonaccrual real estate loans
|
2,665 | 1,791 | 2,604 | 1,172 | 975 | |||||||||||||||
Other loans:
|
||||||||||||||||||||
Commercial and industrial
|
539 | 3,675 | 6,195 | 19 | 44 | |||||||||||||||
Consumer
|
- | 4 | 6 | 11 | 9 | |||||||||||||||
Total nonaccrual other loans
|
539 | 3,679 | 6,201 | 30 | 53 | |||||||||||||||
Total nonperforming loans
|
3,204 | 5,470 | 8,805 | 1,202 | 1,028 | |||||||||||||||
Foreclosed real estate, net
|
223 | 1,662 | - | - | - | |||||||||||||||
Total nonperforming assets
|
$ | 3,427 | $ | 7,132 | $ | 8,805 | $ | 1,202 | $ | 1,028 | ||||||||||
Nonperforming loans to total loans
|
0.63 | % | 1.15 | % | 1.83 | % | 0.29 | % | 0.26 | % | ||||||||||
Nonperforming assets to total assets
|
0.28 | 0.60 | 0.79 | 0.12 | 0.10 |
At or for Years Ended December 31,
|
||||||||||||||||||||
2010
|
2009
|
2008
|
2007
|
2006
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Balance at beginning of year
|
$ | 7,645 | $ | 8,796 | $ | 5,726 | $ | 5,437 | $ | 5,422 | ||||||||||
Charge-offs:
|
||||||||||||||||||||
Residential
|
(36 | ) | - | (131 | ) | - | - | |||||||||||||
Commercial real estate
|
(7,536 | ) | (50 | ) | - | - | - | |||||||||||||
Home equity loans
|
- | (117 | ) | - | - | - | ||||||||||||||
Commercial and industrial
|
(2,129 | ) | (4,910 | ) | (284 | ) | (255 | ) | (505 | ) | ||||||||||
Consumer
|
(16 | ) | (22 | ) | (34 | ) | (62 | ) | (79 | ) | ||||||||||
Total charge-offs
|
(9,717 | ) | (5,099 | ) | (449 | ) | (317 | ) | (584 | ) | ||||||||||
Recoveries:
|
||||||||||||||||||||
Residential
|
7 | - | - | - | 4 | |||||||||||||||
Commercial real estate
|
8 | - | - | - | - | |||||||||||||||
Home equity loans
|
4 | 6 | 4 | 3 | 3 | |||||||||||||||
Commercial and industrial
|
21 | 2 | 4 | 54 | 7 | |||||||||||||||
Consumer
|
43 | 40 | 58 | 149 | 195 | |||||||||||||||
Total recoveries
|
83 | 48 | 66 | 206 | 209 | |||||||||||||||
Net charge-offs
|
(9,634 | ) | (5,051 | ) | (383 | ) | (111 | ) | (375 | ) | ||||||||||
Provision for loan losses
|
8,923 | 3,900 | 3,453 | 400 | 390 | |||||||||||||||
Balance at end of year
|
$ | 6,934 | $ | 7,645 | $ | 8,796 | $ | 5,726 | $ | 5,437 | ||||||||||
Total loans receivable (1)
|
$ | 508,584 | $ | 476,434 | $ | 480,338 | $ | 420,067 | $ | 390,174 | ||||||||||
Average loans outstanding
|
$ | 482,215 | $ | 476,214 | $ | 444,492 | $ | 398,281 | $ | 386,039 | ||||||||||
Allowance for loan losses as a
|
||||||||||||||||||||
percent of total loans receivable
|
1.36 | % | 1.60 | % | 1.83 | % | 1.36 | % | 1.39 | % | ||||||||||
Net loans charged-off as a percent
|
||||||||||||||||||||
of average loans outstanding
|
2.00 | 1.06 | 0.09 | 0.03 | 0.10 | |||||||||||||||
_________________________
|
||||||||||||||||||||
(1) Does not include unearned premiums, deferred costs and fees, or allowance for loan losses.
|
December 31, 2010
|
December 31, 2009
|
December 31, 2008
|
||||||||||||||||||||||||||||||||||
Specific
|
General
|
Total
|
Specific
|
General
|
Total
|
Specific
|
General
|
Total
|
||||||||||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||||||||||||
Real estate mortgage:
|
||||||||||||||||||||||||||||||||||||
Residential and home equity
|
$ | - | $ | 877 | $ | 877 | $ | - | $ | 487 | $ | 487 | $ | - | $ | 462 | $ | 462 | ||||||||||||||||||
Commercial
|
- | 3,182 | 3,182 | - | 2,371 | 2,371 | - | 2,216 | 2,216 | |||||||||||||||||||||||||||
Commercial and industrial
|
19 | 2,830 | 2,849 | 875 | 3,873 | 4,748 | 2,286 | 3,776 | 6,062 | |||||||||||||||||||||||||||
Consumer
|
- | 26 | 26 | - | 39 | 39 | - | 56 | 56 | |||||||||||||||||||||||||||
Total
|
$ | 19 | $ | 6,915 | $ | 6,934 | $ | 875 | $ | 6,770 | $ | 7,645 | $ | 2,286 | $ | 6,510 | $ | 8,796 | ||||||||||||||||||
December 31, 2007
|
December 31, 2006
|
|||||||||||||||||||||||||||||||||||
Specific
|
General
|
Total
|
Specific
|
General
|
Total
|
|||||||||||||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||||||||||||
Real estate mortgage:
|
||||||||||||||||||||||||||||||||||||
Residential and home equity
|
$ | - | $ | 456 | $ | 456 | $ | - | $ | 422 | $ | 422 | ||||||||||||||||||||||||
Commercial
|
- | 1,756 | 1,756 | 13 | 2,004 | 2,017 | ||||||||||||||||||||||||||||||
Commercial and industrial
|
- | 3,436 | 3,436 | 7 | 2,912 | 2,919 | ||||||||||||||||||||||||||||||
Consumer
|
- | 78 | 78 | - | 79 | 79 | ||||||||||||||||||||||||||||||
Total
|
$ | - | $ | 5,726 | $ | 5,726 | $ | 20 | $ | 5,417 | $ | 5,437 |
December 31, 2010
|
December 31, 2009
|
December 31, 2008
|
||||||||||||||||||||||||||||||||||
Loan Category
|
Amount of
Loan Loss
|
Loan
Balances by
Category
|
Percent of
Loans in
Each
Category
to Total
Loans
|
Amount of
Loan Loss
|
Loan
Balances by
Category
|
Percent of
Loans in
Each Category
to Total Loans
|
Amount of
Loan Loss
|
Loan
Balances by
Category
|
Percent of
Loans in
Each
Category to Total
Loans
|
|||||||||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||||||||||||
Real estate mortgage:
|
||||||||||||||||||||||||||||||||||||
Commercial
|
$ | 3,182 | $ | 221,578 | 43.57 | % | $ | 2,371 | $ | 229,061 | 48.08 | % | $ | 2,216 | $ | 223,857 | 46.61 | % | ||||||||||||||||||
Residential and home equity
|
877 | 148,796 | 29.26 | 487 | 99,054 | 20.79 | 462 | 98,372 | 20.48 | |||||||||||||||||||||||||||
Commercial loans
|
2,849 | 135,250 | 26.59 | 4,748 | 145,012 | 30.44 | 6,062 | 153,861 | 32.03 | |||||||||||||||||||||||||||
Consumer loans
|
26 | 2,960 | 0.58 | 39 | 3,307 | 0.69 | 56 | 4,248 | 0.88 | |||||||||||||||||||||||||||
Total allowances for loan losses
|
$ | 6,934 | $ | 508,584 | 100.00 | % | $ | 7,645 | $ | 476,434 | 100.00 | % | $ | 8,796 | $ | 480,338 | 100.00 | % | ||||||||||||||||||
December 31, 2007
|
December 31, 2006
|
|||||||||||||||||||||||||||||||||||
Amount of
Loan Loss |
Loan
Balances by Category |
Percent of
Loans in Each Category to Total Loans |
Amount of
Loan Loss |
Loan
Balances by Category |
Percent of
Loans in Each Category to Total Loans |
|||||||||||||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||||||||||||
Real estate mortgage:
|
||||||||||||||||||||||||||||||||||||
Commercial
|
$ | 1,756 | $ | 189,964 | 45.22 | % | $ | 2,017 | $ | 174,556 | 44.74 | % | ||||||||||||||||||||||||
Residential and home equity
|
456 | 108,110 | 25.74 | 422 | 109,540 | 28.08 | ||||||||||||||||||||||||||||||
Commercial loans
|
3,436 | 116,514 | 27.74 | 2,919 | 100,237 | 25.69 | ||||||||||||||||||||||||||||||
Consumer loans
|
78 | 5,479 | 1.30 | 79 | 5,841 | 1.49 | ||||||||||||||||||||||||||||||
Total allowances for loan losses
|
$ | 5,726 | $ | 420,067 | 100.00 | % | $ | 5,437 | $ | 390,174 | 100.00 | % |
At December 31,
|
||||||||||||||||||||||||
2010
|
2009
|
2008
|
||||||||||||||||||||||
Amortized
|
Fair
|
Amortized
|
Fair
|
Amortized
|
Fair
|
|||||||||||||||||||
Cost
|
Value
|
Cost
|
Value
|
Cost
|
Value
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
Debt securities:
|
||||||||||||||||||||||||
Government-sponsored enterprises
|
$ | 18,447 | $ | 17,864 | $ | 45,884 | $ | 47,358 | $ | 60,924 | $ | 64,105 | ||||||||||||
Municipal bonds
|
42,119 | 43,077 | 36,316 | 37,774 | 36,354 | 36,655 | ||||||||||||||||||
Total debt securities
|
60,566 | 60,941 | 82,200 | 85,132 | 97,278 | 100,760 | ||||||||||||||||||
Mortgage-backed securities:
|
||||||||||||||||||||||||
Government sponsored residential mortgage-backed
|
381,436 | 380,984 | 494,324 | 500,659 | 315,903 | 318,158 | ||||||||||||||||||
U.S. government guaranteed residential mortgage-backed
|
192,609 | 187,676 | 17,364 | 17,333 | 48,293 | 47,977 | ||||||||||||||||||
Private label residential mortgage-backed
|
8,251 | 7,578 | 15,317 | 13,068 | 48,916 | 36,328 | ||||||||||||||||||
Total mortgage-backed securities
|
582,296 | 576,238 | 527,005 | 531,060 | 413,112 | 402,463 | ||||||||||||||||||
Marketable equity securities
|
||||||||||||||||||||||||
Mutual funds
|
6,949 | 6,913 | 6,561 | 6,489 | 6,231 | 6,088 | ||||||||||||||||||
Common and preferred stock
|
70 | 47 | 70 | 59 | 70 | 39 | ||||||||||||||||||
Total marketable equity securities
|
7,019 | 6,960 | 6,631 | 6,548 | 6,301 | 6,127 | ||||||||||||||||||
Total securities
|
$ | 649,881 | $ | 644,139 | $ | 615,836 | $ | 622,740 | $ | 516,691 | $ | 509,350 | ||||||||||||
At December 31, | ||||||||||||||||||||||||||||||||||||
2010 | 2009 | 2008 | ||||||||||||||||||||||||||||||||||
Amortized Cost |
Percent of Total |
Fair Value |
Amortized Cost |
Percent of Total |
Fair Value |
Amortized Cost |
Percent of Total |
Fair Value |
||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||||||
Available for sale:
|
||||||||||||||||||||||||||||||||||||
Government sponsored residential
|
$ | 381,436 | 65.50 | % | $ | 380,984 | $ | 289,840 | 55.00 | % | $ | 290,248 | $ | 161,926 | 39.20 | % | $ | 162,276 | ||||||||||||||||||
U.S. government guaranteed residential
|
192,609 | 33.08 | 187,676 | 1,030 | 0.19 | 1,047 | 40,401 | 9.78 | 40,424 | |||||||||||||||||||||||||||
Private label residential
|
8,251 | 1.42 | 7,578 | 10,368 | 1.97 | 8,510 | 42,453 | 10.28 | 31,047 | |||||||||||||||||||||||||||
Total available for sale
|
582,296 | 100.00 | 576,238 | 301,238 | 57.16 | 299,805 | 244,780 | 59.26 | 233,747 | |||||||||||||||||||||||||||
Held to maturity:
|
||||||||||||||||||||||||||||||||||||
Government sponsored residential
|
- | - | - | 204,484 | 38.80 | 210,411 | 153,977 | 37.27 | 155,882 | |||||||||||||||||||||||||||
U.S. government guaranteed residential
|
- | - | - | 16,334 | 3.10 | 16,286 | 7,892 | 1.91 | 7,553 | |||||||||||||||||||||||||||
Private label residential
|
- | - | - | 4,949 | 0.94 | 4,558 | 6,463 | 1.56 | 5,281 | |||||||||||||||||||||||||||
Total held to maturity
|
- | - | - | 225,767 | 42.84 | 231,255 | 168,332 | 40.74 | 168,716 | |||||||||||||||||||||||||||
Total mortgage-backed securities
|
$ | 582,296 | 100.00 | % | $ | 576,238 | $ | 527,005 | 100.00 | % | $ | 531,060 | $ | 413,112 | 100.00 | % | $ | 402,463 | ||||||||||||||||||
One Year or Less |
More than One Year
through Five Years
|
More than Five Years through Ten Years |
More than Ten Years | Total Securities | |||||||||||||||||||||||||||||||||||
Amortized Cost |
Weighted Average Yield |
Amortized Cost |
Weighted Average Yield |
Amortized Cost |
Weighted Average Yield |
Amortized Cost |
Weighted Average Yield |
Amortized Cost |
Fair Value |
Weighted Average Yield |
|||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||
Debt securities:
|
|||||||||||||||||||||||||||||||||||||||
Government-sponsored
enterprises
|
$ | - | - | % | $ | 8,497 | 2.02 | % | $ | - | - | % | $ | 9,950 | 3.24 | % | $ | 18,447 | $ | 17,864 | 2.68 | % | |||||||||||||||||
Municipal bonds
|
896 | 3.43 | 9,814 | 3.69 | 21,361 | 3.94 | 10,048 | 4.39 | 42,119 | 43,077 | 3.98 | ||||||||||||||||||||||||||||
Total debt
securities
|
896 | 3.43 | 18,311 | 2.92 | 21,361 | 3.94 | 19,998 | 3.82 | 60,566 | 60,941 | 3.59 | ||||||||||||||||||||||||||||
Mortgage-backed securities:
|
|||||||||||||||||||||||||||||||||||||||
Government sponsored
residential mortgage-
backed
|
3 | 5.00 | 981 | 4.11 | 17,476 | 3.28 | 362,976 | 3.10 | 381,436 | 380,984 | 3.11 | ||||||||||||||||||||||||||||
U.S. government
guaranteed residential
mortgage-backed
|
- | - | 74 | 1.95 | - | - | 192,535 | 2.92 | 192,609 | 187,676 | 2.92 | ||||||||||||||||||||||||||||
Private label residential
mortgage-backed
|
- | - | - | - | - | - | 8,251 | 5.73 | 8,251 | 7,578 | 5.73 | ||||||||||||||||||||||||||||
Total mortgage-
backed securities
|
3 | 5.00 | 1,055 | 3.96 | 17,476 | 3.28 | 563,762 | 3.07 | 582,296 | 576,238 | 3.08 | ||||||||||||||||||||||||||||
Total
|
$ | 899 | 3.44 | % | $ | 19,366 | 2.97 | % | $ | 38,837 | 3.64 | % | $ | 583,760 | 3.10 | % | $ | 642,862 | $ | 637,179 | 3.13 | % | |||||||||||||||||
At December, 31
|
||||||||||||||||||||||||||||||||||||
2010
|
2009
|
2008
|
||||||||||||||||||||||||||||||||||
Amount
|
Percent
|
Weighted
Average Rates |
Amount
|
Percent
|
Weighted
Average Rates |
Amount
|
Percent
|
Weighted
Average Rates |
||||||||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||||||||||
Demand deposits
|
$ | 85,217 | 12.17 | % | - | % | $ | 80,110 | 12.36 | % | - | % | $ | 50,860 | 8.65 | % | - | % | ||||||||||||||||||
Now accounts
|
83,621 | 11.94 | 1.08 | 70,462 | 10.87 | 1.42 | 83,788 | 14.25 | 1.17 | |||||||||||||||||||||||||||
Regular accounts
|
101,333 | 14.47 | 0.62 | 104,650 | 16.15 | 0.88 | 68,085 | 11.58 | 1.05 | |||||||||||||||||||||||||||
Money market accounts
|
76,184 | 10.88 | 0.57 | 50,120 | 7.74 | 0.74 | 57,655 | 9.80 | 0.94 | |||||||||||||||||||||||||||
Total non-certificate accounts
|
346,355 | 49.46 | 0.57 | 305,342 | 47.12 | 0.75 | 260,388 | 44.28 | 0.86 | |||||||||||||||||||||||||||
Time certificates of deposit:
|
||||||||||||||||||||||||||||||||||||
Due within the year
|
236,926 | 33.83 | 1.79 | 242,318 | 37.40 | 2.41 | 245,939 | 41.83 | 3.30 | |||||||||||||||||||||||||||
Over 1 year through 3 years
|
72,582 | 10.36 | 2.22 | 85,867 | 13.25 | 2.65 | 78,627 | 13.37 | 3.82 | |||||||||||||||||||||||||||
Over 3 years
|
44,472 | 6.35 | 2.62 | 14,448 | 2.23 | 2.02 | 3,075 | 0.52 | 3.43 | |||||||||||||||||||||||||||
Total certificate accounts
|
353,980 | 50.54 | 1.98 | 342,633 | 52.88 | 2.45 | 327,641 | 55.72 | 3.43 | |||||||||||||||||||||||||||
Total
|
$ | 700,335 | 100.00 | % | 1.28 | % | $ | 647,975 | 100.00 | % | 1.65 | % | $ | 588,029 | 100.00 | % | 2.29 | % |
Maturity Period
|
Amount
|
Weighted
Average Rate |
||||||
(In thousands)
|
||||||||
3 months or less
|
$ | 24,971 | 2.21 | % | ||||
Over 3 months through 6 months
|
18,187 | 1.80 | ||||||
Over 6 months through 12 months
|
31,929 | 1.55 | ||||||
Over 12 months
|
40,458 | 2.40 | ||||||
Total
|
$ | 115,545 | 2.03 | % |
At December 31, 2010
|
||||||||||||||||||||||||
Period to Maturity
|
||||||||||||||||||||||||
Less than
One Year |
One to
Two Years |
Two to
Three Years |
More than
Three Years |
Total
|
Percent of
Total |
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
2.00% and under
|
$ | 187,799 | $ | 16,659 | $ | 16,011 | $ | 8,853 | $ | 229,322 | 64.78 | % | ||||||||||||
2.01% to 3.00%
|
23,161 | 12,373 | 24,771 | 35,481 | 95,786 | 27.06 | ||||||||||||||||||
3.01% to 4.00%
|
18,895 | 2,001 | 45 | 138 | 21,079 | 5.96 | ||||||||||||||||||
4.01% to 5.00%
|
7,071 | 323 | 399 | - | 7,793 | 2.20 | ||||||||||||||||||
Total
|
$ | 236,926 | $ | 31,356 | $ | 41,226 | $ | 44,472 | $ | 353,980 | 100.00 | % |
|
(1)
|
a tangible capital ratio requirement of 2.0% of total assets as adjusted under OTS regulations;
|
|
(2)
|
a leverage ratio of 3% of core capital to such adjusted total assets, if a savings association has been assigned the highest composite rating of 1 under the Uniform Financial Institutions Rating System; otherwise, the minimum leverage capital ratio for any other depository institution that does not have a composite rating of 1 will be 4%, unless a higher leverage capital ratio is warranted by the particular circumstances or risk profile of the depository institution;
|
|
|
|
(3)
|
a Tier 1 risk-based capital ratio of 4.0%; and
|
|
(4)
|
a risk-based capital ratio requirement of 8% of core and supplementary capital to total risk-based assets, provided that the amount of supplementary capital used to satisfy this requirement may not exceed the amount of core capital.
|
|
●
|
a lending test, to evaluate the institution’s record of making loans in its assessment areas;
|
|
●
|
an investment test, to evaluate the institution’s record of investing in community development projects, affordable housing, and programs benefiting low or moderate income individuals and businesses in its assessment area or a broader area that includes its assessment area; and
|
|
●
|
a service test, to evaluate the institution’s delivery of services through its retail banking channels and the extent and innovativeness of its community development services.
|
RISK FACTORS
|
|
●
|
Commercial and Industrial Loans. Repayment is generally dependent upon the successful operation of the borrower's business.
|
|
●
|
Commercial Real Estate Loans. Repayment is dependent on income being generated in amounts sufficient to cover operating expenses and debt service.
|
|
●
|
Consumer Loans. Consumer loans are collateralized, if at all, with assets that may not provide an adequate source of payment of the loan due to depreciation, damage or loss.
|
UNRESOLVED STAFF COMMENTS
|
|
None.
|
Location
|
Ownership
|
Year Opened
|
Year of Lease
or License Expiration |
Main Office:
|
|||
141 Elm St.
|
Owned
|
1964
|
N/A
|
Westfield, MA
|
|||
Branch Offices:
|
|||
206 Park St.
|
Owned
|
1957
|
N/A
|
West Springfield, MA
|
|||
655 Main St.
|
Owned
|
1968
|
N/A
|
Agawam, MA
|
|||
26 Arnold St.
|
Owned
|
1976
|
N/A
|
Westfield, MA
|
|||
300 Southampton Rd.
|
Owned
|
1987
|
N/A
|
Westfield, MA
|
|||
462 College Highway
|
Owned
|
1990
|
N/A
|
Southwick, MA
|
|||
382 North Main St.
|
Leased
|
1997
|
2012
|
E. Longmeadow, MA
|
|||
1500 Main St.
|
Leased
|
2006
|
2016
|
Springfield, MA
|
|||
1642 Northampton St.
|
Owned
|
2001
|
N/A
|
Holyoke, MA
|
|||
560 East Main St.
|
Leased
|
2007
|
2046
|
Westfield, MA
|
|||
241 South Westfield St.
|
Leased
|
2009
|
2038
|
Feeding Hill, MA
|
ATMs:
|
|||
337 N. Westfield St.
|
Leased
|
1988
|
2013
|
Feeding Hills, MA
|
|||
516 Carew St.
|
Tenant at will
|
2002
|
N/A
|
Springfield, MA
|
|||
1000 State St.
|
Tenant at will
|
2003
|
N/A
|
Springfield, MA
|
|||
788 Memorial Ave.
|
Leased
|
2006
|
2016
|
West Springfield, MA
|
|||
2620 Westfield St.
|
Leased
|
2006
|
2020
|
West Springfield, MA
|
|||
98 Southwick Rd.
|
Leased
|
2006
|
2021
|
Westfield, MA
|
|||
115 West Silver St.
|
Tenant at will
|
2005
|
N/A
|
Westfield, MA
|
|||
1342 Liberty St.
|
Owned
|
2001
|
N/A
|
Springfield, MA
|
|||
98 Lower Westfield Rd.
|
Leased
|
2010
|
2020
|
Holyoke, MA
|
|||
Westfield State University
|
|||
577 Western Ave.
|
|||
Westfield, MA
|
|||
Woodward Center
|
Leased
|
2010
|
2015
|
Wilson Hall
|
Leased
|
2010
|
2015
|
Ely Hall
|
Leased
|
2010
|
2015
|
|
LEGAL PROCEEDINGS
|
|
[REMOVED AND RESERVED]
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
Price Per Share
|
Cash
Dividends Declared |
|||||||||||
2010
|
High ($)
|
Low ($)
|
($)
|
|||||||||
Fourth Quarter ended December 31, 2010
|
9.37 | 7.70 | 0.21 | * | ||||||||
Third Quarter ended September 30, 2010
|
8.84 | 7.33 | 0.06 | |||||||||
Second Quarter ended June 30, 2010
|
10.12 | 7.95 | 0.20 | * | ||||||||
First Quarter ended March 31, 2010
|
9.25 | 7.98 | 0.05 |
Price Per Share
|
Cash
Dividends Declared |
|||||||||||
2009
|
High ($)
|
Low ($)
|
($)
|
|||||||||
Fourth Quarter ended December 31, 2009
|
8.50 | 7.85 | 0.20 | * | ||||||||
Third Quarter ended September 30, 2009
|
9.82 | 8.43 | 0.05 | |||||||||
Second Quarter ended June 30, 2009
|
9.86 | 8.62 | 0.20 | * | ||||||||
First Quarter ended March 31, 2009
|
10.34 | 8.27 | 0.05 |
Period
|
Total Number
of Shares Purchased |
Average Price
Paid per Share ($) |
Total Number of
Shares
Purchased as
Part of Publicly
Announced
Programs |
Maximum Number
of Shares that May
Yet Be Purchased
Under the Program (1) |
||||||||||||
October 1 - 31, 2010
|
61,882 | (2) | 7.94 | 33,947 | 1,666,031 | |||||||||||
November 1 - 30, 2010
|
111,844 | 8.01 | 111,844 | 1,554,187 | ||||||||||||
December 1 - 31, 2010
|
1,671 | 8.25 | 1,671 | 1,552,516 | ||||||||||||
Total
|
175,397 | 7.99 | 147,462 | 1,552,516 | ||||||||||||
(1)
|
On May 25, 2010, the Board of Directors voted to authorize the commencement of a repurchase program, authorizing the repurchase of 2,924,367 shares, or ten percent of its outstanding shares of common stock.
|
(2)
|
In October 2010, we repurchased 27,935 shares from certain executives as repayment of their tax obligations for shares of restricted stock that vested on October 20, 2010 under our 2002 and 2007 Recognition and Retention Plans. These repurchases were reported by each reporting person on October 20, 2010.
|
Period Ending
|
||||||||||||||||||||||||
Index
|
12/31/05
|
12/31/06
|
12/31/07
|
12/31/08
|
12/31/09
|
12/31/10
|
||||||||||||||||||
Westfield Financial, Inc.
|
100.00 | 149.42 | 143.10 | 161.64 | 136.74 | 163.05 | ||||||||||||||||||
Russell 2000
|
100.00 | 118.37 | 116.51 | 77.15 | 98.11 | 124.46 | ||||||||||||||||||
NASDAQ Bank
|
100.00 | 113.82 | 91.16 | 71.52 | 59.87 | 68.34 |
At December 31,
|
||||||||||||||||||||
2010
|
2009
|
2008
|
2007
|
2006
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
Selected Financial Condition Data:
|
||||||||||||||||||||
Total assets
|
$ | 1,239,489 | $ | 1,191,410 | $ | 1,109,056 | $ | 1,039,784 | $ | 996,829 | ||||||||||
Loans, net (1)
|
502,392 | 469,149 | 472,135 | 414,902 | 385,184 | |||||||||||||||
Securities available for sale
|
644,139 | 319,121 | 258,143 | 244,229 | 168,629 | |||||||||||||||
Securities held to maturity (2)
|
- | 295,011 | 247,635 | 278,619 | 240,392 | |||||||||||||||
Deposits
|
700,335 | 647,975 | 588,029 | 602,676 | 627,466 | |||||||||||||||
Short-term borrowings
|
62,937 | 74,499 | 49,824 | 32,268 | 17,919 | |||||||||||||||
Long-term debt
|
238,151 | 213,845 | 173,300 | 105,000 | 55,000 | |||||||||||||||
Total stockholders’ equity
|
221,245 | 247,299 | 259,919 | 286,532 | 289,408 | |||||||||||||||
Allowance for loan losses
|
6,934 | 7,645 | 8,796 | 5,726 | 5,437 | |||||||||||||||
Nonperforming loans
|
3,204 | 5,470 | 8,805 | 1,202 | 1,028 | |||||||||||||||
For the Years Ended December 31,
|
||||||||||||||||||||
2010
|
2009
|
2008
|
2007
|
2006
|
||||||||||||||||
(In thousands, except per share data)
|
||||||||||||||||||||
Selected Operating Data:
|
||||||||||||||||||||
Interest and dividend income
|
$ | 46,147 | $ | 52,530 | $ | 54,056 | $ | 53,584 | $ | 42,435 | ||||||||||
Interest expense
|
16,765 | 20,022 | 22,304 | 23,408 | 19,551 | |||||||||||||||
Net interest and dividend income
|
29,382 | 32,508 | 31,752 | 30,176 | 22,884 | |||||||||||||||
Provision for loan losses
|
8,923 | 3,900 | 3,453 | 400 | 390 | |||||||||||||||
Net interest and dividend income after
provision for loan losses
|
20,459 | 28,608 | 28,299 | 29,776 | 22,494 | |||||||||||||||
Total noninterest income
|
7,390 | 3,218 | 3,579 | 4,609 | 3,123 | |||||||||||||||
Total noninterest expense
|
24,809 | 25,100 | 23,392 | 21,873 | 19,440 | |||||||||||||||
Income before income taxes
|
3,040 | 6,726 | 8,486 | 12,512 | 6,177 | |||||||||||||||
Income taxes
|
34 | 1,267 | 1,795 | 3,812 | 1,523 | |||||||||||||||
Net income
|
$ | 3,006 | $ | 5,459 | $ | 6,691 | $ | 8,700 | $ | 4,654 | ||||||||||
Basic earnings per share (3)
|
$ | 0.11 | $ | 0.19 | $ | 0.22 | $ | 0.29 | $ | 0.15 | ||||||||||
Diluted earnings per share (3)
|
$ | 0.11 | $ | 0.18 | $ | 0.22 | $ | 0.28 | $ | 0.15 | ||||||||||
Dividends per share paid (3)
|
$ | 0.52 | $ | 0.50 | $ | 0.60 | $ | 0.40 | $ | 0.32 |
_________________________________
|
|||||||||
(1) Loans are shown net of deferred loan costs, allowance for loan losses and unadvanced loan funds.
|
|||||||||
(2) In August 2010, we transferred all of our held-to-maturity securities to the available-for-sale category. We determined that we no longer had the positive intent to hold our securities classified as held-to-maturity for an indefinite period of time because of our desire to have more flexibility in managing the investment portfolio. The securities transferred had a total amortized cost of $287.1 million, fair value of $299.7 million and a net unrealized gain of $12.6 million, which was recorded as other comprehensive income at the time of transfer.
|
|||||||||
(3) Per share amounts related to periods prior to the date of completion of the conversion (January 3, 2007) have been restated to give retroactive recognition to the exchange ratio applied in the conversion.
|
At or for the Years Ended December 31,
|
||||||||||||||||||||
2010
|
2009
|
2008
|
2007
|
2006
|
||||||||||||||||
Selected Financial Ratios and
|
||||||||||||||||||||
Other Data(1)
|
||||||||||||||||||||
Performance Ratios:
|
||||||||||||||||||||
Return on average assets
|
0.25 | % | 0.47 | % | 0.63 | % | 0.86 | % | 0.56 | % | ||||||||||
Return on average equity
|
1.25 | 2.12 | 2.43 | 3.00 | 3.99 | |||||||||||||||
Average equity to average assets
|
19.63 | 22.16 | 25.75 | 28.74 | 14.08 | |||||||||||||||
Equity to total assets at end of year
|
17.85 | 20.76 | 23.44 | 27.56 | 29.03 | |||||||||||||||
Average interest rate spread
|
2.22 | 2.41 | 2.44 | 2.23 | 2.61 | |||||||||||||||
Net interest margin (2)
|
2.64 | 3.04 | 3.23 | 3.25 | 3.05 | |||||||||||||||
Average interest-earning assets to average
interest-earning liabilities
|
128.51 | 134.62 | 135.36 | 141.05 | 117.37 | |||||||||||||||
Total noninterest expense to average assets
|
2.03 | 2.16 | 2.18 | 2.16 | 2.34 | |||||||||||||||
Efficiency ratio (3)
|
75.53 | 68.49 | 65.83 | 64.55 | 73.68 | |||||||||||||||
Dividend payout ratio
|
4.73 | 2.63 | 2.73 | 1.38 | 2.13 | |||||||||||||||
Regulatory Capital Ratios:
|
||||||||||||||||||||
Total risk-based capital
|
34.05 | 38.07 | 42.56 | 50.29 | 29.07 | |||||||||||||||
Tier 1 risk-based capital
|
33.03 | 36.94 | 41.31 | 49.30 | 54.38 | |||||||||||||||
Tier 1 leverage capital
|
18.07 | 20.92 | 23.97 | 27.48 | 55.39 | |||||||||||||||
Asset Quality Ratios:
|
||||||||||||||||||||
Nonperforming loans to total loans
|
0.63 | 1.15 | 1.83 | 0.29 | 0.26 | |||||||||||||||
Nonperforming assets to total assets
|
0.28 | 0.60 | 0.79 | 0.12 | 0.10 | |||||||||||||||
Allowance for loan losses to total loans
|
1.36 | 1.60 | 1.83 | 1.36 | 1.39 | |||||||||||||||
Allowance for loan losses to nonperforming assets
|
202 | 107 | 100 | 476 | 529 | |||||||||||||||
Number of:
|
||||||||||||||||||||
Banking offices
|
11 | 11 | 11 | 11 | 10 | |||||||||||||||
Full-time equivalent employees
|
180 | 168 | 180 | 177 | 155 | |||||||||||||||
_________________________________
|
||||||||||||||||||||
(1) Asset quality ratios and regulatory capital ratios are end of period ratios.
|
||||||||||||||||||||
(2) Net interest margin represents tax-equivalent net interest and dividend income as a percentage of average interest earning assets.
|
||||||||||||||||||||
(3) The efficiency ratio represents the ratio of operating expenses divided by the sum of net interest and dividend income and noninterest income less gain on sale and losses on other than temporary impairment of securities and sale of premises and equipment.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
●
|
grow our commercial and industrial and commercial real estate loan portfolio by targeting businesses in our primary market area and in northern Connecticut as a means to increase the yield on and diversify our loan portfolio and build transactional deposit account relationships;
|
|
●
|
focus on expanding our retail banking franchise and increase the number of households served within our market area; and
|
|
●
|
to supplement the commercial focus, grow the residential loan portfolio to diversify risk and deepen customer relationships. We will maintain our arrangement with a third-party mortgage company which assists in originating and servicing residential real estate loans. By doing this, we reduce the overhead costs associated with these loans.
|
|
●
|
Net income was $3.0 million, or $0.11 per diluted share, for the year ended December 31, 2010, compared to $5.5 million, or $0.18 per diluted share for the same period in 2009. The results for the year ended December 31, 2010 showed an increase in the provision for loan losses and a decrease in net interest income; however, this was offset by an increase in noninterest income and a decrease in noninterest expense and the provision for income taxes.
|
|
●
|
We provided $8.9 million for loan losses for the year ended December 31, 2010, compared to $3.9 million for the same period in 2009. This was the result of an increase in net loan charge-offs due to a $7.2 million charge-off on a single commercial real estate loan relationship. The allowance was $6.9 million, or 1.36% of total loans at December 31, 2010 and $7.6 million, or 1.60% of total loans at December 31, 2009. In 2010, total loans increased $32.5 million, with the increase primarily in residential real estate loans which contain less credit risk and market risk than both commercial real estate and commercial and industrial loans.
|
|
●
|
Net interest and dividend income decreased $3.1 million to $29.4 million for the year ended December 31, 2010, compared to $32.5 million for the same period in 2009. The net interest margin, on a tax-equivalent basis, was 2.64% for the year ended December 31, 2010, compared to 3.04% for the same period in 2009. The margin decreased because the yield on interest-earning assets decreased more than the cost of interest-bearing liabilities. The decrease in interest rates during 2010 caused an increase in prepayments on loans and investments and the funds were reinvested in a lower rate environment, thus reducing yields.
|
|
●
|
Noninterest income increased $4.2 million to $7.4 million for the year ended December 31, 2010, compared to $3.2 million for the same period in 2009. The increase was primarily the result of an increase in net gains on the sale of securities of $4.5 million for the year ended December 31, 2010.
|
|
●
|
Nonperforming loans decreased $2.3 million to $3.2 million at December 31, 2010, compared to $5.5 million at December 31, 2009. This represented 0.63% of total loans at December 31, 2010 and 1.15% of total loans at December 31, 2009. At December 31, 2010, nonperforming loans were primarily made up of three commercial relationships totaling $2.4 million.
|
For the Years Ended December 31, | ||||||||||||||||||||||||||||||
2010 | 2009 | 2008 | ||||||||||||||||||||||||||||
Average
Balance
|
Interest
|
Avg Yield/
Cost
|
Average
Balance |
Interest
|
Avg Yield/
Cost
|
Average
Balance
|
Interest
|
Avg Yield/
Cost
|
||||||||||||||||||||||
ASSETS:
|
||||||||||||||||||||||||||||||
Interest-earning assets
|
||||||||||||||||||||||||||||||
Loans(1)(2)
|
$ | 482,215 | $ | 24,887 | 5.16 | % | $ | 476,214 | $ | 25,834 | 5.42 | % | $ | 444,492 | $ | 27,280 | 6.14 | % | ||||||||||||
Securities(2)
|
647,462 | 22,079 | 3.41 | 597,811 | 27,286 | 4.56 | 521,767 | 26,752 | 5.13 | |||||||||||||||||||||
Short-term investments(3)
|
13,948 | 8 | 0.06 | 15,051 | 11 | 0.07 | 33,674 | 594 | 1.76 | |||||||||||||||||||||
Total interest-earning assets
|
1,143,625 | 46,974 | 4.11 | 1,089,076 | 53,131 | 4.88 | 999,933 | 54,626 | 5.46 | |||||||||||||||||||||
Total noninterest-earning assets
|
78,811 | 72,267 | 68,831 | |||||||||||||||||||||||||||
Total assets
|
$ | 1,222,436 | $ | 1,161,343 | $ | 1,068,764 | ||||||||||||||||||||||||
LIABILITIES AND EQUITY:
|
||||||||||||||||||||||||||||||
Interest-bearing liabilities
|
||||||||||||||||||||||||||||||
NOW accounts
|
$ | 76,954 | 933 | 1.21 | $ | 68,967 | 1,238 | 1.80 | $ | 85,558 | 1,205 | 1.41 | ||||||||||||||||||
Savings accounts
|
112,546 | 824 | 0.73 | 89,185 | 955 | 1.07 | 60,515 | 748 | 1.24 | |||||||||||||||||||||
Money market accounts
|
56,082 | 358 | 0.64 | 53,100 | 467 | 0.88 | 67,017 | 763 | 1.14 | |||||||||||||||||||||
Time certificates of deposit
|
347,590 | 7,735 | 2.23 | 337,692 | 10,034 | 2.97 | 330,892 | 12,417 | 3.75 | |||||||||||||||||||||
Total interest-bearing deposits
|
593,172 | 9,850 | 548,944 | 12,694 | 543,982 | 15,133 | ||||||||||||||||||||||||
Short-term borrowings and long-term debt
|
296,752 | 6,915 | 2.33 | 260,083 | 7,328 | 2.82 | 194,750 | 7,171 | 3.68 | |||||||||||||||||||||
Interest-bearing liabilities
|
889,924 | 16,765 | 1.88 | 809,027 | 20,022 | 2.47 | 738,732 | 22,304 | 3.02 | |||||||||||||||||||||
Noninterest-bearing deposits
|
83,077 | 80,186 | 45,009 | |||||||||||||||||||||||||||
Other noninterest-bearing liabilities
|
9,513 | 14,789 | 9,828 | |||||||||||||||||||||||||||
Total noninterest-bearing liabilities
|
92,590 | 94,975 | 54,837 | |||||||||||||||||||||||||||
Total liabilities
|
982,514 | 904,002 | 793,569 | |||||||||||||||||||||||||||
Total equity
|
239,922 | 257,341 | 275,195 | |||||||||||||||||||||||||||
Total liabilities and equity
|
$ | 1,222,436 | $ | 1,161,343 $ | $ | 1,068,764 | ||||||||||||||||||||||||
Less: Tax-equivalent adjustment(2)
|
(827 | ) | (601 | ) | (570 | ) | ||||||||||||||||||||||||
Net interest and dividend income
|
$ | 29,382 | $ | 32,508 | $ | 31,752 | ||||||||||||||||||||||||
Net interest rate spread(4)
|
2.22 | % | 2.41 | % | 2.44 | % | ||||||||||||||||||||||||
Net interest margin(5)
|
2.64 | % | 3.04 | % | 3.23 | % | ||||||||||||||||||||||||
Ratio of average interest-earning
assets to average interest-bearing liabilities
|
128.5 | 134.6 | 135.4 | |||||||||||||||||||||||||||
____________________________________________
|
||
(1)
|
Loans, including non-accrual loans, are net of deferred loan origination costs, and unadvanced funds.
|
|
(2)
|
Securities income, loan income and net interest income are presented on a tax-equivalent basis using a tax rate of 34%. The tax-equivalent adjustment is deducted from tax-equivalent net interest and dividend income to agree to the amount reported in the statements of income.
|
|
(3)
|
Short-term investments include federal funds sold.
|
|
(4)
|
Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.
|
|
(5)
|
Net interest margin represents tax-equivalent net interest and dividend income as a percentage of average interest-earning-assets.
|
Year Ended December 31, 2010 Compared to Year
Ended December 31, 2009
|
Year Ended December 31, 2009 Compared to Year
Ended December 31, 2008
|
|||||||||||||||||||||||
Increase (Decrease) Due to
|
Increase (Decrease) Due to
|
|||||||||||||||||||||||
Volume
|
Rate
|
Net
|
Volume
|
Rate
|
Net
|
|||||||||||||||||||
Interest-earning assets
|
(In thousands)
|
|||||||||||||||||||||||
Loans (1)
|
$ | 326 | $ | (1,273 | ) | $ | (947 | ) | $ | 1,947 | $ | (3,393 | ) | $ | (1,446 | ) | ||||||||
Securities (1)
|
2,266 | (7,473 | ) | (5,207 | ) | 3,899 | (3,365 | ) | 534 | |||||||||||||||
Short-term investments
|
(1 | ) | (2 | ) | (3 | ) | (329 | ) | (254 | ) | (583 | ) | ||||||||||||
Total interest-earning assets
|
2,591 | (8,748 | ) | (6,157 | ) | 5,517 | (7,012 | ) | (1,495 | ) | ||||||||||||||
Interest-bearing liabilities
|
||||||||||||||||||||||||
NOW accounts
|
143 | (448 | ) | (305 | ) | (234 | ) | 267 | 33 | |||||||||||||||
Savings accounts
|
250 | (381 | ) | (131 | ) | 354 | (147 | ) | 207 | |||||||||||||||
Money market accounts
|
26 | (135 | ) | (109 | ) | (158 | ) | (138 | ) | (296 | ) | |||||||||||||
Time deposits
|
294 | (2,593 | ) | (2,299 | ) | 255 | (2,638 | ) | (2,383 | ) | ||||||||||||||
Short-term borrowing and long-time debt
|
1,033 | (1,446 | ) | (413 | ) | 2,406 | (2,249 | ) | 157 | |||||||||||||||
Total interest-bearing liabilities
|
1,746 | (5,003 | ) | (3,257 | ) | 2,623 | (4,905 | ) | (2,282 | ) | ||||||||||||||
Change in net interest and dividend income
|
$ | 845 | $ | (3,745 | ) | $ | (2,900 | ) | $ | 2,894 | $ | (2,107 | ) | $ | 787 |
(1) | Securities and loan income and net interest income are presented on a tax-equivalent basis using a tax rate of 34%. The tax-equivalent adjustment is deducted from tax-equivalent net interest income to agree to the amount reported in the statements of income. | |
|
Within 1
Year
|
After 1
Year
But Within
3 Years
|
After 3
Year
But Within
5 Years
|
After 5
Years
|
Total
|
|||||||||||||||
Lease Obligations
|
||||||||||||||||||||
Operating lease obligations
|
$ | 565 | $ | 939 | $ | 898 | $ | 10,137 | $ | 12,539 | ||||||||||
Borrowings and Debt
|
||||||||||||||||||||
Federal Home Loan Bank
|
55,751 | 66,254 | 66,224 | 14,000 | 202,229 | |||||||||||||||
Securities sold under agreements to repurchase
|
17,559 | 14,800 | 28,000 | 38,500 | 98,859 | |||||||||||||||
Total borrowings and debt
|
73,310 | 81,054 | 94,224 | 52,500 | 301,088 | |||||||||||||||
Credit Commitments
|
||||||||||||||||||||
Available lines of credit
|
60,305 | - | - | 20,073 | 80,378 | |||||||||||||||
Other loan commitments
|
6,804 | - | 50 | - | 6,854 | |||||||||||||||
Letters of credit
|
2,527 | - | - | 505 | 3,032 | |||||||||||||||
Total credit commitments
|
69,636 | - | 50 | 20,578 | 90,264 | |||||||||||||||
Total
|
$ | 143,511 | $ | 81,993 | $ | 95,172 | $ | 83,215 | $ | 403,891 |
|
●
|
maintaining the diversity of our existing loan portfolio through the origination of commercial loans and commercial real estate loans which typically have variable rates and shorter terms than residential mortgages; and
|
|
●
|
emphasizing investments with an expected average duration of five years or less.
|
For the Year Ending December 31, 2011
|
||||||||
Changes in
Interest Rates
(Basis Points)
|
Net Interest and
Dividend
Income
|
% Change
|
||||||
(Dollars in thousands)
|
||||||||
400 | 33,600 | 4.5 | % | |||||
300 | 33,369 | 3.8 | % | |||||
200 | 33,087 | 2.9 | % | |||||
100 | 32,896 | 2.3 | % | |||||
0 | 32,143 | 0.0 | % | |||||
-100 | 31,838 | -0.9 | % | |||||
-200 | 29,567 | -8.0 | % |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
|
None.
|
CONTROLS AND PROCEDURES
|
|
●
|
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control system is a process designed to provide reasonable assurance to our management and board of directors regarding the preparation and fair presentation of published financial statements.
|
|
●
|
Our internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets; provide reasonable assurances that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures are being made only in accordance with authorizations of management and the directors; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.
|
|
●
|
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
|
|
●
|
Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2010. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework. Based on our assessment we believe that, as of December 31, 2010, our internal control over financial reporting is effective based on those criteria.
|
|
None.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
ITEM 11. | EXECUTIVE COMPENSATION |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
(a)(1)
|
Financial Statements
Reference is made to the Consolidated Financial Statements included in Item 8 of Part II hereof.
|
(a)(2)
|
Financial Statement Schedules
Consolidated financial statement schedules have been omitted because the required information is not present, or not present in amounts sufficient to require submission of the schedules, or because the required information is provided in the consolidated financial statements or notes thereto.
|
(a)(3)
|
Exhibits
The exhibits required to be filed as part of this Annual Report on Form 10-K are listed in the Exhibit Index attached hereto and are incorporated herein by reference.
|
Westfield Financial, Inc. | ||
By:
|
/s/ James C. Hagan
|
|
James C. Hagan
|
||
Chief Executive Officer and President
|
||
(Principal Executive Officer)
|
||
By:
|
/s/ Leo R. Sagan, Jr.
|
|
Leo R. Sagan, Jr.
|
||
Chief Financial Officer and Treasurer
|
||
(Principal Financial Officer and Principal Accounting Officer)
|
Name
|
Title
|
Date | ||
/s/ James C. Hagan
|
Chief Executive Officer, President and Director
|
March 11, 2011
|
||
James C. Hagan
|
(Principal Executive Officer)
|
|||
/s/ Donald A. Williams
|
Chairman of the Board
|
March 11, 2011
|
||
Donald A. Williams
|
||||
/s/ Victor J. Carra
|
Director
|
March 11, 2011
|
||
Victor J. Carra
|
||||
/s/ David C. Colton, Jr.
|
Director
|
March 11, 2011
|
||
David C. Colton, Jr.
|
||||
/s/ Robert T. Crowley, Jr.
|
Director
|
March 11, 2011
|
||
Robert T. Crowley, Jr.
|
||||
/s/ Harry C. Lane
|
Director
|
March 11, 2011
|
||
Harry C. Lane
|
||||
/s/ Richard C. Placek
|
Director
|
March 11, 2011
|
||
Richard C. Placek
|
||||
/s/ Paul R. Pohl
|
Director
|
March 11, 2011
|
||
Paul R. Pohl
|
||||
/s/ Philip R. Smith
|
Director
|
March 11, 2011
|
||
Philip R. Smith
|
||||
/s/ Charles E. Sullivan
|
Director
|
March 11, 2011
|
||
Charles E. Sullivan
|
||||
2.1
|
Amended and Restated Plan of Conversion and Stock Issuance of Westfield Mutual Holding Company, Westfield Financial, Inc. and Westfield Bank (incorporated by reference to Exhibit 2.1 of the Registration Statement No. 333-137024 on Form S-1 filed with the Securities and Exchange Commission on August 31, 2006).
|
|
3.1
|
Articles of Organization of Westfield Financial, Inc. (incorporated by reference to Exhibit 3.3 of the Form 8-K filed with the Securities and Exchange Commission on January 5, 2007).
|
|
3.2†
|
Amended and Restated Bylaws of Westfield Financial, Inc.
|
|
4.1
|
Form of Stock Certificate of Westfield Financial, Inc. (incorporated by reference to Exhibit 4.1 of the Registration Statement No. 333-137024 on Form S-1 filed with the Securities and Exchange Commission on August 31, 2006).
|
|
10.1*
|
Form of Employee Stock Ownership Plan of Westfield Financial, Inc. (incorporated by reference to Exhibit 10.1 of the Registration Statement No. 333-68550 on Form S-1 filed with the Securities and Exchange Commission on August 28, 2001).
|
|
10.2*
|
Amendment to the Employee Stock Ownership Plan of Westfield Financial, Inc. (incorporated by reference to Exhibit 10.9 of the Annual Report on Form 10-K for the year ended December 31, 2002 filed with the Securities and Exchange Commission on March 31, 2003).
|
|
10.3*
|
Amendment No. 1 to the Employee Stock Ownership Plan of Westfield Financial, Inc. (incorporated by reference to Exhibit 10.9 of the Annual Report on Form 10-K for the year ended December 31, 2003 filed with the Securities and Exchange Commission on March 15, 2004).
|
|
10.4*
|
Amendment No. 3 (incorporating Amendment Nos. 1 and 2) to the Employee Stock Ownership Plan of Westfield Financial, Inc. (incorporated by reference to Exhibit 10.10 of the Form 8-K filed with the Securities and Exchange Commission on August 25, 2005).
|
|
10.5* | Amendment No. 4 to the Employee Stock Ownership Plan of Westfield Financial, Inc. (incorporated by reference to Exhibit 10.3 of the Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 15, 2010). | |
10.6† | Amendment No. 5 to the Employee Stock Ownership Plan of Westfield Financial, Inc. | |
10.7*
|
Form of Director’s Deferred Compensation Plan (incorporated by reference to Exhibit 10.7 of the Form 8-K filed with the Securities and Exchange Commission on December 22, 2005).
|
|
10.8*
|
The 401(k) Plan adopted by Westfield Bank (incorporated herein by reference to Exhibit 4.1 of the Post-Effective Amendment No. 1 to the Registration Statement No. 333-73132 on Form S-8 filed with the Securities and Exchange Commission on April 28, 2006).
|
|
10.9*
|
Amendment to the 401(k) Plan adopted by Westfield Bank (incorporated by reference to Exhibit 10.11 of the Form 8-K filed with the Securities and Exchange Commission on July 13, 2006).
|
|
10.10
|
* |
Amended and Restated Benefit Restoration Plan of Westfield Financial, Inc. (incorporated by reference to Exhibit 10.2 of the Form 8-K filed with the Securities and Exchange Commission on October 25, 2007).
|
10.11
|
* |
Form of Amended and Restated Deferred Compensation Agreement with Donald A. Williams (incorporated by reference to Exhibit 10.10 of the Form 8-K filed with the Securities and Exchange Commission on December 22, 2005).
|
10.12
|
* |
Amended and Restated Employment Agreement between James C. Hagan and Westfield Bank (incorporated by reference to Exhibit 10.9 of the Form 8-K filed with the Securities and Exchange Commission on January 5, 2009).
|
10.13
|
* |
Amended and Restated Employment Agreement between James C. Hagan and Westfield Financial, Inc. (incorporated by reference to Exhibit 10.12 of the Form 8-K filed with the Securities and Exchange Commission on January 5, 2009).
|
10.14
|
* |
Agreement between Westfield Bank and Village Mortgage Company (incorporated by reference to Exhibit 10.17 of Amendment No. 1 of the Registration Statement No. 333-137024 on Form S-1 filed with the Securities and Exchange Commission on August 31, 2006).
|
10.15
|
* |
Employment Agreement between Leo R. Sagan, Jr. and Westfield Bank (incorporated by reference to Exhibit 10.15 of the Form 8-K filed with the Securities and Exchange Commission on January 5, 2009).
|
10.16
|
* |
Employment Agreement between Leo R. Sagan, Jr. and Westfield Financial, Inc (incorporated by reference to Exhibit 10.16 of the Form 8-K filed with the Securities and Exchange Commission on January 5, 2009).
|
10.17
|
* |
Employment Agreement between Gerald P. Ciejka and Westfield Bank (incorporated by reference to Exhibit 10.17 of the Form 8-K filed with the Securities and Exchange Commission on January 5, 2009).
|
10.18
|
* |
Employment Agreement between Gerald P. Ciejka and Westfield Financial, Inc. (incorporated by reference to Exhibit 10.18 of the Form 8-K filed with the Securities and Exchange Commission on January 5, 2009).
|
10.19
|
* |
Employment Agreement between Allen J. Miles, III and Westfield Bank (incorporated by reference to Exhibit 10.19 of the Form 8-K filed with the Securities and Exchange Commission on January 5, 2009).
|
10.20
|
* |
Employment Agreement between Allen J. Miles, III and Westfield Financial, Inc. (incorporated by reference to Exhibit 10.20 of the Form 8-K filed with the Securities and Exchange Commission on January 5, 2009).
|
10.21
|
* |
2002 Stock Option Plan (incorporated by reference to Appendix B of the Schedule 14A filed with the Securities and Exchange Commission on May 24, 2002).
|
10.22
|
* |
Amendment to the 2002 Stock Option Plan (incorporated by reference to Appendix A of the Schedule 14A filed with the Securities and Exchange Commission on April 25, 2003).
|
10.23
|
* |
2002 Recognition and Retention Plan (incorporated by reference to Appendix C of the Schedule 14A filed with the Securities and Exchange Commission on May 24, 2002).
|
10.24
|
* |
Amendment to the 2002 Recognition and Retention Plan (incorporated by reference to Appendix B of the Schedule 14A filed with the Securities and Exchange Commission on April 25, 2003).
|
10.25
|
* |
2007 Stock Option Plan (incorporated by reference to Appendix A of the Schedule 14A filed with the Securities and Exchange Commission on June 18, 2007).
|
10.26
|
* |
Amendment to the 2007 Stock Option Plan (incorporated by reference to Appendix B of the Schedule 14A filed with the Securities and Exchange Commission on April 14, 2008).
|
10.27
|
* |
2007 Recognition and Retention Plan (incorporated by reference to Appendix B of the Schedule 14A filed with the Securities and Exchange Commission on June 18, 2007).
|
10.28
|
* |
Amendment to the 2007 Recognition and Retention Plan (incorporated by reference to Appendix C of the Schedule 14A filed with the Securities and Exchange Commission on April 14, 2008).
|
21.1†
|
Subsidiaries of Westfield Financial
|
|
23.1†
|
Consent of Wolf & Company, P.C.
|
|
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
|
|
32.1†
|
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
32.2†
|
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
WESTFIELD FINANCIAL, INC., AND SUBSIDIARIES
|
||||||||
CONSOLIDATED BALANCE SHEETS
|
||||||||
(Dollars in thousands, except share data)
|
||||||||
December 31,
|
||||||||
2010
|
2009
|
|||||||
ASSETS
|
||||||||
Cash and due from banks
|
$ | 9,247 | $ | 12,204 | ||||
Federal funds sold
|
13 | 2 | ||||||
Interest-bearing deposits and other short-term investments
|
2,351 | 16,513 | ||||||
Cash and cash equivalents
|
11,611 | 28,719 | ||||||
SECURITIES :
|
||||||||
Available for sale - at fair value
|
644,139 | 319,121 | ||||||
Held to maturity - at amortized cost (fair value of $303,619)
|
- | 295,011 | ||||||
FEDERAL HOME LOAN BANK OF BOSTON AND OTHER RESTRICTED STOCK - AT COST
|
12,251 | 10,339 | ||||||
LOANS - Net of allowance for loan losses of $6,934 at December 31, 2010 and $7,645 at December 31, 2009
|
502,392 | 469,149 | ||||||
PREMISES AND EQUIPMENT, Net
|
11,603 | 12,202 | ||||||
ACCRUED INTEREST RECEIVABLE
|
4,279 | 5,198 | ||||||
BANK-OWNED LIFE INSURANCE
|
40,494 | 38,970 | ||||||
DEFERRED TAX ASSET, Net
|
8,811 | 6,995 | ||||||
OTHER REAL ESTATE OWNED
|
223 | 1,662 | ||||||
OTHER ASSETS
|
3,686 | 4,044 | ||||||
TOTAL ASSETS
|
$ | 1,239,489 | $ | 1,191,410 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||
LIABILITIES:
|
||||||||
DEPOSITS :
|
||||||||
Noninterest-bearing
|
$ | 85,217 | $ | 80,110 | ||||
Interest-bearing
|
615,118 | 567,865 | ||||||
Total deposits
|
700,335 | 647,975 | ||||||
SHORT-TERM BORROWINGS
|
62,937 | 74,499 | ||||||
LONG-TERM DEBT
|
238,151 | 213,845 | ||||||
SECURITIES PENDING SETTLEMENT
|
7,791 | - | ||||||
OTHER LIABILITIES
|
9,030 | 7,792 | ||||||
TOTAL LIABILITIES
|
1,018,244 | 944,111 | ||||||
COMMITMENTS AND CONTINGENCIES (Note 13)
|
||||||||
SHAREHOLDERS' EQUITY:
|
||||||||
Preferred stock - $.01 par value, 5,000,000 shares authorized, none outstanding at
December 31, 2010 and December 31, 2009
|
- | - | ||||||
Common stock - $.01 par value, 75,000,000 shares authorized, 28,166,419 shares issued
and outstanding at December 31, 2010; 29,818,526 shares issued and outstanding at
December 31, 2009
|
282 | 298 | ||||||
Additional paid-in capital
|
181,842 | 193,609 | ||||||
Unearned compensation - ESOP
|
(9,701 | ) | (10,299 | ) | ||||
Unearned compensation - Equity Incentive Plan
|
(2,158 | ) | (3,248 | ) | ||||
Retained earnings
|
56,496 | 69,253 | ||||||
Accumulated other comprehensive loss
|
(5,516 | ) | (2,314 | ) | ||||
Total shareholders' equity
|
221,245 | 247,299 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
|
$ | 1,239,489 | $ | 1,191,410 | ||||
See accompanying notes to consolidated financial statements.
|
WESTFIELD FINANCIAL, INC. AND SUBSIDIARIES
|
||||||||||||
CONSOLIDATED STATEMENTS OF INCOME
|
||||||||||||
(Dollars in thousands, except share data)
|
||||||||||||
Years Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
INTEREST AND DIVIDEND INCOME:
|
||||||||||||
Debt securities, taxable
|
$ | 19,648 | $ | 25,090 | $ | 24,362 | ||||||
Residential and commercial real estate loans
|
18,023 | 18,312 | 18,783 | |||||||||
Commercial and industrial loans
|
6,496 | 7,150 | 8,032 | |||||||||
Debt securities, tax-exempt
|
1,533 | 1,470 | 1,389 | |||||||||
Consumer loans
|
213 | 263 | 322 | |||||||||
Equity securities
|
226 | 234 | 574 | |||||||||
Federal funds sold, interest-bearing deposits and other short-term investments
|
8 | 11 | 594 | |||||||||
Total interest and dividend income
|
46,147 | 52,530 | 54,056 | |||||||||
INTEREST EXPENSE:
|
||||||||||||
Deposits
|
9,850 | 12,694 | 15,133 | |||||||||
Long-term debt
|
6,538 | 6,984 | 6,291 | |||||||||
Short-term borrowings
|
377 | 344 | 880 | |||||||||
Total interest expense
|
16,765 | 20,022 | 22,304 | |||||||||
Net interest and dividend income
|
29,382 | 32,508 | 31,752 | |||||||||
PROVISION FOR LOAN LOSSES
|
8,923 | 3,900 | 3,453 | |||||||||
Net interest and dividend income after provision for loan losses
|
20,459 | 28,608 | 28,299 | |||||||||
NONINTEREST INCOME (LOSS):
|
||||||||||||
Total other-than-temporary impairment losses on equity securities
|
- | - | (1,283 | ) | ||||||||
Total other-than-temporary impairment losses on debt securities
|
(590 | ) | (1,754 | ) | - | |||||||
Portion of other-than-temporary impairment losses recognized in accumulated
other comprehensive loss on debt securities
|
443 | 1,476 | - | |||||||||
Net other-than-temporary impairment losses recognized in income
|
(147 | ) | (278 | ) | (1,283 | ) | ||||||
Service charges and fees
|
1,940 | 2,616 | 2,368 | |||||||||
Income from bank-owned life insurance
|
1,524 | 1,523 | 1,416 | |||||||||
Loss on sales of premises and equipment, net
|
- | (8 | ) | - | ||||||||
Loss on prepayment of borrowings
|
- | (142 | ) | - | ||||||||
Gain (loss) on sales of securities, net
|
4,072 | (383 | ) | 1,078 | ||||||||
Gain (loss) on disposal of OREO
|
1 | (110 | ) | - | ||||||||
Total noninterest income
|
7,390 | 3,218 | 3,579 | |||||||||
NONINTEREST EXPENSE:
|
||||||||||||
Salaries and employees benefits
|
14,712 | 15,018 | 14,719 | |||||||||
Occupancy
|
2,620 | 2,583 | 2,448 | |||||||||
Computer operations
|
1,940 | 1,760 | 1,717 | |||||||||
Professional fees
|
1,671 | 1,705 | 1,625 | |||||||||
OREO expense
|
374 | 47 | - | |||||||||
FDIC insurance assessment
|
751 | 1,134 | 89 | |||||||||
Other
|
2,741 | 2,853 | 2,794 | |||||||||
Total noninterest expense
|
24,809 | 25,100 | 23,392 | |||||||||
INCOME BEFORE INCOME TAXES
|
3,040 | 6,726 | 8,486 | |||||||||
INCOME TAX PROVISION
|
34 | 1,267 | 1,795 | |||||||||
NET INCOME
|
$ | 3,006 | $ | 5,459 | $ | 6,691 | ||||||
EARNINGS PER COMMON SHARE:
|
||||||||||||
Basic earnings per share
|
$ | 0.11 | $ | 0.19 | $ | 0.22 | ||||||
Weighted average shares outstanding
|
27,595,014 | 29,308,996 | 29,838,347 | |||||||||
Diluted earnings per share
|
$ | 0.11 | $ | 0.18 | $ | 0.22 | ||||||
Weighted average diluted shares outstanding
|
27,793,409 | 29,577,622 | 30,190,532 | |||||||||
See accompanying notes to consolidated financial statements.
|
Common Stock
|
Unearned | Accumulated | ||||||||||||||||||||||||||||||
Shares
|
Par
Value
|
Additional
Paid-in
Capital
|
Unearned Compensation-
ESOP
|
Compensation-
Equity Incentive
Plan
|
Retained
Earnings
|
Other
Comprehensive
Loss
|
Total
|
|||||||||||||||||||||||||
BALANCE AT DECEMBER 31, 2007
|
31,933,549 | $ | 319 | $ | 209,497 | $ | (11,542 | ) | $ | (5,493 | ) | $ | 92,702 | $ | 1,049 | $ | 286,532 | |||||||||||||||
Comprehensive loss:
|
||||||||||||||||||||||||||||||||
Net income
|
- | - | - | - | - | 6,691 | - | 6.691 | ||||||||||||||||||||||||
Net unrealized losses on securities available for sale arising during the period net of reclassification adjustment and tax effects
|
- | - | - | - | - | - | (7,376 | ) | (7,376 | ) | ||||||||||||||||||||||
Change in pension gains or losses and transition assets, net of
tax
|
- | - | - | - | - | - | (2,581 | ) | (2,581 | ) | ||||||||||||||||||||||
Total comprehensive loss
|
- | - | (3,266 | ) | ||||||||||||||||||||||||||||
Common stock held by ESOP committed to be released (93,947
shares)
|
- | - | 291 | 629 | - | - | - | 920 | ||||||||||||||||||||||||
Share-based compensation – stock options
|
- | - | 770 | - | - | - | - | 770 | ||||||||||||||||||||||||
Share-based compensation – equity incentive plan
|
- | - | - | - | 1,156 | - | - | 1,156 | ||||||||||||||||||||||||
Excess tax shortfalls from equity incentive plan
|
- | - | (11 | ) | - | - | - | - | (11 | ) | ||||||||||||||||||||||
Common stock repurchased
|
(1,058,778 | ) | (10 | ) | (10,473 | ) | - | - | - | - | (10,483 | ) | ||||||||||||||||||||
Issuance of common stock in connection with stock option exercises
|
433,110 | 4 | 4,447 | - | - | (2,550 | ) | - | 1,901 | |||||||||||||||||||||||
Excess tax benefits in connection with stock option exercises
|
- | - | 345 | - | - | - | - | 345 | ||||||||||||||||||||||||
Cash dividends declared (0.$60 per share)
|
- | - | - | - | - | (17,945 | ) | - | (17,945 | ) | ||||||||||||||||||||||
BALANCE AT DECEMBER 31, 2008
|
31,307,881 | 313 | 204,866 | (10,913 | ) | (4,337 | ) | 78,898 | (8 ,908 | ) | 259,919 | |||||||||||||||||||||
Comprehensive income:
|
||||||||||||||||||||||||||||||||
Net income
|
- | - | - | - | - | 5,459 | - | 5,459 | ||||||||||||||||||||||||
Noncredit portion of other-than-temporary impairment losses on
|
||||||||||||||||||||||||||||||||
available for sale securities net of reclassification and tax effects
|
- | - | - | - | - | - | (872 | ) | (872 | ) | ||||||||||||||||||||||
Net unrealized gains on securities available for sale arising
during the period, net of reclassification adjustment and tax
effects
|
6,791 | 6,791 | ||||||||||||||||||||||||||||||
Change in pension gains or losses and transition assets, net of
tax
|
- | - | - | - | - | 675 | 675 | |||||||||||||||||||||||||
Total comprehensive income
|
12,053 | |||||||||||||||||||||||||||||||
Common stock held by ESOP committed to be released (91,493
shares)
|
- | - | 210 | 614 | - | - | - | 824 | ||||||||||||||||||||||||
Share-based compensation - stock options
|
- | - | 899 | - | - | - | - | 899 | ||||||||||||||||||||||||
Share-based compensation - equity incentive plan
|
- | - | - | - | 1,285 | - | - | 1,285 | ||||||||||||||||||||||||
Excess tax benefit from equity incentive plan
|
- | - | 5 | - | - | - | - | 5 | ||||||||||||||||||||||||
Common stock repurchased
|
(1,591,733 | ) | (16 | ) | (13,674 | ) | - | - | - | - | (13,690 | ) | ||||||||||||||||||||
Issuance of common stock in connection with stock option exercises
|
102,378 | 1 | 957 | - | - | (509 | ) | - | 449 | |||||||||||||||||||||||
Issuance of common stock in connection with equity incentive plan
|
- | - | 205 | - | (205 | ) | - | - | - | |||||||||||||||||||||||
Forfeiture of common stock in connection with equity incentive plan
|
- | - | (9 | ) | - | 9 | - | - | - | |||||||||||||||||||||||
Excess tax benefits in connection with stock option exercises
|
- | - | 150 | - | - | - | - | 150 | ||||||||||||||||||||||||
Cash dividends declared ($0.50 per share)
|
- | - | - | - | - | (14,595 | ) | - | (14,595 | ) | ||||||||||||||||||||||
BALANCE AT DECEMBER 31, 2009
|
29,818,526 | 298 | 193,609 | (10,299 | ) | (3,248 | ) | 69,253 | (2,314 | ) | 247,299 | |||||||||||||||||||||
Comprehensive loss:
|
||||||||||||||||||||||||||||||||
Net income
|
- | - | - | - | - | 3,006 | - | 3,006 | ||||||||||||||||||||||||
Net unrealized losses on securities available for sale arising
|
||||||||||||||||||||||||||||||||
during the period, net of reclassification adjustment and tax
effects
|
- | - | - | - | - | - | (11,163 | ) | (11,163 | ) | ||||||||||||||||||||||
Net unrealized gains on securities resulting from transfer from
|
||||||||||||||||||||||||||||||||
held-maturity to available-for-sale, net tax effects
|
- | - | - | - | - | - | 8,351 | 8,351 | ||||||||||||||||||||||||
Change in pension gains or losses and transition assets, net of tax
|
- | - | - | - | - | - | (390 | ) | (390 | ) | ||||||||||||||||||||||
Total comprehensive loss:
|
(196 | ) | ||||||||||||||||||||||||||||||
Common stock held by ESOP committed to be released (89,039
shares)
|
- | - | 149 | 598 | - | - | - | 747 | ||||||||||||||||||||||||
Share-based compensation - stock options
|
- | - | 798 | - | - | - | - | 798 | ||||||||||||||||||||||||
Share-based compensation - equity incentive plan
|
- | - | - | - | 1,159 | - | - | 1,159 | ||||||||||||||||||||||||
Excess tax shortfalls from equity incentive plan
|
- | - | (18 | ) | - | - | - | - | (18 | ) | ||||||||||||||||||||||
Common stock repurchased
|
(1,988,634 | ) | (19 | ) | (16,108 | ) | - | - | - | - | (16,127 | ) | ||||||||||||||||||||
Issuance of common stock in connection with stock option exercises
|
336,527 | 3 | 2,942 | - | - | (1,468 | ) | - | 1,477 | |||||||||||||||||||||||
Issuance of common stock in connection with equity incentive plan
|
- | - | 69 | - | (69 | ) | - | - | - | |||||||||||||||||||||||
Excess tax benefits in connection with stock option exercises
|
- | - | 401 | - | - | - | - | 401 | ||||||||||||||||||||||||
Cash dividends declared ($0.52 per share)
|
- | - | - | - | - | (14,295 | ) | - | (14,295 | ) | ||||||||||||||||||||||
BALANCE AT DECEMBER 31, 2010
|
28,166,419 | $ | 282 | $ | 181,842 | $ | (9,701 | ) | $ | (2,158 | ) | $ | 56,496 | $ | (5,516 | ) | $ | 221,245 | ||||||||||||||
See the accompanying notes to consolidated financial statements.
|
WESTFIELD FINANCIAL, INC. AND SUBSIDIARIES
|
||||||||||||
CONSOLIDATED STATEMENTS OF CASHFLOWS
|
||||||||||||
(Dollars in thousands)
|
||||||||||||
Years Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
OPERATING ACTIVITIES:
|
||||||||||||
Net income
|
$ | 3,006 | $ | 5,459 | $ | 6,691 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||||||
Provision for loan losses
|
8,923 | 3,900 | 3,453 | |||||||||
Depreciation and amortization of premises and equipment
|
1,261 | 1,252 | 1,182 | |||||||||
Net amortization of premiums and discounts on securities and mortgage loans
|
6,053 | 1,909 | 178 | |||||||||
Share-based compensation expense
|
1,957 | 2,184 | 1,926 | |||||||||
Amortization of ESOP expense
|
747 | 824 | 920 | |||||||||
Excess tax shortfalls (benefits) from equity incentive plan
|
18 | (5 | ) | 11 | ||||||||
Excess tax benefits in connection with stock option exercises
|
(401 | ) | (150 | ) | (345 | ) | ||||||
Net (gains) losses on sales of securities
|
(4,072 | ) | 383 | (1,078 | ) | |||||||
Other-than-temporary impairment losses on securities
|
147 | 278 | 1,283 | |||||||||
Write-downs of other real estate owned
|
285 | 17 | - | |||||||||
(Gain) loss on sale of other real estate owned, net
|
(1 | ) | 110 | - | ||||||||
Loss on disposition of premises and equipment, net
|
- | 8 | - | |||||||||
Loss on prepayment of borrowings
|
- | 142 | - | |||||||||
Deferred income tax benefit
|
(389 | ) | (112 | ) | (1,098 | ) | ||||||
Income from bank-owned life insurance
|
(1,524 | ) | (1,523 | ) | (1,416 | ) | ||||||
Changes in assets and liabilities:
|
||||||||||||
Accrued interest receivable
|
928 | 37 | 526 | |||||||||
Other assets
|
358 | (2,863 | ) | 107 | ||||||||
Other liabilities
|
1,059 | (1,411 | ) | (1,245 | ) | |||||||
Net cash provided by operating activities
|
18,355 | 10,439 | 11,095 | |||||||||
INVESTING ACTIVITIES:
|
||||||||||||
Securities held to maturity:
|
||||||||||||
Purchases
|
(62,111 | ) | (128,489 | ) | (33,379 | ) | ||||||
Proceeds from calls, maturities, and principal collections
|
69,075 | 80,215 | 61,927 | |||||||||
Securities available for sale:
|
||||||||||||
Purchases
|
(654,889 | ) | (297,683 | ) | (164,275 | ) | ||||||
Proceeds from sales
|
496,990 | 149,809 | 109,195 | |||||||||
Proceeds from calls, maturities, and principal collections
|
122,598 | 66,911 | 56,880 | |||||||||
Purchase of residential mortgages
|
(61,880 | ) | (16,381 | ) | (1,648 | ) | ||||||
Loan originations and principal payments, net
|
19,122 | 13,473 | (59,074 | ) | ||||||||
Purchase of Federal Home Loan Bank of Boston stock
|
(1,912 | ) | (1,883 | ) | (946 | ) | ||||||
Proceeds from sale of other real estate owned
|
1,693 | 148 | - | |||||||||
Purchases of premises and equipment
|
(662 | ) | (1,396 | ) | (536 | ) | ||||||
Purchase of bank-owned life insurance
|
- | (320 | ) | (2,345 | ) | |||||||
Net cash used in investing activities
|
(71,976 | ) | (135,596 | ) | (34,201 | ) | ||||||
FINANCING ACTIVITIES:
|
||||||||||||
Net increase (decrease) in deposits
|
52,360 | 59,946 | (14,647 | ) | ||||||||
Net change in short-term borrowings
|
(11,562 | ) | 24,675 | 14,556 | ||||||||
Repayment of long-term debt
|
(20,852 | ) | (80,142 | ) | (20,000 | ) | ||||||
Proceeds from long-term debt
|
45,129 | 120,545 | 88,300 | |||||||||
Cash dividends paid
|
(14,295 | ) | (14,595 | ) | (17,945 | ) | ||||||
Common stock repurchased
|
(16,127 | ) | (13,690 | ) | (10,483 | ) | ||||||
Issuance of common stock in connection with stock option exercises
|
1,477 | 449 | 1,901 | |||||||||
Excess tax (shortfalls) benefits in connection with equity incentive plan
|
(18 | ) | 5 | (11 | ) | |||||||
Excess tax benefits in connection with stock option exercises
|
401 | 150 | 345 | |||||||||
Net cash provided by financing activities
|
36,513 | 97,343 | 42,016 | |||||||||
NET CHANGE IN CASH AND CASH EQUIVALENTS:
|
(17,108 | ) | (27,814 | ) | 18,910 | |||||||
Beginning of year
|
28,719 | 56,533 | 37,623 | |||||||||
End of year
|
$ | 11,611 | $ | 28,719 | $ | 56,533 | ||||||
Supplemental cash flow information:
|
||||||||||||
Transfer of loans to other real estate owned
|
$ | 538 | $ | 1,937 | $ | - | ||||||
Increase (decrease) due from broker
|
7,791 | (27,603 | ) | 27,603 | ||||||||
Securities reclassified from held-to-maturity to available-for-sale
|
287,074 | - | - | |||||||||
See the accompanying notes to consolidated financial statements
|
Years
|
|
Buildings
|
39
|
Leasehold Improvements
|
5-20
|
Furniture and Equipment
|
3-7
|
Years Ended December 31,
|
|||||||||||||
2010
|
2009
|
2008
|
|||||||||||
(In thousands, except per share data)
|
|||||||||||||
Net income applicable to common stock
|
$ | 3,006 | $ | 5,459 | $ | 6,691 | |||||||
Average number of common shares issued
|
29,063 | 30,873 | 31,509 | ||||||||||
Less: Average unallocated ESOP Shares
|
(1,426 | ) | (1,513 | ) | (1,606 | ) | |||||||
Average ungranted equity incentive plan shares
|
(42 | ) | (51 | ) | (65 | ) | |||||||
Average number of common shares outstanding used
|
|||||||||||||
to calculate basic earnings per common share(1)
|
27,595 | 29,309 | 29,838 | ||||||||||
Effect of dilutive stock options
|
198 | 269 | 352 | ||||||||||
Average number of common shares outstanding used
|
|||||||||||||
to calculate diluted earnings per common share
|
27,793 | 29,578 | 30,190 | ||||||||||
Basic earnings per share
|
$ | 0.11 | $ | 0.19 | $ | 0.22 | |||||||
Diluted earnings per share
|
$ | 0.11 | $ | 0.18 | $ | 0.22 |
Years Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
(In thousands)
|
||||||||||||
Unrealized holding (losses) gains on available for sale securities
|
$ | (12,766 | ) | $ | 8,548 | $ | (11,899 | ) | ||||
Reclassification adjustment for securities transferred from held-to-maturity to available-for-sale
|
12,653 | - | - | |||||||||
Reclassification adjustment for (gains) losses realized in income
|
(4,072 | ) | 383 | (1,078 | ) | |||||||
Other-than-temporary impairment losses on available-for-sale securities
|
147 | 278 | 1,283 | |||||||||
Net unrealized (losses) gains on available for sale securities
|
(4,038 | ) | 9,209 | (11,694 | ) | |||||||
Tax effect
|
1,226 | (3,290 | ) | 4,318 | ||||||||
Net-of-tax amount
|
(2,812 | ) | 5,919 | (7,376 | ) | |||||||
Gains and losses arising during the year pertaining to defined benefit plans
|
(670 | ) | 898 | (3,852 | ) | |||||||
Reclassification adjustments for items reflected in earnings:
|
||||||||||||
Actuarial loss (gain)
|
91 | 137 | (45 | ) | ||||||||
Transition asset
|
(12 | ) | (12 | ) | (13 | ) | ||||||
Net adjustments pertaining to defined benefit plans
|
(591 | ) | 1,023 | (3,910 | ) | |||||||
Tax effect
|
201 | (348 | ) | 1,329 | ||||||||
Net-of-tax amount
|
(390 | ) | 675 | (2,581 | ) | |||||||
Net other comprehensive (loss) income
|
$ | (3,202 | ) | $ | 6,594 | $ | (9,957 | ) |
December 31,
|
||||||||
2010
|
2009
|
|||||||
(In thousands)
|
||||||||
Net unrealized loss on securities available for sale
|
$ | (5,299 | ) | $ | (228 | ) | ||
Tax effect
|
1,817 | 138 | ||||||
Net-of-tax amount
|
(3,482 | ) | (90 | ) | ||||
Noncredit portion of other-than-temporary impairment losses on available for sale securities
|
(443 | ) | (1,476 | ) | ||||
Tax effect
|
151 | 604 | ||||||
Net-of-tax amount
|
(292 | ) | (872 | ) | ||||
Unrecognized transition assets pertaining to defined benefit plans
|
44 | 56 | ||||||
Unrecognized deferred loss pertaining to defined benefit plan
|
(2,682 | ) | (2,103 | ) | ||||
Net accumulated other comprehensive loss pertaining to defined benefit plans
|
(2,638 | ) | (2,047 | ) | ||||
Tax effect
|
896 | 695 | ||||||
Net-of-tax amount
|
(1,742 | ) | (1,352 | ) | ||||
Net accumulated other comprehensive loss
|
$ | (5,516 | ) | $ | (2,314 | ) |
December 31, 2010
|
||||||||||||||||
Amortized
Cost
|
Gross
Unrealized
Gains |
Gross
Unrealized
Losses
|
Fair Value
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Available for sale:
|
||||||||||||||||
Government-sponsored residential mortgage-backed securities
|
$ | 381,436 | $ | 4,967 | $ | (5,419 | ) | $ | 380,984 | |||||||
U.S. government guaranteed residential mortgage-backed securities
|
192,609 | 396 | (5,329 | ) | 187,676 | |||||||||||
Private-label residential mortgage-backed securities
|
8,251 | - | (673 | ) | 7,578 | |||||||||||
Government-sponsored enterprise obligations
|
18,447 | 193 | (776 | ) | 17,864 | |||||||||||
Municipal bonds
|
42,119 | 1,298 | (340 | ) | 43,077 | |||||||||||
Mutual funds
|
6,949 | 25 | (61 | ) | 6,913 | |||||||||||
Common and preferred stock
|
70 | - | (23 | ) | 47 | |||||||||||
Total
|
$ | 649,881 | $ | 6,879 | $ | (12,621 | ) | $ | 644,139 | |||||||
December 31, 2009
|
||||||||||||||||
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair Value
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Available for sale:
|
||||||||||||||||
Government-sponsored residential mortgage-backed securities
|
$ | 289,840 | $ | 2,696 | $ | (2,288 | ) | $ | 290,248 | |||||||
U.S. government guaranteed residential mortgage-backed securities
|
1,030 | 17 | - | 1,047 | ||||||||||||
Private-label residential mortgage-backed securities
|
10,368 | - | (1,858 | ) | 8,510 | |||||||||||
Government-sponsored enterprise obligations
|
11,000 | - | (302 | ) | 10,698 | |||||||||||
Municipal bonds
|
1,956 | 114 | - | 2,070 | ||||||||||||
Mutual funds
|
6,561 | 1 | (73 | ) | 6,489 | |||||||||||
Common and preferred stock
|
70 | - | (11 | ) | 59 | |||||||||||
Total available for sale
|
320,825 | 2,828 | (4,532 | ) | 319,121 | |||||||||||
Held to maturity:
|
||||||||||||||||
Government-sponsored residential mortgage-backed securities
|
204,484 | 6,111 | (184 | ) | 210,411 | |||||||||||
U.S. government guaranteed residential mortgage-backed securities
|
16,334 | 95 | (143 | ) | 16,286 | |||||||||||
Private-label residential mortgage-backed securities
|
4,949 | 44 | (435 | ) | 4,558 | |||||||||||
Government-sponsored enterprise obligations
|
34,884 | 1,776 | - | 36,660 | ||||||||||||
Municipal bonds
|
34,360 | 1,353 | (9 | ) | 35,704 | |||||||||||
Total held to maturity
|
295,011 | 9,379 | (771 | ) | 303,619 | |||||||||||
Total securities
|
$ | 615,836 | $ | 12,207 | $ | (5,303 | ) | $ | 622,740 |
December 31, 2010
|
||||||||
Amortized
Cost
|
Fair Value
|
|||||||
(In thousands)
|
||||||||
Available for sale:
|
||||||||
Due in one year or less
|
$ | 896 | $ | 902 | ||||
Due after one year through five years
|
18,311 | 18,811 | ||||||
Due after five years through ten years
|
21,361 | 21,960 | ||||||
Due after ten years
|
19,998 | 19,268 | ||||||
Total available for sale
|
$ | 60,566 | $ | 60,941 |
Years Ended Decmeber 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
(In thousands)
|
||||||||||||
Gross gains realized
|
$ | 6,346 | $ | 2,033 | $ | 1,246 | ||||||
Gross losses realized
|
(2,274 | ) | (2,416 | ) | (168 | ) | ||||||
Net gain (loss) realized
|
$ | 4,072 | $ | (383 | ) | $ | 1,078 |
December 31, 2010
|
||||||||||||||||
Less Than Twelve Months
|
Over Twelve Months
|
|||||||||||||||
Gross
Unrealized
Losses
|
Fair Value
|
Gross
Unrealized
Losses
|
Fair Value | |||||||||||||
(In thousands)
|
||||||||||||||||
Available for sale:
|
||||||||||||||||
Government-sponsored residential mortgage-backed securities
|
$ | (5,419 | ) | $ | 225,105 | $ | - | $ | - | |||||||
U.S. government guaranteed residential mortgage-backed securities
|
(5,329 | ) | 145,430 | - | - | |||||||||||
Private-label residential mortgage-backed securities
|
- | - | (673 | ) | 7,578 | |||||||||||
Government-sponsored enterprise obligations
|
(776 | ) | 15,674 | - | - | |||||||||||
Municipal bonds
|
(340 | ) | 8,856 | - | - | |||||||||||
Mutual funds
|
- | - | (61 | ) | 1,548 | |||||||||||
Common and preferred stock
|
- | - | (23 | ) | 16 | |||||||||||
Total
|
$ | (11,864 | ) | $ | 395,065 | $ | (757 | ) | $ | 9,142 | ||||||
December 31, 2009
|
||||||||||||||||
Less Than Twelve Months
|
Over Twelve Months
|
|||||||||||||||
Gross
Unrealized
Losses
|
Fair Value
|
Gross
Unrealized
Losses
|
Fair Value | |||||||||||||
(In thousands)
|
||||||||||||||||
Available for sale:
|
||||||||||||||||
Government-sponsored residential mortgage-backed securities
|
$ | (2,287 | ) | $ | 170,741 | $ | (1 | ) | $ | 128 | ||||||
Private-label residential mortgage-backed securities
|
- | - | (1,858 | ) | 8,510 | |||||||||||
Government-sponsored enterprise obligations
|
(302 | ) | 10,698 | - | - | |||||||||||
Mutual funds
|
(19 | ) | 2,597 | (54 | ) | 1,479 | ||||||||||
Common and preferred stock
|
(11 | ) | 28 | - | - | |||||||||||
Total available for sale
|
(2,619 | ) | 184,064 | (1,913 | ) | 10,117 | ||||||||||
Held to maturity:
|
||||||||||||||||
Government-sponsored residential mortgage-backed securities
|
(159 | ) | 21,227 | (25 | ) | 1,677 | ||||||||||
U.S. government guaranteed residential mortgage-backed securities
|
(143 | ) | 9,760 | - | - | |||||||||||
Private-label residential mortgage-backed securities
|
- | - | (435 | ) | 3,123 | |||||||||||
Municipal bonds
|
(9 | ) | 356 | - | - | |||||||||||
Total held to maturity
|
(311 | ) | 31,343 | (460 | ) | 4,800 | ||||||||||
Total
|
$ | (2,930 | ) | $ | 215,407 | $ | (2,373 | ) | $ | 14,917 |
Years Ended December 31,
|
||||||||
2010
|
2009
|
|||||||
(In thousands)
|
||||||||
Balance at beginning of year
|
$ | 278 | $ | 0 | ||||
Additional credit losses for which other-than-temporary impairment charge was previously recorded
|
147 | 278 | ||||||
Balance at end of year
|
$ | 425 | $ | 278 |
Loans consisted of the following amounts:
|
December 31,
|
|||||||
2010
|
2009
|
|||||||
(In thousands)
|
||||||||
Commercial real estate
|
$ | 221,578 | $ | 229,061 | ||||
Residential real estate
|
112,680 | 64,299 | ||||||
Home equity
|
36,116 | 34,755 | ||||||
Commercial and industrial
|
135,250 | 145,012 | ||||||
Consumer
|
2,960 | 3,307 | ||||||
Total Loans
|
508,584 | 476,434 | ||||||
Unearned premiums and deferred loan fees and costs, net
|
742 | 360 | ||||||
Allowance for loan losses
|
(6,934 | ) | (7,645 | ) | ||||
$ | 502,392 | $ | 469,149 |
An analysis of changes in the allowance for loan losses is as follows:
|
||||||||||||
Years Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
(In thousands)
|
||||||||||||
Balance, beginning of year
|
$ | 7,645 | $ | 8,796 | $ | 5,726 | ||||||
Provision
|
8,923 | 3,900 | 3,453 | |||||||||
Charge-offs
|
(9,717 | ) | (5,099 | ) | (449 | ) | ||||||
Recoveries
|
83 | 48 | 66 | |||||||||
Balance, end of year
|
$ | 6,934 | $ | 7,645 | $ | 8,796 |
Residential
Real
Estate
|
Commercial
Real
Estate
|
Commercial
and
Industrial
|
Consumer
|
Total
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
Amount of allowance for loan losses for
loans deemed to be impaired
|
$ | - | $ | - | $ | 19 | $ | - | $ | 19 | ||||||||||
Amount of allowance for loan losses not
deemed to be impaired
|
877 | 3,182 | 2,830 | 26 | 6,915 | |||||||||||||||
Loans deemed to be impaired
|
125 | 1,891 | 539 | - | 2,555 | |||||||||||||||
Loans not deemed to be impaired
|
148,671 | 219,687 | 134,711 | 2,960 | 506,029 |
30 – 59
Days Past
Due
|
60 – 89
Days Past
Due |
Greater
than 90
Days Past
Due
|
Total Past
Due
|
Past Due
90 Days or
More and
Still
Accruing
|
Loans in
Non-
Accrual
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
Residential real estate:
|
||||||||||||||||||||||||
Residential 1-4 family
|
$ | 196 | $ | 459 | $ | 172 | $ | 827 | $ | - | $ | 629 | ||||||||||||
Home equity
|
121 | - | 138 | 259 | - | 144 | ||||||||||||||||||
Commercial real estate
|
14,797 | - | 919 | 15,716 | - | 1,891 | ||||||||||||||||||
Commercial and industrial
|
204 | 1,000 | 150 | 1,354 | - | 539 | ||||||||||||||||||
Consumer
|
7 | - | - | 7 | - | 1 | ||||||||||||||||||
Total
|
$ | 15,325 | $ | 1,459 | $ | 1,379 | $ | 18,163 | $ | - | $ | 3,204 |
December 31, 2010
|
||||||||||||
Recorded
Investment
|
Unpaid
Principal
Balance
|
Related
Allowance
|
||||||||||
(In thousands)
|
||||||||||||
Impaired loans without a valuation allowance:
|
||||||||||||
Residential real estate
|
$ | 125 | $ | 127 | $ | - | ||||||
Commercial real estate
|
1,891 | 1,939 | - | |||||||||
Commercial and Industrial
|
389 | 1,374 | - | |||||||||
Total
|
2,405 | 3,440 | - | |||||||||
Impaired loans with a valuation allowance:
|
||||||||||||
Commercial and Industrial
|
150 | 150 | 19 | |||||||||
Total impaired loans
|
$ | 2,555 | $ | 3,590 | $ | 19 |
December 31,
|
||||
2009
|
||||
(In thousands)
|
||||
Impaired loans without a valuation allowance
|
$ | 192 | ||
Impaired loans with a valuation allowance
|
4,450 | |||
Total impaired loans
|
$ | 4,642 | ||
Valuation allowance related to impaired loans
|
$ | 875 | ||
Impaired loans in nonaccrual status
|
$ | 4,642 |
Years Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
(In thousands)
|
||||||||||||
Average recorded investment in impaired loans
|
$ | 3,378 | $ | 4,875 | $ | 2,134 | ||||||
Income recorded on cash basis during the period for impaired loans
|
- | - | - |
Commercial
Real
Estate
|
Commercial and
Industrial
|
|||||||
Loans rated 1 – 3
|
$ | 174,137 | $ | 83,650 | ||||
Loans rated 4
|
24,149 | 32,723 | ||||||
Loans rated 5
|
3,164 | 7,424 | ||||||
Loans rated 6
|
20,128 | 11,453 | ||||||
Loans rated 7
|
- | - | ||||||
$ | 221,578 | $ | 135,250 |
December 31,
|
||||||||
2010
|
2009
|
|||||||
(In thousands)
|
||||||||
Land
|
$ | 1,826 | $ | 1,826 | ||||
Buildings
|
12,572 | 12,393 | ||||||
Leasehold improvements
|
1,435 | 1,435 | ||||||
Furniture and equipment
|
8,947 | 8,462 | ||||||
Construction in process
|
- | 2 | ||||||
Total
|
24,780 | 24,118 | ||||||
Accumulated depreciation and amortization
|
(13,177 | ) | (11,916 | ) | ||||
Premises and equipment, net
|
$ | 11,603 | $ | 12,202 |
December 31,
|
||||||||||||||||
2010
|
2009
|
|||||||||||||||
Amount
|
Rate
|
Amount
|
Rate
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Demand and NOW:
|
||||||||||||||||
NOW accounts
|
$ | 83,621 | 1.08 | % | $ | 70,462 | 1.42 | % | ||||||||
Demand deposits
|
85,217 | - | 80,110 | - | ||||||||||||
Savings:
|
||||||||||||||||
Regular accounts
|
101,333 | 0.62 | 104,650 | 0.88 | ||||||||||||
Money market accounts
|
76,184 | 0.57 | 50,120 | 0.74 | ||||||||||||
Time certificates of deposit
|
353,980 | 1.98 | 342,633 | 2.49 | ||||||||||||
Total deposits
|
$ | 700,335 | 1.28 | % | $ | 647,975 | 1.65 | % |
Year Ending
December 31,
|
Amount
|
|||
(In thousands)
|
||||
2011
|
$ | 236,926 | ||
2012
|
31,356 | |||
2013
|
41,226 | |||
2014
|
36,540 | |||
2015
|
7,932 | |||
$ | 353,980 |
Years Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
(In thousands)
|
||||||||||||
Savings
|
$ | 823 | $ | 955 | $ | 748 | ||||||
Money market
|
358 | 467 | 763 | |||||||||
Time
|
7,735 | 10,034 | 12,417 | |||||||||
Other interest-bearing
|
934 | 1,238 | 1,205 | |||||||||
$ | 9,850 | $ | 12,694 | $ | 15,133 |
Years Ended
|
||||||||
December 31,
|
||||||||
2010
|
2009
|
|||||||
(Dollars in thousands)
|
||||||||
Balance outstanding, end of year
|
$ | 12,336 | $ | 16,499 | ||||
Maximum amount outstanding at any month end during year
|
20,321 | 25,834 | ||||||
Average amount outstanding during year
|
14,459 | 22,835 | ||||||
Weighted average interest rate, end of year
|
0.40 | % | 1.29 | % | ||||
Amortized cost of collateral pledged, end of year (1)
|
30,787 | 37,640 | ||||||
Fair value of collateral pledged, end of year (1)
|
32,086 | 39,376 |
(1)Includes collateral pledged toward $5.0 million in long-term customer repurchase agreements.
|
Our repurchase agreements are collateralized by government-sponsored enterprises and certain mortgage-backed securities. The weighted average interest rate on the pledged collateral was 4.60% and 4.92% at December 31, 2010 and 2009, respectively.
|
Weighted Average
|
||||||||||||||||
Amount
|
Rate
|
|||||||||||||||
December 31,
|
December 31,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
(In thousands) | ||||||||||||||||
Fixed rate advances maturing:
|
||||||||||||||||
2010
|
$ | 5,150 | $ | 25,000 | 1.7 | % | 2.6 | % | ||||||||
2011
|
34,605 | 21,650 | 2.0 | 2.1 | ||||||||||||
2012
|
31,650 | 39,150 | 2.5 | 3.6 | ||||||||||||
2013
|
29,887 | 16,650 | 3.0 | 3.1 | ||||||||||||
2014
|
27,000 | 15,000 | 3.6 | 3.8 | ||||||||||||
2015
|
14,000 | 10,000 | 2.7 | 3.8 | ||||||||||||
142,292 | 127,450 | 2.7 | 3.1 | |||||||||||||
Variable rate advances maturing:
|
||||||||||||||||
2015
|
9,336 | - | 2.4 | - | ||||||||||||
Total advances
|
$ | 151,628 | $ | 127,450 | 2.7 | % | 3.1 | % |
Weighted Average
|
||||||||||||||||
Amount
|
Rate
|
|||||||||||||||
December 31,
|
December 31,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Fixed rate advances maturing:
|
||||||||||||||||
2013
|
$ | 14,800 | $ | 14,800 | 2.5 | % | 2.5 | % | ||||||||
2014
|
28,000 | 28,000 | 3.1 | 3.1 | ||||||||||||
2018
|
29,500 | 29,500 | 2.9 | 2.9 | ||||||||||||
72,300 | 72,300 | 2.9 | 2.9 | |||||||||||||
Variable rate advances maturing:
|
||||||||||||||||
2018
|
9,000 | 9,000 | 3.8 | 1.9 | ||||||||||||
Total advances
|
$ | 81,300 | $ | 81,300 | 3.0 | % | 2.8 | % |
At December 31, 2010, we had $48.3 million in callable securities sold under agreements to repurchase. At December 31, 2010, the years in which securities sold under agreements to repurchase are callable are as follows:
|
Weighted Average
|
||||||||
Amount
|
Rate
|
|||||||
(In thousands)
|
||||||||
2011
|
$ | 38,300 | 2.9 | % | ||||
2012
|
10,000 | 3.1 | ||||||
$ | 48,300 | 2.9 | % |
Years Ended December 31,
|
||||||
2010
|
2009
|
|||||
Expected dividend yield
|
7.04 | % | 6.35 | % | ||
Expected volatility
|
35.83 | % | 36.09 | % | ||
Risk-free interest rate
|
2.48 | % | 2.78 | % | ||
Expected life
|
10 years
|
10 years
|
||||
No stock options were granted during the year ended December 31, 2008.
|
Shares
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining
Contractual
Term
|
Aggregate
Intrinsic
Value
|
|||||||||||||
(In years)
|
(In thousands)
|
|||||||||||||||
Outstanding at December 31, 2009
|
2,223,012 | $ | 8.36 | |||||||||||||
Granted
|
25,000 | 10.04 | ||||||||||||||
Exercised
|
(336,527 | ) | 4.39 | |||||||||||||
Outstanding at December 31, 2010
|
1,911,485 | 9.08 | 5.84 | 1,578 | ||||||||||||
Exercisable at December 31, 2010
|
1,271,141 | $ | 8.59 | 5.37 | 1,578 |
Shares
|
Weighted Average
Grant Date Fair
Value
|
|||||||
Balance at December 31, 2009
|
358,573 | $ | 10.00 | |||||
Shares granted
|
9,000 | 7.67 | ||||||
Shares vested
|
(118,961 | ) | 10.00 | |||||
Balance at December 31, 2010
|
248,612 | $ | 9.92 |
Year Ending
|
||||
December 31,
|
Amount
|
|||
2011
|
$ | 446,782 | ||
2012
|
446,782 | |||
2013
|
446,782 | |||
2014
|
446,782 | |||
2015
|
446,782 | |||
Thereafter
|
8,375,176 | |||
$ | 10,609,086 |
2010
|
2009
|
|||||||
Allocated
|
504,462 | 437,626 | ||||||
Committed to be allocated
|
89,039 | 91,493 | ||||||
Unallocated
|
1,370,934 | 1,459,973 | ||||||
1,964,435 | 1,989,092 |
Years Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
(In thousands)
|
||||||||||||
Change in benefit obligation:
|
||||||||||||
Benefit obligation, beginning of year
|
$ | 14,057 | $ | 12,698 | $ | 10,804 | ||||||
Service cost
|
930 | 862 | 817 | |||||||||
Interest
|
773 | 730 | 756 | |||||||||
Actuarial loss
|
1,079 | 26 | 628 | |||||||||
Benefits paid
|
(648 | ) | (259 | ) | (307 | ) | ||||||
Benefit obligation, end of year
|
16,191 | 14,057 | 12,698 | |||||||||
Change in plan assets:
|
||||||||||||
Fair value of plan assets, beginning of year
|
9,793 | 8,445 | 9,504 | |||||||||
Actual return (loss) on plan assets
|
1,205 | 1,607 | (2,423 | ) | ||||||||
Employer contribution
|
600 | - | 1,671 | |||||||||
Benefits paid
|
(648 | ) | (259 | ) | (307 | ) | ||||||
Fair value of plan assets, end of year
|
10,950 | 9,793 | 8,445 | |||||||||
Funded status and accrued benefit, end of year
|
$ | 5,241 | $ | 4,264 | $ | 4,253 | ||||||
Accumulated benefit obligation, end of year
|
$ | 9,842 | $ | 7,579 | $ | 6,824 |
2010
|
2009
|
|||||||
Discount rate
|
5.50 | % | 5.50 | % | ||||
Rate of compensation increase
|
5.00 | 5.00 |
2010
|
2009 |
2008
|
||||||||||
(In thousands)
|
||||||||||||
Service cost
|
$ | 930 | $ | 862 | $ | 817 | ||||||
Interest cost
|
773 | 730 | 756 | |||||||||
Expected return on assets
|
(783 | ) | (676 | ) | (887 | ) | ||||||
Actuarial loss (gain)
|
91 | 137 | (45 | ) | ||||||||
Transition asset amortization
|
(12 | ) | (12 | ) | (13 | ) | ||||||
Net periodic pension cost
|
$ | 999 | $ | 1,041 | $ | 628 |
Years Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
Discount rate
|
5.50 | % | 5.75 | % | 6.00 | % | ||||||
Expected return on plan assets
|
8.00 | 8.00 | 8.00 | |||||||||
Rate of compensation increase
|
5.00 | 5.00 | 5.00 |
The expected long term rate of return on plan assets is based on prevailing yields of high quality fixed income investments increased by a premium of 3.00% to 5.00% for equity investments. We have not yet determined what we expect to contribute to our pension plan in 2011.
|
December 31, 2010
|
||||||||||||||||
Plan Assets
|
Level 1
|
Level 2
|
Level 3
|
Fair Value
|
||||||||||||
(In thousands)
|
||||||||||||||||
Collective funds
|
$ | 3,004 | $ | 2,043 | $ | - | $ | 5,047 | ||||||||
Equity securities
|
3,038 | - | - | 3,038 | ||||||||||||
Mutual funds
|
1,608 | - | - | 1,608 | ||||||||||||
Hedge funds
|
- | - | 786 | 786 | ||||||||||||
Short-term investments
|
- | 471 | - | 471 | ||||||||||||
$ | 7,650 | $ | 2,514 | $ | 786 | $ | 10,950 |
December 31, 2009
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Fair Value
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Collective funds
|
$ | 2,400 | $ | 1,633 | $ | - | $ | 4,033 | ||||||||
Equity securities
|
2,522 | - | - | 2,522 | ||||||||||||
Mutual funds
|
1,419 | - | - | 1,419 | ||||||||||||
Hedge funds
|
- | - | 756 | 756 | ||||||||||||
Short-term investments
|
- | 1,063 | - | 1,063 | ||||||||||||
$ | 6,341 | $ | 2,696 | $ | 756 | $ | 9,793 |
Year Ended December 31,
|
||||||||
2010
|
2009
|
|||||||
(In thousands)
|
||||||||
Balance at beginning of year
|
$ | 756 | $ | 659 | ||||
Unrealized appreciation
|
30 | 97 | ||||||
Balance at end of year
|
$ | 786 | $ | 756 |
Year
|
Benefit Payments to Participants
|
||||
(In thousands)
|
|||||
2011
|
$ | 1,801 | |||
2012
|
710 | ||||
2013
|
237 | ||||
2014
|
963 | ||||
2015
|
504 | ||||
In aggregate for 2016 – 2020
|
3,265 | ||||
$ | 7,480 |
Actual
|
Minimum for Capital
Adequacy Purposes
|
Minimum To Be Well
Capitalized Under Prompt
Corrective Action
Provisions
|
||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
December 31, 2010
|
||||||||||||||||||||||||
Total Capital (to Risk Weighted Assets):
|
||||||||||||||||||||||||
Consolidated
|
$ | 231,272 | 34.05 | % | $ | 54,339 | 8.00 | % | N/A | - | ||||||||||||||
Bank
|
221,643 | 32.69 | 54,238 | 8.00 | $ | 67,797 | 10.00 | % | ||||||||||||||||
Tier 1 Capital (to Risk Weighted Assets):
|
||||||||||||||||||||||||
Consolidated
|
224,338 | 33.03 | 27,169 | 4.00 | N/A | - | ||||||||||||||||||
Bank
|
214,668 | 31.66 | 27,119 | 4.00 | 40,678 | 6.00 | ||||||||||||||||||
Tier 1 Capital (to Adjusted Total Assets):
|
||||||||||||||||||||||||
Consolidated
|
224,338 | 18.07 | 49,662 | 4.00 | N/A | - | ||||||||||||||||||
Bank
|
214,668 | 17.37 | 49,434 | 4.00 | 61,793 | 5.00 | ||||||||||||||||||
Tangible Equity (to Tangible Assets):
|
||||||||||||||||||||||||
Consolidated
|
N/A | - | N/A | - | N/A | - | ||||||||||||||||||
Bank
|
214,668 | 17.37 | 24,717 | 2.00 | N/A | - | ||||||||||||||||||
December 31, 2009
|
||||||||||||||||||||||||
Total Capital (to Risk Weighted Assets):
|
||||||||||||||||||||||||
Consolidated
|
$ | 257,209 | 38.07 | % | $ | 54,052 | 8.00 | % | N/A | |||||||||||||||
Bank
|
236,940 | 35.29 | 53,706 | 8.00 | $ | 67,132 | 10.00 | % | ||||||||||||||||
Tier 1 Capital (to Risk Weighted Assets):
|
||||||||||||||||||||||||
Consolidated
|
249,564 | 36.94 | 27,026 | 4.00 | N/A | - | ||||||||||||||||||
Bank
|
230,109 | 34.28 | 26,853 | 4.00 | 40,279 | 6.00 | ||||||||||||||||||
Tier 1 Capital (to Adjusted Total Assets):
|
||||||||||||||||||||||||
Consolidated
|
249,564 | 20.92 | 47,713 | 4.00 | N/A | - | ||||||||||||||||||
Bank
|
230,109 | 19.56 | 47,059 | 4.00 | 58,824 | 5.00 | ||||||||||||||||||
Tangible Equity (to Tangible Assets):
|
||||||||||||||||||||||||
Consolidated
|
N/A | - | N/A | - | N/A | - | ||||||||||||||||||
Bank
|
230,109 | 19.56 | 23,530 | 2.00 | N/A | - |
December 31,
|
||||||||
2010
|
2009
|
|||||||
(In thousands)
|
||||||||
Consolidated GAAP capital
|
$ | 221,245 | $ | 247,299 | ||||
Unrealized losses on certain available for sale
|
||||||||
securities, net of tax
|
3,774 | 913 | ||||||
Unrealized losses on defined benefit pension plan
|
1,742 | 1,352 | ||||||
Disallowed deferred tax asset
|
(2,423 | ) | - | |||||
Tier 1 capital
|
224,338 | 249,564 | ||||||
Plus: allowance for loan losses
|
6,934 | 7,645 | ||||||
Total regulatory capital
|
$ | 231,272 | $ | 257,209 |
Years Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
(In thousands)
|
||||||||||||
Current tax provision:
|
||||||||||||
Federal
|
$ | 302 | $ | 1,213 | $ | 2,774 | ||||||
State
|
121 | 166 | 119 | |||||||||
Total
|
423 | 1,379 | 2,893 | |||||||||
Deferred tax (benefit) provision:
|
||||||||||||
Federal
|
(387 | ) | (108 | ) | (1,153 | ) | ||||||
State
|
(2 | ) | (4 | ) | 55 | |||||||
Total
|
(389 | ) | (112 | ) | (1,098 | ) | ||||||
Total
|
$ | 34 | $ | 1,267 | $ | 1,795 |
Years Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
Statutory federal income tax rate
|
34.0 | % | 34.0 | % | 34.0 | % | ||||||
Increase (decrease) resulting from:
|
||||||||||||
State taxes, net of federal tax benefit
|
2.6 | 1.6 | 1.3 | |||||||||
Tax exempt income
|
(17.0 | ) | (7.1 | ) | (5.8 | ) | ||||||
Bank-owned life insurance
|
(17.0 | ) | (7.7 | ) | (5.7 | ) | ||||||
Dividends received deduction
|
- | - | (0.1 | ) | ||||||||
Other, net
|
(1.5 | ) | (2.0 | ) | (2.5 | ) | ||||||
Effective tax rate
|
1.1 | % | 18.8 | % | 21.2 | % |
December 31,
|
||||||||
2010
|
2009
|
|||||||
(In thousands)
|
||||||||
Net unrealized loss on securities available for sale
|
$ | 1,968 | $ | 742 | ||||
Defined benefit plan
|
896 | 695 | ||||||
Allowance for loan losses
|
2,357 | 2,599 | ||||||
Employee benefit and share-based compensation plans
|
2,327 | 2,094 | ||||||
Other-than-temporary impairment write-down
|
581 | 531 | ||||||
Other
|
682 | 334 | ||||||
Net deferred tax asset
|
$ | 8,811 | $ | 6,995 |
Years Ended December 31,
|
||||||||
2010
|
2009
|
|||||||
(In thousands)
|
||||||||
Balance, beginning of year
|
$ | 17,626 | $ | 15,539 | ||||
Principal distributions
|
187 | 4,061 | ||||||
Repayments of principal
|
(2,503 | ) | (1,974 | ) | ||||
Balance, end of year
|
$ | 15,310 | $ | 17,626 |
December 31,
|
||||||||
2010
|
2009
|
|||||||
(In thousands)
|
||||||||
Commitments to extend credit:
|
||||||||
Unused lines of credit
|
$ | 80,378 | $ | 78,173 | ||||
Loan commitments
|
6,637 | 13,482 | ||||||
Existing construction loan agreements
|
217 | 882 | ||||||
Standby letters of credit
|
3,032 | 3,745 |
Year Ending
December 31,
|
Amount
|
|||
(In thousands)
|
||||
2011
|
$ | 565 | ||
2012
|
473 | |||
2013
|
466 | |||
2014
|
463 | |||
2015
|
435 | |||
Thereafter
|
10,137 | |||
$ | 12,539 |
December 31, 2010
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Securities available for sale:
|
(In thousands)
|
|||||||||||||||
Mutual funds
|
$ | 5,272 | $ | 1,641 | $ | - | $ | 6,913 | ||||||||
Common and preferred stock
|
47 | - | - | 47 | ||||||||||||
Government-sponsored enterprise obligations
|
- | 17,864 | - | 17,864 | ||||||||||||
State and municipal bonds
|
- | 43,077 | - | 43,077 | ||||||||||||
Government sponsored residential mortgage-backed securities
|
- | 380,984 | - | 380,984 | ||||||||||||
U.S. government guaranteed residential mortgage-backed securities
|
- | 187,676 | - | 187,676 | ||||||||||||
Private label residential mortgage-backed securities
|
- | 7,578 | - | 7,578 | ||||||||||||
Total assets
|
$ | 5,319 | $ | 638,820 | $ | - | $ | 644,139 |
December 31, 2009 | ||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
(In thousands) | ||||||||||||||||
Securities available for sale:
|
||||||||||||||||
Mutual funds
|
$ | 5,037 | $ | 1,452 | $ | - | $ | 6,489 | ||||||||
Common and preferred stock
|
59 | - | - | 59 | ||||||||||||
Government-sponsored enterprise obligations
|
- | 10,698 | - | 10,698 | ||||||||||||
State and municipal
|
- | 2,070 | - | 2,070 | ||||||||||||
Government-sponsored residential mortgage-backed securities
|
- | 290,248 | - | 290,248 | ||||||||||||
U.S. government guaranteed residential mortgage-backed securities
|
- | 1,047 | - | 1,047 | ||||||||||||
Private-label residential mortgage-backed
|
- | 8,510 | - | 8,510 | ||||||||||||
Total assets
|
$ | 5,096 | $ | 314,025 | $ | - | $ | 319,121 |
At
|
Year Ended
|
|||||||||||||||
December 31, 2010
|
December 31, 2010
|
|||||||||||||||
Total
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Gains (Losses)
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Impaired loans
|
$ | - | $ | - | $ | 1,661 | $ | (714 | ) | |||||||
Other real estate owned
|
- | - | 223 | (157 | ) | |||||||||||
Total assets
|
$ | - | $ | - | $ | 1,884 | $ | (871 | ) | |||||||
At
|
Year Ended
|
|||||||||||||||
December 31, 2009
|
December 31, 2009
|
|||||||||||||||
Total
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Gains (Losses)
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Impaired loans
|
$ | - | $ | - | $ | 3,575 | $ | (875 | ) | |||||||
Total assets
|
$ | - | $ | - | $ | 3,575 | $ | (875 | ) |
2010
|
2009
|
|||||||||||||||
Carrying
|
Estimated
|
Carrying
|
Estimated
|
|||||||||||||
Value
|
Fair Value
|
Value
|
Fair Value
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Assets:
|
||||||||||||||||
Cash and cash equivalents
|
$ | 11,611 | $ | 11,611 | $ | 28,719 | $ | 28,719 | ||||||||
Securities:
|
||||||||||||||||
Available for sale
|
644,139 | 644,139 | 319,121 | 319,121 | ||||||||||||
Held to maturity
|
- | - | 295,011 | 303,619 | ||||||||||||
Federal Home Loan Bank of Boston
|
||||||||||||||||
and other restricted stock
|
12,251 | 12,251 | 10,339 | 10,339 | ||||||||||||
Loans - net
|
502,392 | 505,791 | 469,149 | 474,554 | ||||||||||||
Accrued interest receivable
|
4,279 | 4,279 | 5,198 | 5,198 | ||||||||||||
Liabilities:
|
||||||||||||||||
Deposits
|
700,335 | 697,815 | 647,975 | 649,473 | ||||||||||||
Short-term borrowings
|
62,937 | 62,936 | 74,499 | 74,499 | ||||||||||||
Long-term debt
|
238,151 | 243,800 | 213,845 | 214,669 | ||||||||||||
Accrued interest payable
|
720 | 720 | 730 | 730 |
December 31,
|
||||||||
2010
|
2009
|
|||||||
(In thousands)
|
||||||||
ASSETS:
|
||||||||
Due from banks
|
$ | 1,236 | $ | 5,237 | ||||
Federal funds sold
|
3 | - | ||||||
Securities held to maturity
|
- | 1,917 | ||||||
Securities available for sale
|
4,544 | 8,130 | ||||||
Investment in subsidiaries
|
210,886 | 227,680 | ||||||
Other assets
|
4,633 | 4,371 | ||||||
TOTAL ASSETS
|
221,302 | 247,335 | ||||||
LIABILITIES AND EQUITY:
|
||||||||
Liabilities
|
57 | 36 | ||||||
Equity
|
221,245 | 247,299 | ||||||
TOTAL LIABILITIES AND EQUITY
|
$ | 221,302 | $ | 247,335 |
Years Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
(In thousands)
|
||||||||||||
INCOME (LOSS):
|
||||||||||||
Dividends from subsidiaries
|
$ | 19,500 | $ | 9,078 | $ | - | ||||||
Interest income from securities
|
247 | 1,499 | 2,231 | |||||||||
Interest income from federal funds sold
|
- | 4 | 290 | |||||||||
(Loss) gain on sale of securities, net
|
(22 | ) | (2,079 | ) | 303 | |||||||
Other income
|
2 | 6 | 9 | |||||||||
Total income
|
19,727 | 8,508 | 2,833 | |||||||||
OPERATING EXPENSE:
|
||||||||||||
Salaries and employee benefits
|
2,710 | 3,100 | 2,857 | |||||||||
Other
|
426 | 470 | 491 | |||||||||
Total operating expense
|
3,136 | 3,570 | 3,348 | |||||||||
INCOME (LOSS) BEFORE EQUITY IN UNDISTRIBUTED
|
||||||||||||
INCOME OF SUBSIDIARIES AND INCOME TAXES
|
16,591 | 4,938 | (515 | ) | ||||||||
EQUITY IN UNDISTRIBUTED (LOSS) INCOME OF
|
||||||||||||
SUBSIDIARIES
|
(13,600 | ) | (767 | ) | 7,144 | |||||||
NET INCOME BEFORE TAXES
|
2,991 | 4,171 | 6,629 | |||||||||
INCOME TAX BENEFIT
|
(15 | ) | (1,288 | ) | (62 | ) | ||||||
NET INCOME
|
$ | 3,006 | $ | 5,459 | $ | 6,691 |
Years Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
(In thousands)
|
||||||||||||
OPERATING ACTIVITIES:
|
||||||||||||
Net Income
|
$ | 3,006 | $ | 5,459 | $ | 6,691 | ||||||
Undistributed equity in subsidiaries
|
13,600 | 767 | (7,144 | ) | ||||||||
Net amortization of premiums and discounts on securities
|
14 | 39 | 10 | |||||||||
Net realized securities losses (gains)
|
22 | 2,079 | (303 | ) | ||||||||
Change in other liabilities
|
21 | (92 | ) | 1 | ||||||||
Change in other assets
|
367 | (789 | ) | 414 | ||||||||
Other, net
|
2,110 | 2,610 | 2,327 | |||||||||
Net cash provided by operating activities
|
19,140 | 10,073 | 1,996 | |||||||||
INVESTING ACTIVITIES:
|
||||||||||||
Purchase of securities
|
- | (5,276 | ) | - | ||||||||
Proceeds from principal collections
|
1,160 | 10,509 | 5,331 | |||||||||
Sale of securities
|
4,264 | 4,394 | 18,414 | |||||||||
Net cash provided by investing activities
|
5,424 | 9,627 | 23,745 | |||||||||
FINANCING ACTIVITIES:
|
||||||||||||
Cash dividends paid
|
(14,295 | ) | (14,595 | ) | (17,945 | ) | ||||||
Common stock repurchased
|
(16,127 | ) | (13,690 | ) | (10,483 | ) | ||||||
Excess tax benefit from share-based compensation
|
383 | 155 | 334 | |||||||||
Issuance of common stock in connection with stock
|
||||||||||||
option exercises
|
1,477 | 449 | 1,901 | |||||||||
Net cash used in financing activities
|
(28,562 | ) | (27,681 | ) | (26,193 | ) | ||||||
DECREASE IN CASH AND CASH EQUIVALENTS
|
(3,998 | ) | (7,981 | ) | (452 | ) | ||||||
CASH AND CASH EQUIVALENTS:
|
||||||||||||
Beginning of year
|
5,237 | 13,218 | 13,670 | |||||||||
End of year
|
$ | 1,239 | $ | 5,237 | $ | 13,218 |
2010
|
||||||||||||||||
First Quarter
|
Second Quarter
|
Third Quarter
|
Fourth Quarter
|
|||||||||||||
(Dollars in thousands, except per share amounts)
|
||||||||||||||||
Interest and dividend income
|
$ | 11,955 | $ | 11,595 | $ | 11,550 | $ | 11,047 | ||||||||
Interest expense
|
4,264 | 4,171 | 4,201 | 4,129 | ||||||||||||
Net interest and dividend income
|
7,691 | 7,424 | 7,349 | 6,918 | ||||||||||||
Provision for loan losses
|
500 | 4,120 | 3,928 | 375 | ||||||||||||
Noninterest income
|
867 | 878 | 836 | 883 | ||||||||||||
Total other-than-temporary impairment losses in securities
|
(1,071 | ) | - | - | (490 | ) | ||||||||||
Portion of impairment losses recognized in accumulated other comprehensive loss
|
971 | - | - | 443 | ||||||||||||
Net impairment losses recognized in income
|
(100 | ) | - | - | (47 | ) | ||||||||||
Loss on sales of premises and equipment, net
|
- | - | - | - | ||||||||||||
Loss on prepayment of borrowings
|
- | - | - | - | ||||||||||||
Loss on disposal of OREO
|
7 | (6 | ) | - | - | |||||||||||
Gain (loss) on sales of securities, net
|
186 | 1,132 | 2,609 | 145 | ||||||||||||
Noninterest expense
|
6,395 | 5,941 | 6,184 | 6,289 | ||||||||||||
Income before income taxes
|
1,756 | (633 | ) | 682 | 1,235 | |||||||||||
Income taxes
|
402 | (247 | ) | (17 | ) | (104 | ) | |||||||||
Net income
|
$ | 1,354 | $ | (386 | ) | $ | 699 | $ | 1,339 | |||||||
Basic earnings per share
|
$ | 0.05 | $ | (0.01 | ) | $ | 0.03 | $ | 0.04 | |||||||
Diluted earnings per share
|
$ | 0.05 | $ | (0.01 | ) | $ | 0.03 | $ | 0.04 | |||||||
2009 | ||||||||||||||||
First Quarter
|
Second Quarter
|
Third Quarter
|
Fourth Quarter
|
|||||||||||||
(Dollars in thousands, except per share amounts)
|
||||||||||||||||
Interest and dividend income
|
$ | 13,102 | $ | 12,975 | $ | 13,298 | $ | 13,155 | ||||||||
Interest expense
|
5,084 | 5,169 | 5,056 | 4,713 | ||||||||||||
Net interest and dividend income
|
8,018 | 7,806 | 8,242 | 8,442 | ||||||||||||
Provision for loan losses
|
1,150 | 590 | 620 | 1,540 | ||||||||||||
Noninterest income
|
1,060 | 1,098 | 951 | 967 | ||||||||||||
Total other-than-temporary impairment losses in securities
|
- | - | (1,343 | ) | (411 | ) | ||||||||||
Portion of impairment losses recognized in accumulated other comprehensive loss
|
- | - | 1,157 | 319 | ||||||||||||
Net impairment losses recognized in income
|
- | - | (186 | ) | (92 | ) | ||||||||||
Loss on sales of premises and equipment, net
|
(8 | ) | - | - | - | |||||||||||
Loss on prepayment of borrowings
|
- | (142 | ) | - | - | |||||||||||
Loss on disposal of OREO
|
- | - | (110 | ) | - | |||||||||||
Gain (loss) on sales of securities, net
|
87 | 122 | (774 | ) | 182 | |||||||||||
Noninterest expense
|
6,408 | 7,007 | 6,064 | 5,558 | ||||||||||||
Income before income taxes
|
1,599 | 1,287 | 1,439 | 2,401 | ||||||||||||
Income taxes
|
394 | 214 | 197 | 462 | ||||||||||||
Net income
|
$ | 1,205 | $ | 1,073 | $ | 1,242 | $ | 1,939 | ||||||||
Basic earnings per share
|
$ | 0.04 | $ | 0.04 | $ | 0.04 | $ | 0.07 | ||||||||
Diluted earnings per share
|
$ | 0.04 | $ | 0.04 | $ | 0.04 | $ | 0.06 |
|
Amendment No. 5
|
|
Employee Stock Ownership Plan
|
||
of
|
Document:
|
DC #3181992
|
Westfield Financial, Inc.
|
Draft Date:
|
12/14/10
|
Effective as of January 1, 2002
|
Board of Directors
|
|
Incorporating Amendment Nos. 1, 2, 3 and 4
|
Approval Date:
|
12/21/2010
|
I.
|
Article VIII – Section 8.2(c)(viii) of the Plan shall be amended, effective as of January 1, 2009, by adding the following sentence to the end thereof:
|
II.
|
Article X – Section 10.3 of the Plan shall be amended, effective as of March 1, 2006, in its entirety to read as follows:
|
WESTFIELD FINANCIAL, INC.
|
|
By: ________________________________
|
|
Name
|
Jurisdiction of Incorporation
|
||
Westfield Bank
|
United States (federally chartered savings bank)
|
||
WFD Securities, Inc.
|
Massachusetts
|
Name
|
Jurisdiction of Incorporation
|
||
Elm Street Securities Corporation
|
Massachusetts
|
||
WB Real Estate Holdings, LLC
|
Massachusetts
|
|
1.
|
I have reviewed this year end report on Form 10-K of Westfield Financial, Inc. (“Westfield Financial”);
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of Westfield Financial as of, and for, the periods presented in this report;
|
|
4.
|
Westfield Financial’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for Westfield Financial and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to Westfield Financial, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of Westfield Financial’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in Westfield Financial’s internal control over financial reporting that occurred during Westfield Financial’s fourth fiscal quarter that has materially affected, or is reasonably
likely to materially affect, Westfield Financial’s internal control over financial reporting; and
|
|
5.
|
Westfield Financial’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to Westfield Financial’s auditors and the audit committee of Westfield Financial’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect Westfield Financial’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in Westfield Financial’s internal control over financial reporting.
|
Date: March 11, 2011 | /s/ James C. Hagan | ||
James C. Hagan | |||
Chief Executive Officer and President | |||
(Principal Executive Officer) |
1.
|
I have reviewed this year end report on Form 10-K of Westfield Financial, Inc. (“Westfield Financial”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of Westfield Financial as of, and for, the periods presented in this report;
|
4.
|
Westfield Financial’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for Westfield Financial and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to Westfield Financial, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of Westfield Financial’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in Westfield Financial’s internal control over financial reporting that occurred during Westfield Financial’s fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, Westfield Financial’s internal control over financial reporting; and
|
5.
|
Westfield Financial’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to Westfield Financial’s auditors and the audit committee of Westfield Financial’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect Westfield Financial’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in Westfield Financial’s internal control over financial reporting.
|
Date: March 11, 2011 |
/s/ Leo R. Sagan, Jr.
|
||
Leo R. Sagan, Jr.
|
|||
Chief Financial Officer and Treasurer
|
|||
(Principal Financial Officer) |
A)
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)) and
|
B)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Westfield Financial as of the dates and for the periods covered by the Report.
|
Date: March 11, 2011 | /s/ James C. Hagan | ||
James C. Hagan | |||
Chief Executive Officer and President | |||
(Principal Executive Officer) |
A)
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)) and
|
B)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Westfield Financial as of the dates and for the periods covered by the Report.
|
Date: March 11, 2011 |
/s/ Leo R. Sagan, Jr.
|
||
Leo R. Sagan, Jr.
|
|||
Chief Financial Officer and Treasurer
|
|||
(Principal Financial Officer) |
BDS1D4`+12;AZTM`''>(_P#DH_@G_>OO_1-=C7'>(_\`
MDH_@G_>OO_1-=5
!;:^\2^*M3EM9'D"6MN$BW!6((D?:2X)
M'0UZ19>&I=.M4M;'6;NVMD&$BAM[954?01?Y]Z`,I/!=WKCK<>,M0^W@'KVQ/0^J'@]L&@#NJ*
MSM&US3M>TU+[3;@30GY2,89&'567JK#N#S6C0`4444`%%%%`!11534-4L-*M
M'N]0O(+6W3[TDT@11^)H`M9`ZTC.J@EB``,G/85QO_"9W^ML4\):)->H>/[0
MO