Note 12 - Stockholders' Equity

12 Months Ended

Dec. 31, 2011

Stockholders' Equity Note Disclosure [Text Block]

12. Stockholders’ Equity

Preferred Stock and Dividend Restrictions on the Company:

On December 19, 2008, pursuant to a Purchase Agreement, under the Troubled Asset Relief Program (“TARP”), the Company issued to the U.S. Department of the Treasury (the “U.S. Treasury”) for aggregate consideration of $70.0 million (i) 70,000 shares of the Company’s Fixed Rate Cumulative Perpetual Preferred Stock Series B (the “Series B Preferred Stock”), par value $0.01 per share and liquidation preference $1,000 per share, and (ii) a Warrant to purchase up to 751,611 shares of the Company’s common stock, par value $0.01 per share, at an initial price of $13.97 per share. Pursuant to the terms of the Purchase Agreement, the Company’s ability to declare or pay dividends on any of its shares was limited. Specifically, the Company was unable to declare dividend payments on common, junior preferred or pari passu preferred shares if it was in arrears on the dividends on the Series B Preferred Stock. Further, the Company could not increase dividends on its common stock above the amount of the last quarterly cash dividend per share declared prior to October 14, 2008, or $0.13 per common share, without the U.S. Treasury’s approval until the third anniversary of the investment unless all of the Series B Preferred Stock has been redeemed or transferred. In addition, the Company’s ability to repurchase its common shares was restricted. U.S. Treasury consent generally was required for any stock repurchase until the third anniversary of the investment by the U.S. Treasury unless all of the Series B Preferred Stock has been redeemed or transferred. Further, common, junior preferred or pari passu preferred shares could not be repurchased if the Company was in arrears on the Series B Preferred Stock dividends.

The proceeds from issuance of these securities were allocated to the Series B Preferred Stock and to the Warrant based on their relative fair values, which resulted in an initial book value of $68.6 million for the Series B Preferred Stock and $1.4 million for the Warrant. The resulting discount for the Series B Preferred Stock was to be accreted over five years through retained earnings as a preferred stock dividend. The Warrant was to remain in additional paid-in-capital at its initial book value until it was exercised or expired.

The redemption of the Series B Preferred Stock on October 28, 2009 removed the restrictions on the Company’s ability to declare and pay dividends or repurchase its common stock. The unamortized discount related to the Series B Preferred Stock was charged to retained earnings on its redemption date.

Issuance of Common Stock:

On September 22, 2009, the Company completed a public offering for 8,317,400 shares of common stock at a price of $11.50 per share. On October 1, 2009, the underwriters exercised their over-allotment option to purchase an additional 1,012,610 common shares at $11.50 per share. The net proceeds of the offering after deducting underwriting discounts and commissions and offering expenses were $101.5 million.

Redemption of Preferred Stock

The common stock offering discussed above was a Qualified Equity Offering. As a result of this Qualified Equity Offering, the number of shares of Common Stock underlying the warrant issued to the U.S. Treasury was reduced by one-half. On October 28, 2009, the Company redeemed the Series B Preferred Stock for $70.0 million plus all accrued and unpaid dividends. On December 30, 2010, the Company repurchased the Warrant for $0.9 million.

Other Dividend Restrictions on the Savings Bank:

In connection with the Savings Bank’s conversion from mutual to stock form in November 1995, a special liquidation account was established at the time of conversion, in accordance with the requirements of our primary regulator, which was equal to its capital as of June 30, 1995. The liquidation account is reduced as and to the extent that eligible account holders have reduced their qualifying deposits. Subsequent increases in deposits do not restore an eligible account holder’s interest in the liquidation account. In the event of a complete liquidation of the Savings Bank, each eligible account holder will be entitled to receive a distribution from the liquidation account in an amount proportionate to the current adjusted qualifying balances for accounts then held. As of December 31, 2011, the Savings Bank’s liquidation account was $1.5 million, and was presented within retained earnings.

In addition to the restriction described above, Federal banking regulations place certain restrictions on dividends paid by the Savings Bank to the Holding Company. The total amount of dividends which may be paid at any date is generally limited to the net income of the Savings Bank for the current year and prior two years, less any dividends previously paid from those earnings. As of December 31, 2011, the Savings Bank had $73.0 million in retained earnings available to distribute to the Holding Company in the form of cash dividends.

In addition, dividends paid by the Savings Bank to the Holding Company would be prohibited if the effect thereof would cause the Savings Bank’s capital to be reduced below applicable minimum capital requirements.

Stockholder Rights Plan:

The Holding Company has adopted a Shareholder Rights Plan under which each stockholder has one right to purchase from the Holding Company, for each share of common stock owned, one one-hundredth of a share of Series A junior participating preferred stock at a price of $65. The rights will become exercisable only if a person or group acquires 15% or more of the Holding Company’s common stock or commences a tender or exchange offer which, if consummated, would result in that person or group owning at least 15% of the Common Stock (the “acquiring person or group”). In such case, all stockholders other than the acquiring person or group will be entitled to purchase, by paying the $65 exercise price, Common Stock (or a common stock equivalent) with a value of twice the exercise price. In addition, at any time after such event, and prior to the acquisition by any person or group of 50% or more of the Common Stock, the Board of Directors may, at its option, require each outstanding right (other than rights held by the acquiring person or group) to be exchanged for one share of Common Stock (or one common stock equivalent). If a person or group becomes an acquiring person and the Holding Company is acquired in a merger or other business combination or sells more than 50% of its assets or earning power, each right will entitle all other holders to purchase, by payment of $65 exercise price, common stock of the acquiring company with a value of twice the exercise price. The rights plan expires on September 30, 2016.

Treasury Stock Transactions:

The Holding Company repurchased 624,088 common shares at an average cost of $11.72 during the year ended December 31, 2011. The Holding Company did not repurchase any common shares during the year ended December 31, 2010. At December 31, 2011, 737,962 shares remain to be repurchased under the current stock repurchase program. Stock will be purchased under the current stock repurchase program from time to time, in the open market or through private transactions, subject to market conditions. There is no expiration or maximum dollar amount under this authorization.

Accumulated Other Comprehensive Income (Loss):

The components of accumulated other comprehensive loss at December 31, 2011 and 2010 and the changes during the year ended December 31, 2011 are as follows:

	December 31, 2011			Other Comprehensive Income			December 31, 2010
	(In thousands)
Net unrealized gain on securities available for sale	$	11,679		$	10,776		$	903
Net actuarial loss on pension plans and other postretirement benefits		(7,216	)		(2,194	)		(5,022	)
Prior service (cost) credit on pension plans and other postretirement benefits		350			(25	)		375
Accumulated other comprehensive loss	$	4,813		$	8,557		$	(3,744	)

Shelf Registration Statement:

On November 26, 2008, the Company filed a shelf registration statement which allows the Company to periodically offer and sell, individually or in any combination, preferred stock, common stock, warrants to purchase preferred or common stock, and debt securities, up to a total of $170.0 million. The shelf registration was declared effective on January 8, 2009. The Company’s ability to issue debt or equity under this shelf registration is subject to market conditions and its capital needs. The common shares issued during 2009 were issued under this shelf registration statement. The preferred shares and warrants to purchase common stock the Company issued to the U.S. Treasury were registered under a separate shelf registration.

Following the issuance of common shares during 2009, the Company had the ability to periodically offer and sell, individually or in any combination, preferred stock, common stock, warrants to purchase preferred or common stock, and debt securities up to $62.7 million. On November 18, 2010, the Company filed a shelf registration statement to bring the amount to allow the Company to periodically offer and sell, individually or in any combination, preferred stock, common stock, warrants to purchase preferred or common stock, and debt securities, back up to a total of $170.0 million.