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UNDER
THE SECURITIES ACT OF 1933
Connecticut (State or Other Jurisdiction of Incorporation or Organization) | 6712 (Primary Standard Industrial Classification Code Number) | 27-3577029 (I.R.S. Employer Identification Number) |
Rockville, CT 06066
(860) 291-3600
(Address and telephone of registrant’s principal executive offices)
President and Chief Executive Officer
Rockville Financial New, Inc.
25 Park Street
Rockville, CT 06066
(860) 291-3600
(Address and telephone number of registrant’s agent for service)
Robert J. Metzler II, Esq.
Hinckley, Allen & Snyder LLP
20 Church Street
Hartford, CT 06103
(860) 725-6200
Large accelerated filer o | Accelerated filer þ | Non-accelerated filer o | Smaller reporting company o |
Proposed Maximum | Proposed Maximum | Amount of | ||||||||||||
Title of Each Class of | Amount | Offering | Aggregate | Registration | ||||||||||
Securities to be Registered | to be Registered | Price per Share | Offering Price(1) | Fee | ||||||||||
Common Stock, no par value per share | 29,504,891 shares(2) | $10.00 | $295,048,910 | $21,066.00 | ||||||||||
Participation interests | (2) | |||||||||||||
(1) | Estimated solely for the purpose of calculating the registration fee. |
(2) | The securities of Rockville Financial New, Inc. to be purchased by Rockville Bank 401(k) Plan are included in the amount shown for the common stock, and accordance with Rule 457(h) of the Securities Act of 1933, as amended, no separate fee is required for the registration of the participation interests. |
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Common Stock
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Employer’s | X | Your Compensation | ||
Discretionary Contribution | Total Compensation of All Participants Eligible to Share |
$20,000 | $25,000 | Or | $2,000 | |||||
$250,000 |
• | including your salary reduction contributions to any plan or arrangement maintained by your Employer (e.g., contributions to this Plan or to a cafeteria plan); and | |
• | excluding distributions from a plan of deferred compensation, amounts realized from the exercise of a stock option, or attributable to any other equity award. |
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December 31 | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Eaton Vance Large-Cap Value A | 17.01 | % | (34.47 | )% | 9.99 | % | ||||||
American Funds Growth Fund of America A | 34.48 | % | (39.07 | )% | 10.95 | % | ||||||
Columbia Acorn A | 39.26 | % | (38.72 | )% | 7.39 | % | ||||||
Davis New York Venture R | 31.56 | % | (40.23 | )% | 4.62 | % | ||||||
American Funds Fundamental Investors A | 33.36 | % | (39.70 | )% | 13.55 | % | ||||||
Frank Russell Life Points Equity Growth R2 | 30.76 | % | (42.11 | )% | 7.39 | % | ||||||
Oppenheimer Main St. Small Cap N | 36.55 | % | (38.41 | )% | (1.86 | )% | ||||||
Alliance Bernstein Small-Mid Cap Value A | 41.81 | % | (34.56 | )% | 2.32 | % | ||||||
Frank Russell Life Points Conservative R2 | 20.02 | % | (15.42 | )% | 5.41 | % | ||||||
Frank Russell Life Points Moderate R2 | 24.01 | % | (23.54 | )% | 6.47 | % | ||||||
American Funds American Balanced A | 21.08 | % | (25.73 | )% | 6.60 | % | ||||||
Frank Russell Life Points Balanced R2 | 26.65 | % | (29.94 | )% | 6.72 | % | ||||||
Frank Russell Life Points Growth R2 | 28.94 | % | (36.14 | )% | 6.98 | % | ||||||
Oppenheimer Global A | 39.20 | % | (41.03 | )% | 5.97 | % | ||||||
American Funds EuroPacific A | 39.10 | % | (40.53 | )% | 18.96 | % | ||||||
Columbia Intermediate Bond A | 18.82 | % | (6.03 | )% | 4.36 | % | ||||||
Oppenheimer International Bond N | 12.66 | % | (1.26 | )% | 13.29 | % | ||||||
Metropolitan Life Stable Value Fund(1) | 3.94 | % | 3.72 | % | 2.46 | % | ||||||
Rockville Financial, Inc. Common Stock Fund | (24.84 | )% | 14.51 | % | (31.65 | )% |
(1) | Performance results for the Metropolitan Life Stable Value Fund represent the actual net interest rate credited to Participant accounts. |
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• | 50% of your account balance; or | |
• | $50,000 reduced by the excess, if any, of your highest outstanding balance of loans from the Plan during the one-year period prior to the date of the loan over your current outstanding balance of loans. |
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• | The reallocation of existing account balances into or out of the Rockville Financial, Inc. Common Stock Fund. | |
• | Volitional cash withdrawals from the Rockville Financial, Inc. Common Stock Fund. | |
• | The resale of common stock of Rockville Financial, Inc. delivered from the Rockville Financial, Inc. Common Stock Fund to any such person. |
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Price: $10.00 per Share
Minimum | Midpoint | Maximum | Adjusted Maximum | |||||||||||||
Number of shares: | 11,050,000 | 13,000,000 | 14,950,000 | 17,192,500 | ||||||||||||
Gross offering proceeds: | $ | 110,500,000 | $ | 130,000,000 | $ | 149,500,000 | $ | 171,925,000 | ||||||||
Estimated offering expenses, excluding selling agent fees: | $ | 1,938,720 | $ | 1,938,720 | $ | 1,938,720 | $ | 1,938,720 | ||||||||
Selling agent fees(1): | $ | 4,095,125 | $ | 4,791,275 | $ | 5,487,425 | $ | 6,287,998 | ||||||||
Estimated net proceeds: | $ | 104,466,155 | $ | 123,270,005 | $ | 142,073,855 | $ | 163,698,282 | ||||||||
Estimated net proceeds per share: | $ | 9.45 | $ | 9.48 | $ | 9.50 | $ | 9.52 |
(1) | Includes: (i) a management fee payable by us to Keefe, Bruyette & Woods, Inc. of $30,000; (ii) fees payable by us to Keefe, Bruyette & Woods, Inc. in connection with the subscription and community offerings equal to 0.75% of the aggregate amount of common stock sold in the subscription and community offerings (net of insider purchases and shares purchased by our employee stock ownership plan and other tax-qualified employee stock benefit plans); and (iii) a fee payable by us of 5.5% of the aggregate dollar amount of common stock sold in the syndicated community offering to Keefe, Bruyette & Woods, Inc., which will be allocated to dealers in accordance with the actual number of shares of common stock sold by such dealers, assuming that 40.0% of the shares are sold in the subscription and community offerings and the remaining 60.0% of the shares are sold in the syndicated community offering. See “PRO FORMA DATA” and “THE CONVERSION AND OFFERING — Marketing Arrangements”. |
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• | remaining an independent community-oriented institution; |
• | continuing our emphasis on one-to-four family residential real estate lending; |
• | continuing our emphasis on commercial real estate lending; | |
• | increasing our emphasis on commercial business lending; | |
• | expanding our banking franchise; and | |
• | growing our deposit base. |
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Adjusted | ||||||||||||||||
Minimum | Midpoint | Maximum | Maximum | |||||||||||||
11,050,000 | 13,000,000 | 14,950,000 | 17,192,500 | |||||||||||||
Shares at | Shares at | Shares at | Shares at | |||||||||||||
$10.00 | $10.00 | $10.00 | $10.00 | |||||||||||||
per Share | per Share | per Share | per Share | |||||||||||||
(In thousands) | ||||||||||||||||
Gross offering proceeds | $ | 110,500 | $ | 130,000 | $ | 149,500 | $ | 171,925 | ||||||||
Less: offering expenses | 6,034 | 6,730 | 7,426 | 8,227 | ||||||||||||
Net offering proceeds | 104,466 | 123,270 | 142,074 | 163,698 | ||||||||||||
Distribution of net proceeds: | ||||||||||||||||
Proceeds contributed to Rockville Bank | 52,233 | 61,635 | 71,037 | 81,849 | ||||||||||||
Loan to employee stock ownership plan | 4,420 | 5,200 | 5,980 | 6,877 | ||||||||||||
Proceeds contributed to foundation | 3,134 | 3,698 | 4,262 | 4,911 | ||||||||||||
Proceeds retained by New Rockville Financial | $ | 44,679 | $ | 52,737 | $ | 60,795 | $ | 70,061 | ||||||||
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• | our historical, present and projected operating results and financial condition; | |
• | the economic, demographic and competition characteristics of our market area; | |
• | a comparative evaluation of our operating and financial statistics with those of other similarly-situated, publicly-traded savings and thrift holding companies; | |
• | the effect of the capital raised in this offering on our net worth and earnings potential; and | |
• | the trading market for our securities and comparable institutions and general economic conditions in the market for such securities. |
Total | ||||||||||
Ticker | Financial Institution | Exchange | Primary Market | Assets | ||||||
(In millions) | ||||||||||
PBNY | Provident New York Bancorp, Inc. of NY | NASDAQ | Montebello, NY | $ | 3,021 | |||||
BRKL | Brookline Bancorp, Inc. of MA | NASDAQ | Brookline, MA | 2,660 | ||||||
DNBK | Danvers Bancorp, Inc. of MA | NASDAQ | Danvers, MA | 2,631 | ||||||
OCFC | OceanFirst Financial Corp of NJ | NASDAQ | Toms River, NJ | 2,225 | ||||||
ESBF | ESB Financial Corp. of PA | NASDAQ | Ellwood City, PA | 1,939 | ||||||
UBNK | United Financial Bancorp, Inc. of MA | NASDAQ | W. Springfield, MA | 1,545 | ||||||
WFD | Westfield Financial Inc. of MA | NASDAQ | Westfield, MA | 1,253 | ||||||
ESSA | ESSA Bancorp, Inc. of PA | NASDAQ | Stroudsburg, PA | 1,072 | ||||||
BFED | Beacon Federal Bancorp Inc. of NY | NASDAQ | East Syracuse, NY | 1,059 | ||||||
NHTB | New Hampshire Thrift Bancshares Inc. of NH | NASDAQ | Newport, NH | 993 | ||||||
HIFS | Hingham Institution for Savings of MA | NASDAQ | Hingham, NH | 991 | ||||||
HARL | Harleysville Savings Financial Corp. of PA | NASDAQ | Harleysville, PA | 857 | ||||||
THRD | TF Financial Corp. of PA | NASDAQ | Newtown, PA | 703 |
• | average assets of $1.6 billion; |
• | average non-performing assets of 0.95% of total assets; |
• | average loans of 64.8% of total assets; |
• | average equity of 11.9% of total assets; and |
• | average net income of 0.66% of average assets. |
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Price-to- | Price-to- | Price-to- | ||||||||||
Earnings | Book Value | Tangible Book | ||||||||||
Multiple | Ratio | Value Ratio | ||||||||||
New Rockville Financial (on a pro forma basis, assuming completion of the conversion) | ||||||||||||
Minimum | 15.99 | 71.02 | 71.33 | |||||||||
Midpoint | 18.98 | 78.55 | 78.86 | |||||||||
Maximum | 22.02 | 85.25 | 85.62 | |||||||||
Adjusted Maximum | 25.58 | 92.08 | 92.42 | |||||||||
Valuation of peer group companies, all of which are fully converted (on an historical basis) | ||||||||||||
Average | 17.69 | 99.37 | 112.20 | |||||||||
Median | 14.84 | 101.65 | 120.66 |
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Maximum | ||||||||||||||||||||||||
Dilution | ||||||||||||||||||||||||
Number of Shares or Options to be Granted | Resulting | |||||||||||||||||||||||
As a | from | Fair Value of New Available | ||||||||||||||||||||||
Percentage | Issuance | Grants, in Thousands | ||||||||||||||||||||||
At | At Adjusted | of Common | of Shares | At | At Adjusted | |||||||||||||||||||
Minimum of | Maximum of | Stock to be | for Stock | Minimum of | Maximum of | |||||||||||||||||||
Offering | Offering | Issued in the | Benefit | Offering | Offering | |||||||||||||||||||
Range | Range | Offering | Plans(2) | Range | Range | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Employee stock ownership plan | 442,000 | 687,700 | 4.00 | % | 0.00 | % | $ | 4,420 | $ | 6,877 | ||||||||||||||
Restricted stock awards | 419,448 | 652,582 | 3.80 | 2.16 | 4,194 | 6,526 | ||||||||||||||||||
Stock options(1) | 1,048,619 | 1,631,455 | 9.49 | 5.24 | 3,974 | 6,183 | ||||||||||||||||||
Total | 1,910,067 | 2,971,737 | 17.29 | % | 7.19 | % | $ | 12,588 | $ | 19,586 | ||||||||||||||
(1) | For purposes of this table, fair value for stock awards is assumed to be the same as the offering price of $10.00 per share. The fair value of stock options has been estimated at $3.79 per option using the Black-Scholes option pricing model, adjusted for the exchange ratio, with the following assumptions: a grant-date share price and option exercise price of $10.00; an expected option life of five years; a dividend yield of 2.09%; an interest rate of 1.27%; and a volatility rate of 47.54%. The actual value of option grants will be determined by the grant-date fair value of the options, which will depend on a number of factors, including the valuation assumptions used in the option pricing model ultimately adopted. |
(2) | Represents the dilution of stock ownership interest. No dilution is reflected for the employee stock ownership plan because such shares are assumed to be purchased in the offering. |
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Percentage of | ||||||||||||||
Shares | ||||||||||||||
Shares at | Outstanding | |||||||||||||
Maximum of | Estimated Value of | After the | ||||||||||||
Existing and New Stock Benefit Plans | Participants | Offering Range | Shares | Conversion | ||||||||||
Employee Stock Ownership Plan: | ||||||||||||||
Shares purchased in 2005 offering(1) | Employees | 917,533 | (2) | $ | 9,175,328 | 3.58 | % | |||||||
Shares to be purchased in this offering | Employees | 598,000 | 5,980,000 | 2.33 | ||||||||||
Total employee stock ownership plan shares | Employees | 1,515,533 | $ | 15,155,328 | 5.91 | (2) | ||||||||
Restricted Stock Awards: | ||||||||||||||
2006 Stock Incentive Award Plan(1) | Directors, Officers and Employees | 458,767 | (3) | 4,587,671 | (4) | 1.79 | ||||||||
New shares of restricted stock | Directors, | 567,490 | 5,674,900 | 2.21 | ||||||||||
Officers and Employees | ||||||||||||||
Total shares of restricted stock | Directors, | 1,026,257 | $ | 10,262,571 | 4.00 | |||||||||
Officers and Employees | ||||||||||||||
Stock Options: | ||||||||||||||
2006 Stock Incentive Award Plan(1) | Directors, Officers and Employees | 1,146,918 | (5) | 2,328,243 | (6) | 4.47 | ||||||||
New stock options | Directors, | 1,418,725 | 2,880,012 | 5.53 | ||||||||||
Officers and Employees | ||||||||||||||
Total stock options | Directors, | 2,565,643 | $ | 5,208,255 | 10.00 | |||||||||
Officers and Employees | ||||||||||||||
Total of Stock Benefit Plans(7) | 5,107,433 | $ | 30,626,153 | 19.91 | % | |||||||||
(1) | The number of shares indicated has been adjusted for the 1.3114 exchange ratio at the maximum of the offering range. The valuation and ownership ratios reflect the dilutive impact of Rockville Financial MHC’s assets upon completion of the conversion. See “IMPACT OF ROCKVILLE FINANCIAL MHC’S ASSETS ON MINORITY STOCK OWNERSHIP” for more information regarding the dilutive impact of Rockville Financial MHC’s assets on the valuation and ownership ratios. |
(2) | As of September 30, 2010, 458,767 shares (349,830 shares prior to adjustment for the exchange ratio at the maximum of the offering range), or 1.79% of the shares outstanding after the conversion, have been allocated. |
(3) | As of September 30, 2010, 87,503 restricted shares (66,725 shares prior to adjustment for the exchange ratio at the maximum of the offering range) have been awarded, and remain unvested, and 41,843 restricted shares (31,907 shares prior to adjustment for the exchange ratio at the maximum of the offering range) remain available for future awards. As of September 30, 2010, 329,421 restricted shares (251,198 shares prior to adjustment for the exchange ratio at the maximum of the offering range) have vested, and the shares have been distributed. |
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(4) | The value of restricted stock awards is determined based on their fair value as of the date grants are made. For purposes of this table, the fair value of awards under the new stock benefit plan is assumed to be the same as the offering price of $10.00 per share. | |
(5) | As of September 30, 2010, options to purchase 584,720 shares, or 445,875 shares prior to adjustment for the exchange were outstanding, and 546,460 options, or 416,700 options prior to adjustment for the exchange remain available for future grants. At September 30, 2010, 369,055 unexercised and fully vested options were outstanding under this plan prior to adjustment for the exchange. | |
(6) | The weighted-average fair value of stock options has been estimated at $3.79 per option, adjusted for the exchange rate, using the Black-Scholes option pricing model. | |
(7) | Based on the Plan’s assets as of September 30, 2010 the Rockville Bank 401(k) Plan also has a second priority right to purchase up to 740,898 shares of common stock in the offering. |
1,631,455 | ||||||||||||||||||||
1,048,619 | 1,233,628 | 1,418,725 | Options at | |||||||||||||||||
Grant-Date | Options at | Options at | Options at | Adjusted | ||||||||||||||||
Fair Value per | Minimum of | Midpoint of | Maximum of | Maximum of | ||||||||||||||||
Exercise Price | Option | Range | Range | Range | Range | |||||||||||||||
$8.00 | 1.62 | 1,698,763 | 1,998,477 | 2,298,335 | 2,642,957 | |||||||||||||||
$10.00 | 2.03 | 2,128,697 | 2,504,265 | 2,880,012 | 3,311,854 | |||||||||||||||
$12.00 | 2.44 | 2,558,630 | 3,010,052 | 3,461,689 | 3,980,750 | |||||||||||||||
$14.00 | 2.84 | 2,978,078 | 3,503,504 | 4,029,179 | 4,633,332 |
567,490 | 652,580 | |||||||||||||||
419,450 | 493,450 | Shares Awarded at | Shares Awarded at | |||||||||||||
Shares Awarded at | Shares Awarded at | Maximum of | Adjusted | |||||||||||||
Share Price | Minimum of Range | Midpoint of Range | Range | Maximum of Range | ||||||||||||
$8.00 | 3,355,600 | 3,947,600 | 4,539,920 | 5,220,640 | ||||||||||||
$10.00 | 4,194,500 | 4,934,500 | 5,674,900 | 6,525,800 | ||||||||||||
$12.00 | 5,033,400 | 5,921,400 | 6,809,880 | 7,830,960 | ||||||||||||
$14.00 | 5,872,300 | 6,908,300 | 7,944,860 | 9,136,120 |
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Shares of | ||||||||||||||||||||||||||||||||||||
Common | ||||||||||||||||||||||||||||||||||||
Shares of New Rockville | Stock to be | |||||||||||||||||||||||||||||||||||
Financial to be Issued | Issued in | Equivalent Pro | Shares to be | |||||||||||||||||||||||||||||||||
Shares to be Sold in | for Shares of Existing | Conversion | Forma Book | Received for | ||||||||||||||||||||||||||||||||
This Offering | Rockville Financial | and | Exchange | Equivalent per | Value Per | 100 Existing | ||||||||||||||||||||||||||||||
Amount | Percent | Amount | Percent | Offering(1) | Ratio | Share Value(2) | Exchanged Share | Shares | ||||||||||||||||||||||||||||
Minimum | 11,050,000 | 58.27 | % | 7,913,446 | 41.73 | % | 18,963,446 | 0.9693 | $ | 9.69 | $ | 13.65 | 97 | |||||||||||||||||||||||
Midpoint | 13,000,000 | 58.27 | 9,309,937 | 41.73 | 22,309,937 | 1.1404 | 11.40 | 14.52 | 114 | |||||||||||||||||||||||||||
Maximum | 14,950,000 | 58.27 | 10,706,427 | 41.73 | 25,656,427 | 1.3114 | 13.11 | 15.38 | 131 | |||||||||||||||||||||||||||
Adjusted Maximum | 17,192,500 | 58.27 | 12,312,391 | 41.73 | 29,504,891 | 1.5082 | 15.08 | 16.38 | 151 |
(1) | Valuation and ownership ratios reflect dilutive impact of Rockville Financial MHC’s assets upon completion of the conversion. See “IMPACT OF ROCKVILLE FINANCIAL MHC’S ASSETS ON MINORITY STOCK OWNERSHIP” for more information regarding the dilutive impact of Rockville Financial MHC’s assets on the valuation and ownership ratios. | |
(2) | Represents the value of shares of New Rockville Financial common stock received in the conversion by a holder of one share of Existing Rockville Financial common stock, at the exchange ratios assuming the price of $10.00 per share. |
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• | The minimum number of shares of common stock that may be purchased is 25. | |
• | The maximum number of shares of common stock that may be purchased by an individual or an individual, together with any of the following persons, cannot exceed 5.0% of the shares of common stock sold in the offering: |
• | a person who is related by blood or marriage to you and who lives in the same home as you; | |
• | corporations and organizations in which you are an officer or partner or have a 10.0% or more ownership interest; | |
• | trusts or other estates in which you have a substantial beneficial interest or for which you are a trustee or fiduciary; or | |
• | other persons who may be your associates or persons acting in concert with you. |
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• | increase the purchase and ownership limitations, subject to regulatory approval; | |
• | seek regulatory approval to extend the offering beyond the [Date 2] expiration date, provided that any such extension will require us to resolicit subscriptions received in the offering; and/or | |
• | increase the number of shares to be purchased by our employee stock ownership plan. |
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• | We shall sell at least the minimum number of shares of common stock offered; |
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• | The plan of conversion is approved by at least a majority of the outstanding shares of common stock of Existing Rockville Financial as of [the shareholder record date], including shares held by Rockville Financial MHC. Because Existing Rockville Financial MHC owns 56.7% of the outstanding shares of Existing Rockville Financial common stock, Rockville Financial MHC will have control over the outcome of this vote; |
• | The plan of conversion is approved by at least a majority of the outstanding shares of common stock of Existing Rockville Financial as of [the shareholder record date], excluding those shares held by Rockville Financial MHC; | |
• | We receive the final approval of the Connecticut Banking Commissioner to complete the conversion and the offering and receive no objection to the conversion and offering by the FDIC; and | |
• | We receive the final approval from the Federal Reserve Board for New Rockville Financial to become a bank holding company and own 100.0% of Rockville Bank’s capital stock. |
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• | 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. |
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• | Connecticut Banking Regulations. Connecticut banking regulations prohibit, for a period of three years following the completion of a conversion, the direct or indirect acquisition of more than 10.0% of any class of our equity securities without the prior approval of the Connecticut Banking Commissioner. | |
• | Certificate of Incorporation. Provisions of the certificate of incorporation and bylaws of New Rockville Financial may make it more difficult and expensive to pursue a takeover attempt that management opposes, even if the takeover is favored by a majority of our shareholders. These provisions also would make it more difficult to remove our current Board of Directors or management, or to elect new directors. Specifically, our certificate of incorporation prohibits for a period of five years following the completion of a conversion, subject to certain limitations, the direct or indirect acquisition of more than 10.0% of any class of our equity securities without the prior approval of the Connecticut Banking Commissioner. Additional provisions include the election of directors to staggered terms of four years, the prohibition of cumulative voting in the election of directors and the requirement that a director may be removed from office only upon the affirmative vote of at least two-thirds of the directors then in office or by the affirmative vote of the holders of at least 80.0% of the voting power of the issued and outstanding shares entitled to vote for the election of directors. Our bylaws also contain provisions |
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• | Issuance of stock options. We intend to adopt one or more stock benefit plans no earlier than six months after the completion of the conversion and offering, pursuant to which we will grant stock options to key employees and directors that will require payments to these persons in the event of a change in control of New Rockville Financial. These payments may have the effect of increasing the costs of acquiring New Rockville Financial, thereby discouraging future takeover attempts. | |
• | Employment and change in control agreements. Existing Rockville Financial has employment agreements with certain of its executive and other officers that will remain in effect following the stock offering. New Rockville Financial intends to enter into an employment agreement and change in control agreement with its new Chief Executive Officer and new Chief Operating Officer following the stock offering. These agreements may have the effect of increasing the costs of acquiring New Rockville Financial, thereby discouraging future takeover attempts. |
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OF EXISTING ROCKVILLE FINANCIAL AND SUBSIDIARY
At September 30, | At December 31, | |||||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | 2005 | |||||||||||||||||||
(Unaudited) | (Dollars in thousands) | |||||||||||||||||||||||
Selected Financial Condition Data: | ||||||||||||||||||||||||
Total assets | $ | 1,639,768 | $ | 1,571,134 | $ | 1,533,073 | $ | 1,327,012 | $ | 1,232,836 | $ | 1,056,169 | ||||||||||||
Available for sale securities | 126,143 | 102,751 | 141,250 | 136,372 | 132,467 | 129,049 | ||||||||||||||||||
Held to maturity securities | 15,431 | 19,074 | 24,138 | — | — | — | ||||||||||||||||||
Federal Home Loan Bank stock | 17,007 | 17,007 | 17,007 | 11,168 | 9,836 | 8,498 | ||||||||||||||||||
Loans receivable, net | 1,388,516 | 1,361,019 | 1,291,791 | 1,116,327 | 1,033,355 | 859,700 | ||||||||||||||||||
Cash and cash equivalents | 37,426 | 19,307 | 14,901 | 23,998 | 22,381 | 23,611 | ||||||||||||||||||
Deposits | 1,174,978 | 1,129,108 | 1,042,508 | 951,038 | 884,511 | 761,396 | ||||||||||||||||||
Mortgagors’ and investors’ escrow accounts | 3,191 | 6,385 | 6,077 | 5,568 | 5,320 | 4,794 | ||||||||||||||||||
Advances from the Federal Home Loan Bank | 276,428 | 263,802 | 322,882 | 201,741 | 178,110 | 130,867 | ||||||||||||||||||
Total stockholders’ equity | 165,139 | 157,428 | 145,777 | 156,373 | 155,064 | 150,905 | ||||||||||||||||||
Allowance for loan losses | 14,094 | 12,539 | 12,553 | 10,620 | 9,827 | 8,675 | ||||||||||||||||||
Non-performing loans(1) | 11,579 | 12,046 | 10,435 | 1,569 | 1,493 | 7,177 | (2) |
(1) | Non-performing loans include loans for which Rockville Bank does not accrue interest (non-accrual loans), loans 90 days past due and still accruing interest, and loans that have gone through troubled debt restructurings. | |
(2) | Balance includes a $4.9 million fully guaranteed United States Department of Agriculture loan that was past due 90 days and still accruing as of December 31, 2005 which was repaid in full in January 2006. |
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For the Nine Months | ||||||||||||||||||||||||||||
Ended September 30, | For the Years Ended December 31, | |||||||||||||||||||||||||||
2010 | 2009 | 2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||||||||
(Unaudited) | (In thousands) | |||||||||||||||||||||||||||
Selected Operating Data: | ||||||||||||||||||||||||||||
Interest and dividend income | $ | 56,630 | $ | 57,122 | $ | 76,062 | $ | 77,545 | $ | 73,877 | $ | 63,952 | $ | 48,600 | ||||||||||||||
Interest expense | 16,520 | 23,258 | 29,775 | 34,946 | 35,577 | 27,649 | 16,514 | |||||||||||||||||||||
Net interest income | 40,110 | 33,864 | 46,287 | 42,599 | 38,300 | 36,303 | 32,086 | |||||||||||||||||||||
Provision for loan losses | 3,114 | 1,303 | 1,961 | 2,393 | 749 | 1,681 | 2,700 | |||||||||||||||||||||
Net interest income after provision for loan losses | 36,996 | 32,561 | 44,326 | 40,206 | 37,551 | 34,622 | 29,386 | |||||||||||||||||||||
Non-interest income (loss) | 6,798 | 5,382 | 6,972 | (8,987 | ) | 5,194 | 4,625 | 4,076 | ||||||||||||||||||||
Non-interest expense | 28,903 | 27,661 | 36,631 | 33,762 | 30,301 | 29,025 | 24,616 | |||||||||||||||||||||
Contribution to charitable foundation | — | — | — | — | — | — | 3,887 | |||||||||||||||||||||
Income (loss) before income taxes | 14,891 | 10,282 | 14,667 | (2,543 | ) | 12,444 | 10,222 | 4,959 | ||||||||||||||||||||
Income tax expense (benefit) | 5,314 | 3,432 | 4,935 | (956 | ) | 4,116 | 3,368 | 1,533 | ||||||||||||||||||||
Net income (loss) | $ | 9,577 | $ | 6,850 | $ | 9,732 | $ | (1,587 | ) | $ | 8,328 | $ | 6,854 | $ | 3,426 | |||||||||||||
For the | ||||||||||||||||||||||||||||
Period | ||||||||||||||||||||||||||||
For the | May 20, | |||||||||||||||||||||||||||
Nine Months | 2005 to | |||||||||||||||||||||||||||
Ended September 30, | For the Years Ended December 31, | December 31, | ||||||||||||||||||||||||||
2010 | 2009 | 2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||||||||
(Unaudited) | (Dollars in thousands except per share data) | |||||||||||||||||||||||||||
Net income (loss)(1) | $ | 9,577 | $ | 6,850 | $ | 9,732 | $ | (1,587 | ) | $ | 8,328 | $ | 6,854 | $ | 1,669 | |||||||||||||
Earnings per share(1) | ||||||||||||||||||||||||||||
Basic | $ | 0.52 | $ | 0.37 | $ | 0.53 | $ | (0.09 | ) | $ | 0.44 | $ | 0.36 | $ | 0.09 | |||||||||||||
Diluted | $ | 0.52 | $ | 0.37 | $ | 0.53 | $ | (0.09 | ) | $ | 0.44 | $ | 0.36 | $ | 0.09 | |||||||||||||
Dividends per share | $ | 0.18 | $ | 0.15 | $ | 0.20 | $ | 0.20 | $ | 0.16 | $ | 0.08 | $ | — | ||||||||||||||
(1) | The earnings for the period prior to the mutual holding company reorganization which was completed on May 20, 2005, were excluded when calculating the earnings per share since shares of common stock were not issued until May 20, 2005. |
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At or for the | ||||||||||||||||||||||||||||
Nine Months | ||||||||||||||||||||||||||||
Ended September 30, | At or for the Years Ended December 31, | |||||||||||||||||||||||||||
2010 | 2009 | 2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||
Selected Financial Ratios and Other Data: | ||||||||||||||||||||||||||||
Performance Ratios: | ||||||||||||||||||||||||||||
Return on average assets (annualized) | 0.81 | % | 0.59 | % | 0.63 | % | (0.11 | )% | 0.65 | % | 0.59 | % | 0.36 | % | ||||||||||||||
Return on average equity (annualized) | 7.86 | 6.11 | 6.44 | (1.03 | ) | 5.32 | 4.42 | 2.88 | ||||||||||||||||||||
Interest rate spread(1) | 3.23 | 2.65 | 2.73 | 2.63 | 2.52 | 2.75 | 3.10 | |||||||||||||||||||||
Net interest margin(2) | 3.53 | 3.03 | 3.10 | 3.09 | 3.13 | 3.30 | 3.49 | |||||||||||||||||||||
Non-interest expense to average assets (annualized) | 2.43 | 2.38 | 2.36 | 2.35 | 2.37 | 2.52 | 2.95 | |||||||||||||||||||||
Efficiency ratio(3) | 61.62 | 70.48 | 68.78 | 100.45 | 69.67 | 70.92 | 78.82 | |||||||||||||||||||||
Efficiency ratio, excluding foundation contribution | 61.62 | 70.48 | 68.78 | 100.45 | 69.67 | 70.92 | 68.07 | |||||||||||||||||||||
Average interest-earning assets to average interest-bearing liabilities | 120.53 | 118.06 | 118.55 | 118.50 | 120.77 | 122.01 | 121.51 | |||||||||||||||||||||
Dividend payout ratio(4) | 35.43 | 41.30 | 0.38 | — | 0.36 | 0.22 | — | |||||||||||||||||||||
Asset Quality Ratios: | ||||||||||||||||||||||||||||
Allowance for loan losses as a percent of total loans | 1.01 | 0.92 | 0.91 | 0.96 | 0.94 | 0.94 | 1.00 | |||||||||||||||||||||
Allowance for loan losses as a percent of non-performing loans | 121.72 | 81.27 | 104.09 | 120.30 | 676.86 | 658.20 | 120.87 | (5) | ||||||||||||||||||||
Net charge-offs to average loans | 0.11 | 0.09 | 0.16 | 0.04 | 0.00 | 0.05 | 0.05 | |||||||||||||||||||||
Non-performing loans as a percent of total loans | 0.83 | 1.13 | 0.88 | 0.80 | 0.14 | 0.14 | 0.83 | |||||||||||||||||||||
Non-performing assets as a percent of total assets | 1.07 | 1.13 | .96 | 0.68 | 0.12 | 0.12 | 0.68 | |||||||||||||||||||||
Capital Ratios: | ||||||||||||||||||||||||||||
Capital to total assets at end of period | 10.1 | 9.8 | 10.0 | 9.5 | 11.8 | 12.6 | 14.3 | |||||||||||||||||||||
Average capital to average assets | 10.3 | 9.7 | 9.7 | 10.8 | 12.3 | 13.5 | 12.4 | |||||||||||||||||||||
Total capital to risk-weighted assets | 14.0 | 14.0 | 14.1 | 14.2 | 16.6 | 18.0 | 20.4 | |||||||||||||||||||||
Tier I capital to risk-weighted assets | 12.8 | 12.9 | 13.0 | 12.9 | 15.5 | 16.9 | 19.3 | |||||||||||||||||||||
Tier I capital to total average assets | 10.0 | 10.0 | 10.1 | 10.4 | 11.7 | 12.8 | 14.3 | |||||||||||||||||||||
Other Data: | ||||||||||||||||||||||||||||
Number of full service offices | 18 | 18 | 18 | 17 | 16 | 14 | 13 | |||||||||||||||||||||
Number of limited service offices | 4 | 3 | 4 | 4 | 4 | 4 | 4 |
(1) | Represents the difference between the weighted-average yield on average interest-earning assets and the weighted-average cost of interest-bearing liabilities. | |
(2) | Represents (annualized) net interest income as a percent of average interest-earning assets. |
(3) | Represents non-interest expense divided by the sum of net interest income and non-interest income. |
(4) | Represents the amount of dividends paid as a percentage of net income. |
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(5) | The ratio at December 31, 2005 is 380.48 when excluding the $4.9 million fully guaranteed United States Department of Agriculture loan that was past due 90 days and still accruing as of December 31, 2005, which was repaid in full in January, 2006. |
• | Local, regional and national business or economic conditions may differ from those expected. | |
• | The effects of and changes in trade, monetary and fiscal policies and laws, including the U.S. Federal Reserve Board’s interest rate policies, may adversely affect our business. | |
• | The ability to increase market share and control expenses may be more difficult than anticipated. | |
• | Changes in laws and regulatory requirements (including those concerning taxes, banking, securities and insurance) may adversely affect us or our businesses. | |
• | Changes in accounting policies and practices, as may be adopted by regulatory agencies, the Public Company Accounting Oversight Board or the Financial Accounting Standards Board, may affect expected financial reporting. | |
• | Future changes in interest rates may reduce our profits which could have a negative impact on the value of our stock. | |
• | We are subject to lending risk and could incur losses in our loan portfolio despite our underwriting practices. Changes in real estate values could also increase our lending risk. | |
• | Changes in demand for loan products, financial products and deposit flow could impact our financial performance. | |
• | Our inability to recruit and retain additional high-skilled personnel, in particular the new Chief Executive Officer, could result in disruptions to our business or operations. | |
• | Strong competition within our market area may limit our growth and profitability. | |
• | We may not manage the risks involved in the foregoing as well as anticipated. | |
• | If our allowance for loan losses is not sufficient to cover actual loan losses, our earnings could decrease. | |
• | Our stock value may be negatively affected by federal regulations and certificate of incorporation provisions restricting takeovers. | |
• | Further implementation of our stock benefit plans will increase our costs, which will reduce our income. | |
• | Because we intend to continue to increase our commercial real estate and commercial business loan originations, our lending risk may increase, and downturns in the real estate market or local economy could adversely affect our earnings. |
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• | The Emergency Economic Stabilization Act (“EESA”) of 2008 has and may continue to have a significant impact on the banking industry. The Dodd-Frank Act was signed into law on July 21, 2010 and is expected to result in dramatic regulatory changes that will affect the industry in general, and impact our competitive position in ways that can’t be predicted at this time. |
Based Upon the Sale at $10.00 per Share of | ||||||||||||||||||||||||||||||||
Minimum | Midpoint | Maximum | Adjusted Maximum | |||||||||||||||||||||||||||||
11,050,000 Shares | 13,000,000 Shares | 14,950,000 Shares | 17,192,500 Shares(1) | |||||||||||||||||||||||||||||
Percent of | Percent of | Percent of | Percent of | |||||||||||||||||||||||||||||
Net | Net | Net | Net | |||||||||||||||||||||||||||||
Amount | Proceeds | Amount | Proceeds | Amount | Proceeds | Amount | Proceeds | |||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||
Gross offering proceeds | $ | 110,500 | $ | 130,000 | $ | 149,500 | $ | 171,925 | ||||||||||||||||||||||||
Less offering expenses | 6,034 | 6,730 | 7,426 | 8,227 | ||||||||||||||||||||||||||||
Net offering proceeds | 104,466 | 100.0 | % | 123,270 | 100.0 | % | 142,073 | 100.0 | % | 163,698 | 100.0 | % | ||||||||||||||||||||
Distribution of net proceeds: | ||||||||||||||||||||||||||||||||
Proceeds contributed to Rockville Bank | 52,233 | 50.0 | 61,635 | 50.0 | 71,037 | 50.0 | 81,849 | 50.0 | ||||||||||||||||||||||||
Loan to employee stock ownership plan | 4,420 | 4.2 | 5,200 | 4.2 | 5,980 | 4.2 | 6,877 | 4.2 | ||||||||||||||||||||||||
Proceeds contributed to foundation | 3,134 | 3.0 | 3,698 | 3.0 | 4,462 | 3.0 | 4,911 | 3.0 | ||||||||||||||||||||||||
Proceeds retained by New Rockville Financial(1) | $ | 44,679 | 42.8 | % | $ | 52.737 | 42.8 | % | $ | 60,795 | 42.8 | % | $ | 70,061 | 42.8 | % | ||||||||||||||||
(1) | As adjusted to give effect to an increase in the number of shares, which could occur due to a 15.0% increase in the offering range to reflect a greater demand for the shares or changes in market or financial conditions following the commencement of the offering. |
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• | to pay cash dividends to shareholders; | |
• | to repurchase shares of our common stock; | |
• | to invest in securities; | |
• | to loan or provide additional contributions to Rockville Bank; | |
• | to finance strategic growth opportunities, such as acquisitions of other financial institutions and related banking businesses, although we do not currently have any agreements or understandings regarding any specific expansion or acquisition opportunities; and | |
• | for other general corporate purposes. |
• | to fund new loans and otherwise increase our loan portfolio; |
• | to pay off approximately $37.3 million in Federal Home Loan Bank advances that are scheduled to mature between January 2011 and August 2011; |
• | to enhance existing products and services and to support the development of new products and services; | |
• | to invest in securities; | |
• | to expand its retail banking franchise by acquiring new branches or by acquiring other financial institutions or other banking related companies, although we do not currently have any agreements or understandings with respect to any specific expansion or acquisition opportunities; and | |
• | for other general corporate purposes. |
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Price per Share | Cash | |||||||||||
High | Low | Dividend Declared | ||||||||||
2010 | ||||||||||||
Fourth quarter | $ | [ ] | $ | [ ] | $ | 0.065 | ||||||
Third quarter | 12.91 | 11.06 | 0.06 | |||||||||
Second quarter | 12.64 | 10.50 | 0.06 | |||||||||
First quarter | 12.42 | 8.82 | 0.06 | |||||||||
2009 | ||||||||||||
Fourth quarter | $ | 11.68 | $ | 9.68 | $ | 0.05 | ||||||
Third quarter | 14.79 | 9.88 | 0.05 | |||||||||
Second quarter | 12.50 | 8.44 | 0.05 | |||||||||
First quarter | 14.46 | 6.17 | 0.05 | |||||||||
2008 | ||||||||||||
Fourth quarter | $ | 15.50 | $ | 8.80 | $ | 0.05 | ||||||
Third quarter | 17.00 | 12.00 | 0.05 | |||||||||
Second quarter | 14.50 | 12.51 | 0.05 | |||||||||
First quarter | 13.88 | 9.75 | 0.05 |
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Rockville Bank | Pro Forma at September 30, 2010, Based Upon the Sale in the Offering of | |||||||||||||||||||||||||||||||||||||||
Historical at | Minimum | Midpoint | Maximum | Adjusted Maximum | ||||||||||||||||||||||||||||||||||||
September 30, 2010 | 11,050,000 Shares | 13,000,000 Shares | 14,950,000 Shares | 17,192,500 Shares(1) | ||||||||||||||||||||||||||||||||||||
Percent of | Percent of | Percent of | Percent of | Percent of | ||||||||||||||||||||||||||||||||||||
Amount | Assets(2) | Amount | Assets(2) | Amount | Assets(2) | Amount | Assets(2) | Amount | Assets(2) | |||||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||
Equity capital | $ | 156,224 | 9.72 | % | $ | 207,950 | 12.48 | % | $ | 215,832 | 12.88 | % | $ | 223,713 | 13.27 | % | $ | 232,777 | 13.72 | % | ||||||||||||||||||||
Total risk-based capital(3) | $ | 170,220 | 13.27 | % | $ | 221,946 | 17.14 | % | $ | 229,828 | 17.72 | % | $ | 237,709 | 18.30 | % | $ | 246,773 | 18.97 | % | ||||||||||||||||||||
Total risk-based requirement(4) | $ | 128,293 | 10.00 | % | $ | 129,499 | 10.00 | % | $ | 129,687 | 10.00 | % | $ | 129,875 | 10.00 | % | $ | 130,092 | 10.00 | % | ||||||||||||||||||||
Excess | $ | 41,928 | 3.27 | % | $ | 92,446 | 7.14 | % | $ | 100,140 | 7.72 | % | $ | 107,834 | 8.30 | % | $ | 116,682 | 8.97 | % | ||||||||||||||||||||
Tier 1 (leverage) capital(3) | $ | 155,439 | 9.68 | % | $ | 207,165 | 12.44 | % | $ | 215,047 | 12.84 | % | $ | 222,928 | 13.23 | % | $ | 231,992 | 13.68 | % | ||||||||||||||||||||
Tier 1 (leverage) requirement(4) | $ | 64,212 | 4.00 | % | $ | 66,626 | 4.00 | % | $ | 67,002 | 4.00 | % | $ | 67,378 | 4.00 | % | $ | 67,811 | 4.00 | % | ||||||||||||||||||||
Excess | $ | 91,227 | 5.68 | % | $ | 140,539 | 8.44 | % | $ | 148,045 | 8.84 | % | $ | 155,550 | 9.23 | % | $ | 164,182 | 9.68 | % | ||||||||||||||||||||
Tier 1 risk-based capital(3) | $ | 155,439 | 12.12 | % | $ | 207,165 | 16.00 | % | $ | 215,047 | 16.58 | % | $ | 222,928 | 17.16 | % | $ | 231,992 | 17.83 | % | ||||||||||||||||||||
Tier 1 risk-based requirement(4) | $ | 51,317 | 4.00 | % | $ | 51,800 | 4.00 | % | $ | 51,875 | 4.00 | % | $ | 51,950 | 4.00 | % | $ | 52,037 | 4.00 | % | ||||||||||||||||||||
Excess | $ | 104,122 | 8.12 | % | $ | 155,365 | 12.00 | % | $ | 163,172 | 12.58 | % | $ | 170,978 | 13.16 | % | $ | 179,956 | 13.83 | % | ||||||||||||||||||||
Reconciliation of capital infused into to Rockville Bank: | ||||||||||||||||||||||||||||||||||||||||
Net Proceeds | $ | 52,233 | $ | 61,635 | $ | 71,037 | $ | 81,849 | ||||||||||||||||||||||||||||||||
Add: MHC capital contribution | $ | 8,107 | $ | 8,107 | $ | 8,107 | $ | 8,107 | ||||||||||||||||||||||||||||||||
Add: Tax benefit of contribution to charitable foundation | ||||||||||||||||||||||||||||||||||||||||
Less: Expense of contribution to charitable foundation | ||||||||||||||||||||||||||||||||||||||||
Less: ESOP | $ | (4,420 | ) | $ | (5,200 | ) | $ | (5,980 | ) | $ | (6,877 | ) | ||||||||||||||||||||||||||||
Less: Restricted Stock | $ | (4,195 | ) | $ | (4,935 | ) | $ | (5,675 | ) | $ | (6,526 | ) | ||||||||||||||||||||||||||||
Pro Forma increase in Tier 1risk-based capital | $ | 51,726 | $ | 59,608 | $ | 67,489 | $ | 76,553 | ||||||||||||||||||||||||||||||||
(1) | As adjusted to give effect to an increase in the number of shares that could occur due to a 15.0% increase in the offering range to reflect a greater demand for the shares or changes in market or financial conditions following the commencement of the offering. |
(2) | Tangible and core capital levels are shown as a percentage of total adjusted assets. Risk-based capital levels are shown as a percentage of risk-weighted assets. Pro forma amounts and percentages assume that funds infused into Rockville Bank are invested in assets that carry a 20.0% risk weighting. | |
(3) | Pro forma capital levels assume that the employee stock ownership plan purchases 4.0% of the shares of common stock sold in the offering with funds we lend. Pro forma GAAP and regulatory capital have been reduced by the amount required to fund this plan. See “MANAGEMENT” for a discussion of our employee stock ownership plan. | |
(4) | The current core capital requirement for financial institutions is 4.0% of total adjusted assets for financial institutions that receive the highest supervisory rating for safety and soundness and a 4.0% to 5.0% core capital ratio requirement for all other financial institutions. In addition, the FDIC requires a Tier 1 risk-based capital ratio of 4.0% or greater. |
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Pro Forma at September 30, 2010, Based Upon the Sale at $10.00 per Share of | ||||||||||||||||||||
Existing | ||||||||||||||||||||
Rockville | ||||||||||||||||||||
Financial | Adjusted | |||||||||||||||||||
Historical | Minimum | Midpoint | Maximum | Maximum | ||||||||||||||||
at September 30, | 11,050,000 | 13,000,000 | 14,950,000 | 17,192,500 | ||||||||||||||||
2010 | Shares | Shares | Shares | Shares(1) | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Deposits(2) | $ | 1,174,978 | $ | 1,166,657 | $ | 1,166,657 | $ | 1,166,657 | $ | 1,166,657 | ||||||||||
Borrowed funds | 276,428 | 276,428 | 276,428 | 276,428 | 276,428 | |||||||||||||||
Total deposits and borrowed funds | $ | 1,451,406 | $ | 1,443,085 | $ | 1,443,085 | $ | 1,443,085 | $ | 1,443,085 | ||||||||||
Stockholders’ equity: | ||||||||||||||||||||
Preferred stock, no par value, 1,000,000 shares authorized (post-conversion)(3) | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Common stock, no par value, 29,000,000 shares authorized (post-conversion); shares to be issued as reflected(3)(4) | 85,249 | — | — | — | — | |||||||||||||||
Paid-in capital(3) | 4,484 | 190,545 | 209,349 | 228,153 | 249,777 | |||||||||||||||
Retained earnings(5) | 89,155 | 89,155 | 89,155 | 89,155 | 89,155 | |||||||||||||||
Accumulated other comprehensive loss | (432 | ) | (432 | ) | (432 | ) | (432 | ) | (432 | ) | ||||||||||
Plus: | ||||||||||||||||||||
MHC capital contribution(3) | — | 8,107 | 8,107 | 8,107 | 8,107 | |||||||||||||||
Less: | ||||||||||||||||||||
Treasury stock, at cost | (9,663 | ) | (9,663 | ) | (9,663 | ) | (9,663 | ) | (9,663 | ) | ||||||||||
After-tax expense of foundation(6) | — | (2,068 | ) | (2,444 | ) | (2,813 | ) | (3,241 | ) | |||||||||||
Unearned compensation — ESOP(7) | (3,654 | ) | (4,420 | ) | (5,200 | ) | (5,980 | ) | (6,877 | ) | ||||||||||
Common stock acquired by Restricted Stock Plan | — | (4,195 | ) | (4,935 | ) | (5,675 | ) | (6,526 | ) | |||||||||||
Total stockholders’ equity | $ | 165,139 | $ | 267,029 | $ | 283,941 | $ | 300,852 | $ | 320,300 | ||||||||||
Pro Forma Shares Outstanding | ||||||||||||||||||||
Total shares outstanding | 18,853,112 | 18,963,446 | 22,309,937 | 25,656,427 | 29,504,891 | |||||||||||||||
Exchange shares issued | — | 7,913,446 | 9,309,937 | 10,706,427 | 12,312,391 | |||||||||||||||
Shares offered for sale | — | 11,050,000 | 13,000,000 | 14,950,000 | 17,192,500 | |||||||||||||||
Total stockholders’ equity as a percentage of total assets(2) | 10.07 | % | 15.33 | % | 16.15 | % | 16.94 | % | 17.84 | % | ||||||||||
Tangible equity ratio | 10.01 | % | 15.28 | % | 16.09 | % | 16.89 | % | 17.79 | % |
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(1) | As adjusted to give effect to an increase in the number of shares of common stock that could occur due to a 15.0% increase in the offering range to reflect a greater demand for shares or changes in market or general financial conditions following the commencement of the offering. |
(2) | Does not reflect withdrawals from deposit accounts for the purchase of shares of common stock in the conversion and offering. These withdrawals would reduce pro forma deposits and assets by the amount of the withdrawals. On a pro forma basis, reflects elimination of $8.3 million of cash in Rockville Financial MHC held as deposits of Rockville Bank. |
(3) | Existing Rockville Financial currently has 1.0 million authorized shares of preferred stock and 29.0 million authorized shares of common stock, no par value. On a pro forma basis, New Rockville Financial common stock and additional paid-in capital have been revised to reflect the number of shares of New Rockville Financial common stock to be outstanding, which is 18,963,446 shares, 22,309,937 shares, 25,656,427 shares and 29,504,891 shares at the minimum, midpoint, maximum and adjusted maximum of the offering range, respectively. On a pro forma basis, reflects transfer to equity of $8.1 million of net assets in Rockville Financial MHC. |
(4) | No effect has been given to the issuance of additional shares of New Rockville Financial common stock pursuant to the vesting of restricted stock awards or the exercise of options under a stock benefit plan. If this plan is implemented within the first year after the closing of the offering, an amount up to 3.80% and 9.49% of the shares of New Rockville Financial common stock sold in the offering will be reserved for issuance upon the vesting and exercise of restricted stock and options under the plan, respectively. No effect has been given to the restricted stock or options currently outstanding. See “MANAGEMENT”. |
(5) | The retained earnings of Rockville Bank will be substantially restricted after the conversion. See “THE CONVERSION AND OFFERING — Liquidation Rights” and “SUPERVISION AND REGULATION — Federal Banking Regulation”. | |
(6) | Represents the expense of contribution to the charitable foundation based on a 34.0% tax rate. The realization of the deferred tax benefit is limited annually to a maximum deduction for charitable contributions equal to 10% of our annual taxable income, subject to our ability to carry forward for federal or state purposes any unused portion of the deduction for the five years following the year in which the contribution is made. | |
(7) | Assumes that 4.0% of the shares sold in the offering will be acquired by the employee stock ownership plan financed by a loan from New Rockville Financial. The loan will be repaid principally from Rockville Bank’s contributions to the employee stock ownership plan. Since New Rockville Financial will finance the employee stock ownership plan debt, this debt will be eliminated through consolidation and no liability will be reflected on New Rockville Financial’s consolidated financial statements. Accordingly, the amount of shares of common stock acquired by the employee stock ownership plan is shown in this table as a reduction of total stockholders’ equity. | |
(8) | Tangible equity ratio is a non-GAAP ratio. |
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STOCK OWNERSHIP
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15% Above | ||||||||||||||||
Minimum | Midpoint | Maximum | Maximum | |||||||||||||
of Offering | of Offering | of Offering | of Offering | |||||||||||||
Range | Range | Range | Range | |||||||||||||
(Dollars in thousands, except per share amounts) | ||||||||||||||||
After-tax expense of contribution to foundation: | ||||||||||||||||
Period ended September 30, 2010 | $ | (2,068 | ) | $ | (2,441 | ) | $ | (2,813 | ) | $ | (3,241 | ) | ||||
Pro forma net income: | ||||||||||||||||
Period ended September 30, 2010 | $ | 7,110 | $ | 6,661 | $ | 6,211 | $ | 5,694 | ||||||||
Pro forma net income per share: | ||||||||||||||||
Period ended September 30, 2010 | $ | 0.38 | $ | 0.31 | $ | 0.25 | $ | 0.20 | ||||||||
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• | withdrawals from deposit accounts for the purpose of purchasing shares of common stock in the stock offering; | |
• | our results of operations after the stock offering; or | |
• | changes in the market price of the shares of common stock after the stock offering. |
At or for the Nine Months Ended September 30, 2010 | ||||||||||||||||
Based Upon the Sale at $10.00 per Share of | ||||||||||||||||
Minimum | Midpoint | Maximum | Adjusted Maximum | |||||||||||||
11,050,000 | 13,000,000 | 14,950,000 | 17,192,500 | |||||||||||||
Shares | Shares | Shares | Shares | |||||||||||||
(Dollars in thousands, except per share amounts) | ||||||||||||||||
Gross proceeds of offering | $ | 110,500 | $ | 130,000 | $ | 149,500 | $ | 171,925 | ||||||||
Plus: market value of shares issued in the exchange | 79,134 | 93,099 | 107,064 | 123,124 | ||||||||||||
Pro forma market capitalization | $ | 189,634 | $ | 223,099 | $ | 256,564 | $ | 295,049 | ||||||||
Gross proceeds of offering | 110,500 | 130,000 | 149,500 | 171,925 | ||||||||||||
Less: Expenses | 6,034 | 6,730 | 7,426 | 8,227 | ||||||||||||
Estimated Net Proceeds | 104,466 | 123,270 | 142,074 | 163,698 | ||||||||||||
Less: Common stock purchased by employee stock ownership plan | (4,420 | ) | (5,200 | ) | (5,980 | ) | (6,877 | ) | ||||||||
Less: Cash contribution to charitable foundation | (3,134 | ) | (3,698 | ) | (4,262 | ) | (4,911 | ) | ||||||||
Less: common stock purchased by the RRP | (4,195 | ) | (4,935 | ) | (5,675 | ) | (6,526 | ) | ||||||||
Plus: MHC cash contribution | 8,321 | 8,321 | 8,321 | 8,321 | ||||||||||||
Estimated net proceeds, as adjusted | $ | 101,038 | $ | 117,758 | $ | 134,478 | $ | 153,705 | ||||||||
Consolidated Net Income: | ||||||||||||||||
Historical | $ | 9,577 | $ | 9,577 | $ | 9,577 | $ | 9,577 | ||||||||
Pro forma income on net proceeds | 635 | 740 | 845 | 966 | ||||||||||||
Pro forma employee stock ownership plan adjustment | (73 | ) | (86 | ) | (99 | ) | (114 | ) | ||||||||
Pro forma RRP adjustment | (415 | ) | (489 | ) | (562 | ) | (646 | ) | ||||||||
Pro forma stock option plan adjustment | (546 | ) | (642 | ) | (738 | ) | (849 | ) | ||||||||
Pro forma net income | $ | 9,179 | $ | 9,101 | $ | 9,024 | $ | 8,935 | ||||||||
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At or for the Nine Months Ended September 30, 2010 | ||||||||||||||||
Based Upon the Sale at $10.00 per Share of | ||||||||||||||||
Minimum | Midpoint | Maximum | Adjusted Maximum | |||||||||||||
11,050,000 | 13,000,000 | 14,950,000 | 17,192,500 | |||||||||||||
Shares | Shares | Shares | Shares | |||||||||||||
(Dollars in thousands, except per share amounts) | ||||||||||||||||
Per share net income (reflectsASC 260-10-55) | ||||||||||||||||
Historical | $ | 0.52 | $ | 0.44 | $ | 0.38 | $ | 0.33 | ||||||||
Pro forma income on net proceeds | 0.03 | 0.03 | 0.03 | 0.03 | ||||||||||||
Pro forma employee stock ownership plan adjustment | — | — | — | — | ||||||||||||
Pro forma RRP adjustment | (0.02 | ) | (0.02 | ) | (0.02 | ) | (0.02 | ) | ||||||||
Pro forma stock option plan adjustment | (0.03 | ) | (0.03 | ) | (0.03 | ) | (0.03 | ) | ||||||||
Pro forma net income per share | $ | 0.50 | $ | 0.42 | $ | 0.36 | $ | 0.31 | ||||||||
Stock price as a multiple of pro forma earnings per share | $ | 15.00 | $ | 17.86 | $ | 20.83 | $ | 24.19 | ||||||||
Shares used for calculating pro forma earnings per share | 18,532,496 | 21,802,937 | 25,073,377 | 28,834,384 | ||||||||||||
Stockholders’ equity: | ||||||||||||||||
Historical | $ | 165,139 | $ | 165,139 | $ | 165,139 | $ | 165,139 | ||||||||
Estimated net proceeds | 104,466 | 123,270 | 142,074 | 163,698 | ||||||||||||
Plus: MHC capital contribution | 8,107 | 8,107 | 8,107 | 8,107 | ||||||||||||
Plus: tax benefit of contribution to charitable foundation | 1,066 | 1,257 | 1,449 | 1,670 | ||||||||||||
Less: common stock acquired by employee stock ownership plan | (4,420 | ) | (5,200 | ) | (5,980 | ) | (6,877 | ) | ||||||||
Less: common stock acquired by RRP | (4,195 | ) | (4,935 | ) | (5,675 | ) | (6,526 | ) | ||||||||
Less: expense of contribution to charitable foundation | (3,134 | ) | (3,698 | ) | (4,262 | ) | (4,911 | ) | ||||||||
Pro forma stockholders’ equity | 267,029 | 283,941 | 300,852 | 320,300 | ||||||||||||
Intangible assets | (1,149 | ) | (1,149 | ) | (1,149 | ) | (1,149 | ) | ||||||||
Pro forma tangible stockholders’ equity | $ | 265,880 | $ | 282,792 | $ | 299,703 | $ | 319,151 | ||||||||
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At or for the Nine Months Ended September 30, 2010 | ||||||||||||||||
Based Upon the Sale at $10.00 per Share of | ||||||||||||||||
Minimum | Midpoint | Maximum | Adjusted Maximum | |||||||||||||
11,050,000 | 13,000,000 | 14,950,000 | 17,192,500 | |||||||||||||
Shares | Shares | Shares | Shares | |||||||||||||
(Dollars in thousands, except per share amounts) | ||||||||||||||||
Stockholders’ equity per share: | ||||||||||||||||
Historical | $ | 8.70 | $ | 7.40 | $ | 6.43 | $ | 5.60 | ||||||||
Estimated net proceeds | 5.51 | 5.53 | 5.54 | 5.55 | ||||||||||||
Plus: MHC capital contribution | 0.43 | 0.36 | 0.32 | 0.27 | ||||||||||||
Plus: tax benefit of contribution to charitable foundation | 0.06 | 0.06 | 0.06 | 0.06 | ||||||||||||
Less: common stock acquired by employee stock ownership plan | (0.23 | ) | (0.23 | ) | (0.23 | ) | (0.23 | ) | ||||||||
Less: common stock acquired by RRP | (0.22 | ) | (0.22 | ) | (0.22 | ) | (0.22 | ) | ||||||||
Less: expense of contribution to charitable foundation | (0.17 | ) | (0.17 | ) | (0.17 | ) | (0.17 | ) | ||||||||
Pro forma stockholders’ equity per share | 14.08 | 12.73 | 11.73 | 10.86 | ||||||||||||
Intangible assets | (0.06 | ) | (0.05 | ) | (0.04 | ) | (0.04 | ) | ||||||||
Pro forma tangible stockholders’ equity per share | $ | 14.02 | $ | 12.68 | $ | 11.69 | $ | 10.82 | ||||||||
Offering price as percentage of equity per share | 71.02 | % | 78.55 | % | 85.25 | % | 92.08 | % | ||||||||
Offering price as percentage of tangible equity per share | 71.33 | % | 78.86 | % | 85.54 | % | 92.42 | % | ||||||||
Shares used for pro forma stockholders’ equity per share | 18,963,446 | 22,309,937 | 25,656,427 | 29,504,891 | ||||||||||||
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At or for the Year Ended December 31, 2009 | ||||||||||||||||
Based Upon the Sale at $10.00 per Share of | ||||||||||||||||
Minimum | Midpoint | Maximum | Adjusted Maximum | |||||||||||||
11,050,000 | 13,000,000 | 14,950,000 | 17,192,500 | |||||||||||||
Shares | Shares | Shares | Shares | |||||||||||||
(Dollars in thousands, except per share amounts) | ||||||||||||||||
Gross proceeds of offering | $ | 110,500 | $ | 130,000 | $ | 149,500 | $ | 171,925 | ||||||||
Plus: market value of shares issued in the exchange | 79,134 | 93,099 | 107,064 | 123,124 | ||||||||||||
Pro forma market capitalization | $ | 189,634 | $ | 223,099 | $ | 256,564 | $ | 295,049 | ||||||||
Gross proceeds of offering | $ | 110,500 | $ | 130,000 | $ | 149,500 | $ | 171,925 | ||||||||
Less: Expenses | 6,034 | 6,730 | 7,426 | 8,227 | ||||||||||||
Estimated Net Proceeds | 104,466 | 123,270 | 142,074 | 163,698 | ||||||||||||
Plus: MHC cash contribution | 8,321 | 8,321 | 8,321 | 8,321 | ||||||||||||
Less: Common stock purchased by employee stock ownership plan | (4,420 | ) | (5,200 | ) | (5,980 | ) | (6,877 | ) | ||||||||
Less: Cash contribution to charitable foundation | (3,134 | ) | (3,698 | ) | (4,262 | ) | (4,911 | ) | ||||||||
Less: common stock purchased by the RRP | (4,195 | ) | (4,935 | ) | (5,675 | ) | (6,526 | ) | ||||||||
�� | ||||||||||||||||
Estimated net proceeds, as adjusted | $ | 101,038 | $ | 117,758 | $ | 134,478 | $ | 153,705 | ||||||||
Consolidated Net Income: | ||||||||||||||||
Historical | $ | 9,732 | $ | 9,732 | $ | 9,732 | $ | 9,732 | ||||||||
Pro forma income on net proceeds | 847 | 987 | 1,127 | 1,288 | ||||||||||||
Pro forma employee stock ownership plan adjustment | (97 | ) | (114 | ) | (132 | ) | (151 | ) | ||||||||
Pro forma RRP adjustment | (554 | ) | (651 | ) | (749 | ) | (861 | ) | ||||||||
Pro forma stock option plan adjustment | (727 | ) | (856 | ) | (984 | ) | (1,132 | ) | ||||||||
Pro forma net income | 9,201 | 9,098 | 8,995 | 8,876 | ||||||||||||
Per share net income (reflectsASC 260-10-55) | ||||||||||||||||
Historical | 0.53 | 0.45 | 0.40 | 0.35 | ||||||||||||
Pro forma income on net proceeds | 0.05 | 0.05 | 0.04 | 0.04 | ||||||||||||
Pro forma employee stock ownership plan adjustment | (0.01 | ) | (0.01 | ) | (0.01 | ) | (0.01 | ) | ||||||||
Pro forma RRP adjustment | (0.03 | ) | (0.03 | ) | (0.03 | ) | (0.03 | ) | ||||||||
Pro forma stock option plan adjustment | (0.04 | ) | (0.04 | ) | (0.04 | ) | (0.04 | ) | ||||||||
Pro forma net income per share | $ | 0.50 | $ | 0.42 | $ | 0.36 | $ | 0.31 | ||||||||
Stock price as a multiple of pro forma earnings per share | $ | 20.00 | $ | 23.81 | $ | 27.78 | $ | 32.26 | ||||||||
Shares used for calculating pro forma earnings per share | 18,563,179 | 21,807,270 | 25,078,360 | 28,840,114 | ||||||||||||
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At or for the Year Ended December 31, 2009 | ||||||||||||||||
Based Upon the Sale at $10.00 per Share of | ||||||||||||||||
Minimum | Midpoint | Maximum | Adjusted Maximum | |||||||||||||
11,050,000 | 13,000,000 | 14,950,000 | 17,192,500 | |||||||||||||
Shares | Shares | Shares | Shares | |||||||||||||
(Dollars in thousands, except per share amounts) | ||||||||||||||||
Stockholders’ equity: | ||||||||||||||||
Historical | $ | 157,428 | $ | 157,428 | $ | 157,428 | $ | 157,428 | ||||||||
Estimated net proceeds | 104,466 | 123,270 | 142,074 | 163,698 | ||||||||||||
Plus: MHC capital contribution | 8,107 | 8,107 | 8,107 | 8,107 | ||||||||||||
Plus: tax benefit of contribution to charitable foundation | 1,066 | 1,257 | 1,449 | 1,670 | ||||||||||||
Less: common stock acquired by employee stock ownership plan | (4,420 | ) | (5,200 | ) | (5,980 | ) | (6,877 | ) | ||||||||
Less: common stock acquired by RRP | (4,195 | ) | (4,935 | ) | (5,675 | ) | (6,526 | ) | ||||||||
Less: expense of contribution to charitable foundation | (3,134 | ) | (3,698 | ) | (4,262 | ) | (4,911 | ) | ||||||||
Pro forma stockholders’ equity | 259,318 | 276,230 | 293,141 | 312,589 | ||||||||||||
Intangible assets | (1,070 | ) | (1,070 | ) | (1,070 | ) | (1,070 | ) | ||||||||
Pro forma tangible stockholders’ equity | $ | 258,248 | $ | 275,160 | $ | 292,071 | $ | 311,519 | ||||||||
Stockholders’ equity per share: | ||||||||||||||||
Historical | $ | 8.29 | $ | 7.05 | $ | 6.13 | $ | 5.33 | ||||||||
Estimated net proceeds | 5.51 | 5.53 | 5.54 | 5.55 | ||||||||||||
Plus: MHC capital contribution | 0.43 | 0.36 | 0.32 | 0.27 | ||||||||||||
Plus: tax benefit of contribution to charitable foundation | 0.06 | 0.06 | 0.06 | 0.06 | ||||||||||||
Less: common stock acquired by employee stock ownership plan | (0.23 | ) | (0.23 | ) | (0.23 | ) | (0.23 | ) | ||||||||
Less: common stock acquired by RRP | (0.22 | ) | (0.22 | ) | (0.22 | ) | (0.22 | ) | ||||||||
Less: expense of contribution to charitable foundation | (0.17 | ) | (0.17 | ) | (0.17 | ) | (0.17 | ) | ||||||||
Pro forma stockholders’ equity per share | 13.67 | 12.38 | 11.43 | 10.59 | ||||||||||||
Intangible assets | (0.06 | ) | (0.05 | ) | (0.04 | ) | (0.04 | ) | ||||||||
Pro forma tangible stockholders’ equity per share | $ | 13.61 | $ | 12.33 | $ | 11.39 | $ | 10.55 | ||||||||
Offering price as a percentage of equity per share | 73.15 | % | 80.78 | % | 87.49 | % | 94.43 | % | ||||||||
Offering price as a percentage of tangible equity per share | 73.48 | % | 81.10 | % | 87.80 | % | 94.79 | % | ||||||||
Shares used for pro forma stockholders’ equity per share | 18,963,446 | 22,309,937 | 25,656,427 | 29,504.891 | ||||||||||||
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FINANCIAL CONDITION AND RESULTS OF OPERATIONS
46
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47
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48
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49
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50
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Nine Months Ended September 30, | ||||||||||||
2010 | 2009 | Change | ||||||||||
(In thousands) | ||||||||||||
Net interest income | $ | 40,110 | $ | 33,864 | $ | 6,246 | ||||||
Provision for loan losses | 3,114 | 1,303 | 1,811 | |||||||||
Non-interest income | 6,798 | 5,382 | 1,416 | |||||||||
Non-interest expense | 28,903 | 27,661 | 1,242 | |||||||||
Income before income taxes | 14,891 | 10,282 | 4,609 | |||||||||
Income tax provision | 5,314 | 3,432 | 1,882 | |||||||||
Net income | $ | 9,577 | $ | 6,850 | $ | 2,727 | ||||||
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Nine Months Ended September 30, | ||||||||||||||||
2010 | 2009 | $ Change | % Change | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Salaries and employee benefits | $ | 14,579 | $ | 14,092 | $ | 487 | 3.46 | % | ||||||||
Service bureau fees | 3,006 | 2,924 | 82 | 2.80 | ||||||||||||
Occupancy and equipment | 3,238 | 3,324 | (86 | ) | (2.59 | ) | ||||||||||
Professional fees | 1,136 | 903 | 233 | 25.80 | ||||||||||||
Marketing and promotions | 918 | 767 | 151 | 19.69 | ||||||||||||
FDIC assessments | 1,207 | 1,874 | (667 | ) | (35.59 | ) | ||||||||||
Other real estate owned | 965 | 11 | 954 | 8672.73 | ||||||||||||
Other | 3,854 | 3,766 | 88 | 2.34 | ||||||||||||
Total non-interest expense | $ | 28,903 | $ | 27,661 | $ | 1,242 | 4.49 | |||||||||
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Nine Months Ended September 30, | ||||||||||||
2010 | 2009 | Change | ||||||||||
(In thousands) | ||||||||||||
Directors fees and stock expense | $ | 499 | $ | 574 | $ | (75 | ) | |||||
Collections | 301 | 357 | (56 | ) | ||||||||
Telephone | 162 | 132 | 30 | |||||||||
Postage | 315 | 296 | 19 | |||||||||
Courier services | 239 | 249 | (10 | ) | ||||||||
Dues and subscriptions | 157 | 160 | (3 | ) | ||||||||
Mortgage loan servicing | 209 | 205 | 4 | |||||||||
Mortgage appraisal / credit reports | 270 | 260 | 10 | |||||||||
Off balance sheet provision expense | 10 | (57 | ) | 67 | ||||||||
Printing and forms | 240 | 254 | (14 | ) | ||||||||
Other | 1,452 | 1,336 | 116 | |||||||||
Total other non-interest expense | $ | 3,854 | $ | 3,766 | $ | 88 | ||||||
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Years Ended December 31, | ||||||||||||
2009 | 2008 | $ Change | ||||||||||
(In thousands) | ||||||||||||
Net interest income | $ | 46,287 | $ | 42,599 | $ | 3,688 | ||||||
Provision for loan losses | 1,961 | 2,393 | (432 | ) | ||||||||
Non-interest income (loss) | 6,972 | (8,987 | ) | 15,959 | ||||||||
Non-interest expense | 36,631 | 33,762 | 2,869 | |||||||||
Income (loss) before income taxes | 14,667 | (2,543 | ) | 17,210 | ||||||||
Income tax provision (benefit) | 4,935 | (956 | ) | 5,891 | ||||||||
Net income (loss) | $ | 9,732 | $ | (1,587 | ) | $ | 11,319 | |||||
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Years Ended December 31, | ||||||||||||||||
2009 | 2008 | $ Change | % Change | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Salaries and employee benefits | $ | 18,571 | $ | 17,150 | $ | 1,421 | 8.3 | % | ||||||||
Service bureau fees | 3,872 | 3,808 | 64 | 1.7 | ||||||||||||
Occupancy and equipment | 4,380 | 4,103 | 277 | 6.8 | ||||||||||||
Professional fees | 1,131 | 1,484 | (353 | ) | (23.8 | ) | ||||||||||
Marketing and promotions | 1,156 | 1,315 | (159 | ) | (12.1 | ) | ||||||||||
FDIC assessments | 2,222 | 654 | 1,568 | 239.8 | ||||||||||||
Other(1) | 5,299 | 5,248 | 51 | 1.0 | ||||||||||||
Total non-interest expense | $ | 36,631 | $ | 33,762 | $ | 2,869 | 8.5 | % | ||||||||
(1) | Includes directors’ fees and expenses for the years ended December 31, 2009 and 2008 of $769,000 and $829,000, respectively. |
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Years Ended December 31, | ||||||||||||||||
2009 | 2008 | $ Change | % Change | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Directors fees and expenses | $ | 769 | $ | 829 | $ | (60 | ) | (7.2 | )% | |||||||
Collections | 463 | 29 | 434 | 1,496.6 | ||||||||||||
Off-balance sheet provision | (47 | ) | 230 | (277 | ) | (120.4 | ) | |||||||||
Telephone | 174 | 202 | (28 | ) | (13.9 | ) | ||||||||||
Postage | 395 | 383 | 12 | 3.1 | ||||||||||||
Courier | 331 | 344 | (13 | ) | (3.8 | ) | ||||||||||
Dues and subscriptions | 215 | 228 | (13 | ) | (5.7 | ) | ||||||||||
Service charges | 188 | 183 | 5 | 2.7 | ||||||||||||
Printing and forms | 328 | 431 | (103 | ) | (23.9 | ) | ||||||||||
Other | 2,483 | 2,389 | 94 | 3.9 | ||||||||||||
Total other non-interest expense | $ | 5,299 | $ | 5,248 | $ | 51 | 1.0 | % | ||||||||
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Years Ended December 31, | ||||||||||||||||
2008 | 2007 | $ Change | % Change | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Net interest income | $ | 42,599 | $ | 38,300 | $ | 4,299 | 11.2 | % | ||||||||
Provision for loan losses | 2,393 | 749 | 1,644 | 219.5 | ||||||||||||
Non-interest (loss) income | (8,987 | ) | 5,194 | (14,181 | ) | (273.0 | ) | |||||||||
Non-interest expense | 33,762 | 30,301 | 3,461 | 11.4 | ||||||||||||
(Loss) income before income taxes | (2,543 | ) | 12,444 | (14,987 | ) | (120.4 | ) | |||||||||
(Benefit) provision for income taxes | (956 | ) | 4,116 | (5,072 | ) | (123.2 | ) | |||||||||
Net (loss) income | $ | (1,587 | ) | $ | 8,328 | $ | (9,915 | ) | (119.1 | )% | ||||||
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Years Ended December 31, | ||||||||||||||||
2008 | 2007 | $ Change | % Change | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Salaries and employee benefits | $ | 17,150 | $ | 16,082 | $ | 1,068 | 6.6 | % | ||||||||
Service bureau fees | 3,808 | 3,361 | 447 | 13.3 | ||||||||||||
Occupancy and equipment | 4,103 | 3,594 | 509 | 14.2 | ||||||||||||
Professional fees | 1,484 | 1,550 | (66 | ) | (4.3 | ) | ||||||||||
Marketing and promotions | 1,315 | 1,131 | 184 | 16.3 | ||||||||||||
FDIC assessments | 654 | 229 | 425 | 185.6 | ||||||||||||
Other(1) | 5,248 | 4,354 | 894 | 20.5 | ||||||||||||
Total non-interest expense | $ | 33,762 | $ | 30,301 | $ | 3,461 | 11.4 | % | ||||||||
(1) | Includes directors’ fees and expenses for the years ended December 31, 2008 and 2007 of $829,000 and $755,000, respectively. |
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Years Ended December 31, | ||||||||||||||||
2008 | 2007 | $ Change | % Change | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Directors fees and expenses | $ | 829 | $ | 755 | $ | 74 | 9.8 | % | ||||||||
Telephone | 202 | 217 | (15 | ) | (6.9 | ) | ||||||||||
Postage | 383 | 369 | 14 | 3.8 | ||||||||||||
Courier | 344 | 302 | 42 | 13.9 | ||||||||||||
Dues and subscriptions | 228 | 235 | (7 | ) | (3.0 | ) | ||||||||||
Service charges | 183 | 128 | 55 | 43.0 | ||||||||||||
Printing and forms | 431 | 392 | 39 | 9.9 | ||||||||||||
Other | 2,504 | 1,824 | 680 | 37.3 | ||||||||||||
Total other non-interest expense | $ | 5,104 | $ | 4,222 | $ | 882 | 20.9 | % | ||||||||
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Percentage Increase (Decrease) in Estimated | ||||||||
Net Interest Income Over 12 Months | ||||||||
At September 30, 2010 | At December 31, 2009 | |||||||
300 basis point increase | — | (1.87 | %) | |||||
400 basis point increase | 11.45 | % | — | |||||
50 basis point decrease | (0.52 | ) | (3.50 | ) |
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Nine Months Ended September 30, | ||||||||||||||||||||||||
2010 | 2009 | |||||||||||||||||||||||
Average | Interest and | Yield/ | Average | Interest and | Yield/ | |||||||||||||||||||
Balance | Dividends | Cost | Balance | Dividends | Cost | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||
Loans receivable, net(1) | $ | 1,369,198 | $ | 52,831 | 5.14 | % | $ | 1,325,770 | $ | 51,965 | 5.23 | % | ||||||||||||
Investment securities | 122,343 | 3,795 | 4.14 | 145,453 | 5,156 | 4.73 | ||||||||||||||||||
Federal Home Loan Bank stock | 17,007 | — | — | 17,007 | — | — | ||||||||||||||||||
Other earning assets | 6,618 | 4 | 0.08 | 1,048 | 1 | 0.13 | ||||||||||||||||||
Total interest-earning assets | 1,515,166 | 56,630 | 4.98 | 1,489,278 | 57,122 | 5.11 | ||||||||||||||||||
Non-interest-earning assets | 67,904 | 58,746 | ||||||||||||||||||||||
Total assets | $ | 1,583,070 | $ | 1,548,024 | ||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||
NOW and money market accounts | $ | 348,607 | 1,182 | 0.45 | $ | 305,119 | 2,017 | 0.88 | ||||||||||||||||
Savings accounts(5) | 158,607 | 410 | 0.34 | 134,551 | 475 | 0.47 | ||||||||||||||||||
Time deposits | 483,681 | 7,076 | 1.95 | 529,451 | 12,947 | 3.26 | ||||||||||||||||||
Total interest-bearing deposits | 990,895 | 8,668 | 1.17 | 969,121 | 15,439 | 2.12 | ||||||||||||||||||
Advances from the Federal Home Loan Bank | 266,162 | 7,852 | 3.93 | 292,320 | 7,819 | 3.57 | ||||||||||||||||||
Total interest-bearing liabilities | 1,257,057 | 16,520 | 1.75 | % | 1,261,441 | 23,258 | 2.46 | % | ||||||||||||||||
Non-interest-bearing liabilities | 163,565 | 137,014 | ||||||||||||||||||||||
Total liabilities | 1,420,622 | 1,398,455 | ||||||||||||||||||||||
Stockholders’ equity | 162,448 | 149,569 | ||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 1,583,070 | $ | 1,548,024 | ||||||||||||||||||||
Net interest income | $ | 40,110 | $ | 33,864 | ||||||||||||||||||||
Net interest rate spread(2) | 3.23 | % | 2.65 | % | ||||||||||||||||||||
Net interest-earning assets(3) | $ | 258,109 | $ | 227,837 | ||||||||||||||||||||
Net interest margin(4) | 3.53 | % | 3.03 | % | ||||||||||||||||||||
Average interest-earning assets to average interest-bearing liabilities | 120.53 | % | 118.06 | % |
(1) | Includes loans held for sale. |
(2) | Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities. | |
(3) | Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities. | |
(4) | Net interest margin represents the annualized net interest income divided by average total interest-earning assets. |
(5) | Includes mortgagors’ and investors’ escrow accounts. |
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For the Years Ended December 31, | ||||||||||||||||||||||||||||||||||||
2009 | 2008 | 2007 | ||||||||||||||||||||||||||||||||||
Interest | Interest | Interest | ||||||||||||||||||||||||||||||||||
Average | and | Yield/ | Average | and | Yield/ | Average | and | Yield/ | ||||||||||||||||||||||||||||
Balance | Dividends | Cost | Balance | Dividends | Cost | Balance | Dividends | Cost | ||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||||||||||||||
Loans receivable, net | $ | 1,333,770 | $ | 69,517 | 5.21 | % | $ | 1,193,416 | $ | 68,458 | 5.74 | % | $ | 1,076,674 | $ | 66,995 | 6.22 | % | ||||||||||||||||||
Total investment securities | 140,494 | 6,544 | 4.66 | 168,913 | 8,580 | 5.08 | 135,059 | 6,122 | 4.53 | |||||||||||||||||||||||||||
Federal Home Loan Bank stock | 17,007 | — | 0.00 | 13,812 | 473 | 3.42 | 10,248 | 658 | 6.42 | |||||||||||||||||||||||||||
Other earning assets | 931 | 1 | 0.11 | 2,376 | 34 | 1.43 | 2,443 | 102 | 4.18 | |||||||||||||||||||||||||||
Total interest-earning assets | 1,492,202 | 76,062 | 5.10 | 1,378,517 | 77,545 | 5.63 | 1,224,424 | 73,877 | 6.03 | |||||||||||||||||||||||||||
Non-interest-earning assets | 59,606 | 57,255 | 52,460 | |||||||||||||||||||||||||||||||||
Total assets | $ | 1,551,808 | $ | 1,435,772 | $ | 1,276,884 | ||||||||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||||||||||||||
NOW and money market accounts | $ | 312,439 | 2,494 | 0.80 | $ | 249,038 | 4,728 | 1.90 | $ | 191,192 | 3,323 | 1.74 | ||||||||||||||||||||||||
Savings accounts(1) | 136,981 | 607 | 0.44 | 128,467 | 824 | 0.64 | 130,734 | 835 | 0.64 | |||||||||||||||||||||||||||
Time deposits | 524,041 | 16,270 | 3.10 | 514,222 | 19,517 | 3.80 | 508,672 | 22,923 | 4.51 | |||||||||||||||||||||||||||
Total interest-bearing deposits | 973,461 | 19,371 | 1.99 | 891,727 | 25,069 | 2.81 | 830,598 | 27,081 | 3.26 | |||||||||||||||||||||||||||
Advances from the Federal Home Loan Bank | 285,258 | 10,404 | 3.65 | 271,545 | 9,877 | 3.64 | 183,219 | 8,496 | 4.64 | |||||||||||||||||||||||||||
Total interest-bearing liabilities | 1,258,719 | 29,775 | 2.37 | % | 1,163,272 | 34,946 | 3.00 | % | 1,013,817 | 35,577 | 3.51 | % | ||||||||||||||||||||||||
Non-interest-bearing liabilities | 142,017 | 117,983 | 106,398 | |||||||||||||||||||||||||||||||||
Total liabilities | 1,400,736 | 1,281,255 | 1,120,215 | |||||||||||||||||||||||||||||||||
Stockholders’ equity | 151,072 | 154,517 | 156,669 | |||||||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 1,551,808 | $ | 1,435,772 | $ | 1,276,884 | ||||||||||||||||||||||||||||||
Net interest income | $ | 46,287 | $ | 42,599 | $ | 38,300 | ||||||||||||||||||||||||||||||
Net interest rate spread(2) | 2.73 | % | 2.63 | % | 2.52 | % | ||||||||||||||||||||||||||||||
Net interest-earning assets(3) | $ | 233,483 | $ | 215,245 | $ | 210,607 | ||||||||||||||||||||||||||||||
Net interest margin(4) | 3.10 | % | 3.09 | % | 3.13 | % | ||||||||||||||||||||||||||||||
Average interest-earning assets to average interest-bearing liabilities | 118.55 | % | 118.50 | % | 120.77 | % |
(1) | Includes mortgagors’ and investors’ escrow accounts | |
(2) | Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities. | |
(3) | Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities. | |
(4) | Net interest margin represents the annualized net interest income divided by average total interest-earning assets. |
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Nine Months Ended | ||||||||||||
September 30, 2010 | ||||||||||||
Compared to | ||||||||||||
September 30, 2009 | ||||||||||||
Increase (Decrease) | Total | |||||||||||
Due to | Increase | |||||||||||
Volume | Rate | (Decrease) | ||||||||||
(In thousands) | ||||||||||||
Interest and dividend income: | ||||||||||||
Loans receivable | $ | 1,688 | $ | (822 | ) | $ | 866 | |||||
Securities interest, dividends & income from other assets | (575 | ) | (783 | ) | (1,358 | ) | ||||||
Total earning assets | 1,113 | (1,605 | ) | (492 | ) | |||||||
Interest expense: | ||||||||||||
NOW and money market accounts | 255 | (1,090 | ) | (835 | ) | |||||||
Savings accounts | 76 | (141 | ) | (65 | ) | |||||||
Time deposits | (1,039 | ) | (4,832 | ) | (5,871 | ) | ||||||
Total interest-bearing deposits | (708 | ) | (6,063 | ) | (6,771 | ) | ||||||
FHLBB Advances | (727 | ) | 760 | 33 | ||||||||
Total interest-bearing liabilities | (1,435 | ) | (5,303 | ) | (6,738 | ) | ||||||
Change in net interest income | $ | 2,548 | $ | 3,698 | $ | 6,246 | ||||||
Year Ended December 31, 2009 | Year Ended December 31, 2008 | |||||||||||||||||||||||
Compared to December 31, 2008 | Compared to December 31, 2007 | |||||||||||||||||||||||
Increase (Decrease) | Increase (Decrease) | |||||||||||||||||||||||
Due to | Due to | |||||||||||||||||||||||
Volume | Rate | Net | Volume | Rate | Net | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Interest and dividend income: | ||||||||||||||||||||||||
Loans receivable | $ | 7,637 | $ | (6,578 | ) | $ | 1,059 | $ | 5,235 | $ | (3,772 | ) | $ | 1,463 | ||||||||||
Securities interest, dividends & income from other assets | (1,210 | ) | (1,332 | ) | (2,542 | ) | 1,817 | 388 | 2,205 | |||||||||||||||
Total earning assets | 6,427 | (7,910 | ) | (1,483 | ) | 7,052 | (3,384 | ) | 3,668 | |||||||||||||||
Interest expense: | ||||||||||||||||||||||||
NOW and money market accounts | 991 | (3,225 | ) | (2,234 | ) | 1,076 | 329 | 1,405 | ||||||||||||||||
Savings accounts | 52 | (269 | ) | (217 | ) | (15 | ) | 4 | (11 | ) | ||||||||||||||
Time deposits | 367 | (3,614 | ) | (3,247 | ) | 253 | (3,659 | ) | (3,406 | ) | ||||||||||||||
Total interest-bearing deposits | 1,410 | (7,108 | ) | (5,698 | ) | 1,314 | (3,326 | ) | (2,012 | ) | ||||||||||||||
FHLBB Advances | 500 | 27 | 527 | 2,498 | (1,117 | ) | 1,381 | |||||||||||||||||
Total interest-bearing liabilities | 1,910 | (7,081 | ) | (5,171 | ) | 3,812 | (4,443 | ) | (631 | ) | ||||||||||||||
Change in net interest income | $ | 4,517 | $ | (829 | ) | $ | 3,688 | $ | 3,240 | $ | 1,059 | $ | 4,299 | |||||||||||
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More than | More than | |||||||||||||||||||
One | One Year | Three Years | ||||||||||||||||||
Year or | Through | Through | Over Five | |||||||||||||||||
Total | Less | Three Years | Five Years | Years | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Federal Home Loan Bank advances(1) | $ | 263,802 | $ | 40,170 | $ | 110,720 | $ | 89,912 | $ | 23,000 | ||||||||||
Interest expense payable on Federal Home Loan Bank Advances | 30,693 | 9,952 | 13,849 | 4,808 | 2,084 | |||||||||||||||
Operating leases(2) | 13,682 | 787 | 1,511 | 1,383 | 10,001 | |||||||||||||||
Deposits | 1,129,108 | 996,925 | 105,752 | 24,830 | 1,601 | |||||||||||||||
Other liabilities(3) | 2,876 | 28 | 547 | 646 | 1,655 | |||||||||||||||
Total Contractual Obligations | $ | 1,440,161 | $ | 1,047,862 | $ | 232,379 | $ | 121,579 | $ | 38,341 | ||||||||||
(1) | Secured under a blanket security agreement on qualifying assets, principally, mortgage loans. | |
(2) | Represents non-cancelable operating leases for offices and office equipment. | |
(3) | Consists of estimated benefit payments over the next 10 years to retirees under unfunded nonqualified pension plans. |
More than | More than | |||||||||||||||||||
One | One Year | Three Years | ||||||||||||||||||
Year or | Through | Through | Over Five | |||||||||||||||||
Total | Less | Three Years | Five Years | Years | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Real estate loan commitments(1) | $ | 35,330 | $ | 27,270 | $ | — | $ | — | $ | 8,060 | ||||||||||
Commercial business loan commitments(1) | 1,320 | 698 | 350 | 272 | — | |||||||||||||||
Commercial business loan lines of credit | 57,713 | 7,929 | 3,714 | — | 46,070 | |||||||||||||||
Unused portion of home equity lines of credit(2) | 125,511 | 378 | 3,619 | 17,965 | 103,549 | |||||||||||||||
Unused portion of construction loans | 86,492 | 37,711 | 35,365 | 1,893 | 11,523 | |||||||||||||||
Unused checking overdraft lines of credit(3) | 94 | 94 | — | — | — | |||||||||||||||
Standby letters of credit | 10,555 | 9,065 | 890 | 600 | — | |||||||||||||||
Total Other Commitments | $ | 317,015 | $ | 83,145 | $ | 43,938 | $ | 20,730 | $ | 169,202 | ||||||||||
(1) | Commitments for loans are extended to customers for up to 180 days after which they expire. | |
(2) | Unused portions of home equity lines of credit are available to the borrower for up to 10 years. | |
(3) | Unused portion of checking overdraft lines of credit are available to customers in “good standing”. |
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Market | Market | Institutions in | ||||||||||
Market Area | Share | Share Rank | Market | |||||||||
Tolland County, Connecticut | 25 | .61% | 2 | 12 | ||||||||
Hartford County, Connecticut | 1 | .87% | 10 | 25 | ||||||||
New London County, Connecticut | .51% | 16 | 16 |
Number of | ||||
Office Locations | Offices | |||
Hartford County, Connecticut | 13 | |||
New London County, Connecticut | 1 | |||
Tolland County, Connecticut | 8 | |||
Total: | 22 |
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At September 30, 2010 | ||||||||
Amount | Percent | |||||||
(Dollars in thousands) | ||||||||
Real estate loans: | ||||||||
Residential(1) | $ | 738,732 | 52.7 | % | ||||
Commercial | 453,627 | 32.3 | ||||||
Construction(2) | 69,874 | 5.0 | ||||||
Commercial business loans | 133,448 | 9.5 | ||||||
Installment, collateral and other loans | 6,380 | 0.5 | ||||||
Total loans | 1,402,061 | 100.00 | % | |||||
Net deferred loan costs and premiums | 549 | |||||||
Allowance for loan losses | (14,094 | ) | ||||||
Loans, net | $ | 1,388,516 | ||||||
(1) | Residential mortgage loans includeone-to-four family mortgage loans, home equity loans, and home equity lines of credit. |
(2) | Construction loans include commercial and residential loans and are reported net of undisbursed construction loans of $66.4 million as of September 30, 2010. |
At December 31, | ||||||||||||||||||||||||||||||||||||||||
2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||||||||||||||||||||||
Amount | Percent | Amount | Percent | Amount | Percent | Amount | Percent | Amount | Percent | |||||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||
Real estate loans: | ||||||||||||||||||||||||||||||||||||||||
Residential(1) | $ | 754,838 | 54.98 | % | $ | 746,041 | 57.26 | % | $ | 666,003 | 59.18 | % | $ | 640,076 | 61.46 | % | $ | 557,306 | 64.31 | % | ||||||||||||||||||||
Commercial | 426,028 | 31.03 | 351,474 | 26.97 | 284,460 | 25.28 | 232,550 | 22.33 | 149,006 | 17.19 | ||||||||||||||||||||||||||||||
Construction(2) | 71,078 | 5.18 | 89,099 | 6.84 | 70,617 | 6.27 | 63,902 | 6.14 | 47,105 | 5.44 | ||||||||||||||||||||||||||||||
Commercial business loans | 113,240 | 8.25 | 106,684 | 8.19 | 92,869 | 8.25 | 97,234 | 9.34 | 109,099 | 12.59 | ||||||||||||||||||||||||||||||
Installment, collateral and other loans | 7,742 | 0.56 | 9,629 | 0.74 | 11,469 | 1.02 | 7,607 | 0.73 | 4,119 | 0.47 | ||||||||||||||||||||||||||||||
Total loans | 1,372,926 | 100.00 | % | 1,302,927 | 100.00 | % | 1,125,418 | 100.00 | % | 1,041,369 | 100.00 | % | 866,635 | 100.00 | % | |||||||||||||||||||||||||
Net deferred loan costs and premiums | 632 | 1,417 | 1,529 | 1,813 | 1,740 | |||||||||||||||||||||||||||||||||||
Allowance for loan losses | (12,539 | ) | (12,553 | ) | (10,620 | ) | (9,827 | ) | (8,675 | ) | ||||||||||||||||||||||||||||||
Loans, net | $ | 1,361,019 | $ | 1,291,791 | $ | 1,116,327 | $ | 1,033,355 | $ | 859,700 | ||||||||||||||||||||||||||||||
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(1) | Residential mortgage loans includeone-to-four family mortgage loans, home equity loans, and home equity lines of credit. | |
(2) | Construction loans include commercial and residential loans and are reported net of undisbursed construction loans of $86.5 million, $93.9 million, $96.8 million, $93.6 million and $64.1 million as of December 31, 2009, 2008, 2007, 2006 and 2005, respectively. |
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At September 30, 2010 | At December 31, 2009 | |||||||||||||||
Amount | Percentage | Amount | Percentage | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Type of Commercial Real Estate Loan | ||||||||||||||||
Regional CRE Program | $ | 155,933 | 34.4 | % | $ | 140,566 | 33.0 | % | ||||||||
Owner Occupied | 38,169 | 8.4 | 31,968 | 7.5 | ||||||||||||
Industrial | 36,902 | 8.1 | 29,952 | 7.0 | ||||||||||||
Office | 53,892 | 11.9 | 45,454 | 10.7 | ||||||||||||
Retail | 65,883 | 14.5 | 58,011 | 13.6 | ||||||||||||
Multi-Family | 38,414 | 8.5 | 38,719 | 9.1 | ||||||||||||
Subdivisions | — | — | 8,132 | 1.9 | ||||||||||||
Land | 12,619 | 2.8 | 3,270 | 0.8 | ||||||||||||
Other | 51,815 | 11.4 | 69,956 | 16.4 | ||||||||||||
Total Commercial Real Estate Loans | $ | 453,627 | 100.0 | % | $ | 426,028 | 100.0 | % | ||||||||
At September 30, 2010 | At December 31, 2009 | |||||||||||||||
Amount | Percentage | Amount | Percentage | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Geographic Region | ||||||||||||||||
Connecticut | $ | 304,223 | 67.0 | % | $ | 300,334 | 70.5 | % | ||||||||
Western/Upstate New York | 51,225 | 11.3 | 52,738 | 12.4 | ||||||||||||
Metropolitan New York | 5,874 | 1.3 | 2,984 | 0.7 | ||||||||||||
Northern/Central New Jersey | 35,677 | 7.9 | 42,280 | 9.9 | ||||||||||||
Southern New Jersey/Pennsylvania | 24,399 | 5.4 | 21,313 | 5.0 | ||||||||||||
New England (not including Connecticut) | 32,229 | 7.1 | 6,379 | 1.5 | ||||||||||||
Total Commercial Real Estate Loans | $ | 453,627 | 100.0 | % | $ | 426,028 | 100.0 | % | ||||||||
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Loans Maturing | ||||||||||||||||
After One | ||||||||||||||||
Within One | But Within | After Five | ||||||||||||||
Year | Five Years | Years | Total | |||||||||||||
(In thousands) | ||||||||||||||||
December 31, 2009 | ||||||||||||||||
Real estate loans: | ||||||||||||||||
Residential(1) | $ | 1,329 | $ | 27,178 | $ | 726,331 | $ | 754,838 | ||||||||
Commercial | 8,063 | 76,036 | 341,929 | 426,028 | ||||||||||||
Construction | 11,130 | 21,400 | 38,548 | 71,078 | ||||||||||||
Commercial business loans | 2,378 | 33,970 | 76,892 | 113,240 | ||||||||||||
Installment, collateral and other loans | 228 | 5,603 | 1,911 | 7,742 | ||||||||||||
Total | $ | 23,128 | $ | 164,187 | $ | 1,185,611 | $ | 1,372,926 | ||||||||
(1) | Residential loans includeone-to-four family mortgage loans, home equity loans, and home equity lines of credit. |
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Due After December 31, 2010 | ||||||||||||
Fixed | Adjustable | Total | ||||||||||
(In thousands) | ||||||||||||
Real estate loans: | ||||||||||||
Residential(1) | $ | 456,689 | $ | 296,820 | $ | 753,509 | ||||||
Commercial | 164,693 | 253,272 | 417,965 | |||||||||
Construction | — | 59,948 | 59,948 | |||||||||
Commercial business loans | 17,520 | 93,342 | 110,862 | |||||||||
Installment, collateral and other loans | 6,941 | 573 | 7,514 | |||||||||
Total loans | $ | 645,843 | $ | 703,955 | $ | 1,349,798 | ||||||
(1) | Residential loans includeone-to-four family mortgage loans, home equity loans, and home equity lines of credit. |
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Loans Delinquent for | ||||||||||||||||||||||||
60-89 Days | 90 Days and Over | Total | ||||||||||||||||||||||
Number | Amount | Number | Amount | Number | Amount | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
At September 30, 2010 | ||||||||||||||||||||||||
Residential(1) | 8 | $ | 730 | 28 | $ | 3,853 | 36 | $ | 4,583 | |||||||||||||||
Commercial | — | — | 5 | 3,354 | 5 | 3,354 | ||||||||||||||||||
Construction | — | — | 3 | 1,198 | 3 | 1,198 | ||||||||||||||||||
Commercial business loans | 4 | 242 | 8 | 765 | 12 | 1,007 | ||||||||||||||||||
Installment, collateral and other loans | 2 | 25 | 2 | 8 | 4 | 33 | ||||||||||||||||||
Total | 14 | $ | 997 | 46 | $ | 9,178 | 60 | $ | 10,175 | |||||||||||||||
At December 31, 2009 | ||||||||||||||||||||||||
Residential(1) | 11 | $ | 2,072 | 17 | $ | 1,970 | 28 | $ | 4,042 | |||||||||||||||
Commercial | 1 | 421 | 5 | 2,242 | 6 | 2,663 | ||||||||||||||||||
Construction | — | — | 7 | 6,630 | 7 | 6,630 | ||||||||||||||||||
Commercial business loans | 3 | 220 | 3 | 61 | 6 | 281 | ||||||||||||||||||
Installment, collateral and other loans | — | — | — | — | — | — | ||||||||||||||||||
Total | 15 | $ | 2,713 | 32 | $ | 10,903 | 47 | $ | 13,616 | |||||||||||||||
At December 31, 2008 | ||||||||||||||||||||||||
Residential(1) | 9 | $ | 1,237 | 14 | $ | 1,685 | 23 | $ | 2,922 | |||||||||||||||
Commercial | 2 | 652 | 2 | 1,202 | 4 | 1,854 | ||||||||||||||||||
Construction | — | — | 4 | 3,021 | 4 | 3,021 | ||||||||||||||||||
Commercial business loans | 3 | 923 | 2 | 372 | 5 | 1,295 | ||||||||||||||||||
Installment, collateral and other loans | 3 | 47 | 2 | 11 | 5 | 58 | ||||||||||||||||||
Total | 17 | $ | 2,859 | 24 | $ | 6,291 | 41 | $ | 9,150 | |||||||||||||||
At December 31, 2007 | ||||||||||||||||||||||||
Residential(1) | 4 | $ | 389 | 6 | $ | 407 | 10 | $ | 796 | |||||||||||||||
Commercial | 2 | 79 | 1 | 74 | 3 | 153 | ||||||||||||||||||
Construction | 1 | 515 | — | — | 1 | 515 | ||||||||||||||||||
Commercial business loans | 2 | 164 | 2 | 692 | 4 | 856 | ||||||||||||||||||
Installment, collateral and other loans | 2 | 4 | — | — | 2 | 4 | ||||||||||||||||||
Total | 11 | $ | 1,151 | 9 | $ | 1,173 | 20 | $ | 2,324 | |||||||||||||||
(1) | Residential loans includeone-to-four family mortgage loans, home equity loans, and home equity lines of credit. |
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At September 30, | At December 31, | |||||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | 2005 | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Non-accrual loans: | ||||||||||||||||||||||||
Residential(1) | $ | 5,668 | $ | 3,106 | $ | 2,607 | $ | 407 | $ | 422 | $ | 821 | ||||||||||||
Commercial | 2,166 | 2,242 | 2,726 | 74 | 311 | 667 | ||||||||||||||||||
Construction | 3,207 | 6,630 | 4,385 | — | — | — | ||||||||||||||||||
Commercial business loans | 529 | 61 | 334 | 692 | 114 | 172 | ||||||||||||||||||
Installment, collateral and other loans | 9 | 7 | 11 | 5 | 8 | 6 | ||||||||||||||||||
Total non-accrual loans(2) | 11,579 | 12,046 | 10,063 | 1,178 | 855 | 1,666 | ||||||||||||||||||
Accruing loans past due 90 days or more | — | — | — | — | — | 4,897 | (4) | |||||||||||||||||
Other accruing loans | — | — | — | — | 78 | — | ||||||||||||||||||
Troubled debt restructurings(3) | — | — | 372 | 391 | 560 | 614 | ||||||||||||||||||
Total non-performing loans | 11,579 | 12,046 | 10,435 | 1,569 | 1,493 | 7,177 | ||||||||||||||||||
Other real estate owned | 5,895 | 3,061 | — | — | — | — | ||||||||||||||||||
Other non-performing assets | — | — | — | — | — | — | ||||||||||||||||||
Total non-performing assets | $ | 17,474 | $ | 15,107 | $ | 10,435 | $ | 1,569 | $ | 1,493 | $ | 7,177 | ||||||||||||
Total non-performing loans to total loans | 0.83 | % | 0.88 | % | 0.80 | % | 0.14 | % | 0.14 | % | 0.83 | %(5) | ||||||||||||
Total non-performing loans to total assets | 0.71 | % | 0.77 | % | 0.68 | % | 0.12 | % | 0.12 | % | 0.68 | %(6) |
(1) | Residential loans includeone-to-four family mortgage loans, home equity loans, and home equity lines of credit. |
(2) | The amount of income that was contractually due but not recognized on non-accrual loans totaled $610,000, $233,000 and $237,000, respectively, for the nine months ended September 30, 2010 and the years ended December 31, 2009 and 2008. |
(3) | A loan whose terms have been modified due to the financial difficulties of a borrower is reported as a troubled debt restructuring (“TDR”). All TDRs are placed on non-accrual status until the loan qualifies for return to accrual status. Loans qualify for return to accrual status once they have demonstrated performance with the restructured terms of the loan agreement for a minimum of six months. TDRs are by definition non-performing loans and are reported separately from non-accrual loans within the non-performing loan category. | |
(4) | Balance represents a loan that was fully guaranteed by the United States Department of Agriculture and was repaid in full in January 2006. |
(5) | The ratio is 0.26% when excluding the $4.9 million fully guaranteed United States Department of Agriculture loan that was past due 90 days and still accruing as of December 31, 2005 which was repaid in full in January 2006. |
(6) | The ratio is 0.22% when excluding the $4.9 million fully guaranteed United States Department of Agriculture loan that was past due 90 days and still accruing as of December 31, 2005 which was repaid in full in January 2006. |
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At or for the Nine | ||||
Months Ended | ||||
September 30, 2010 | ||||
(Dollars in thousands) | ||||
Balance at beginning of period | $ | 12,539 | ||
Provision for loan losses | 3,114 | |||
Charge-offs: | ||||
Real estate(1) | (1,413 | ) | ||
Commercial business loans | (161 | ) | ||
Installment and collateral loans | (20 | ) | ||
Total charge-offs | (1,594 | ) | ||
Recoveries: | ||||
Real estate(1) | 9 | |||
Commercial business loans | 10 | |||
Installment and collateral loans | 16 | |||
Total recoveries | 35 | |||
Net charge-offs | (1,559 | ) | ||
Allowance at end of period | $ | 14,094 | ||
Ratios: | ||||
Allowance for loan losses to non-performing loans | 121.72 | % | ||
Allowance for loan losses to total loans outstanding | 1.01 | % | ||
Net charge-offs to average loans outstanding | 0.11 | % |
(1) | Real estate loans includeone-to-four family residential mortgage loans, home equity loans, home equity lines of credit, commercial real estate loans and construction loans. |
At or for the Years Ended December 31, | ||||||||||||||||||||
2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Balance at beginning of year | $ | 12,553 | $ | 10,620 | $ | 9,827 | $ | 8,675 | $ | 6,371 | ||||||||||
Provision for loan losses | 1,961 | 2,393 | 749 | 1,681 | 2,700 | |||||||||||||||
Charge-offs: | ||||||||||||||||||||
Real estate(1) | (1,471 | ) | (257 | ) | (21 | ) | (45 | ) | — | |||||||||||
Commercial business loans | (593 | ) | (314 | ) | (76 | ) | (498 | ) | (591 | ) | ||||||||||
Installment and collateral loans | (49 | ) | (50 | ) | (76 | ) | (78 | ) | (55 | ) | ||||||||||
Total charge-offs | (2,113 | ) | (621 | ) | (173 | ) | (621 | ) | (646 | ) | ||||||||||
Recoveries: | ||||||||||||||||||||
Real estate(1) | 8 | 9 | 5 | 5 | 31 | |||||||||||||||
Commercial business loans | 114 | 122 | 191 | 70 | 209 | |||||||||||||||
Installment and collateral loans | 16 | 30 | 21 | 17 | 10 | |||||||||||||||
Total recoveries | 138 | 161 | 217 | 92 | 250 | |||||||||||||||
Net (charge-offs) recoveries | (1,975 | ) | (460 | ) | 44 | (529 | ) | (396 | ) | |||||||||||
Allowance at end of year | $ | 12,539 | $ | 12,553 | $ | 10,620 | $ | 9,827 | $ | 8,675 | ||||||||||
Ratios: | ||||||||||||||||||||
Allowance for loan losses to non-performing loans at end of year | 104.09 | % | 120.30 | % | 676.86 | % | 658.20 | % | 120.87 | % | ||||||||||
Allowance for loan losses to total loans outstanding at end of year | 0.91 | % | 0.96 | % | 0.94 | % | 0.94 | % | 1.00 | % | ||||||||||
Net charge-offs to average loans outstanding | 0.15 | % | 0.04 | % | 0.00 | % | 0.05 | % | 0.05 | % |
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(1) | Real estate loans includeone-to-four family residential mortgage loans, home equity loans, home equity lines of credit, commercial real estate loans and construction loans. |
At September 30, 2010 | ||||||||||||
% of | % of Loans | |||||||||||
Allowance | Allowance | in Category | ||||||||||
for Loan | for Loan | to Total | ||||||||||
Losses | Losses | Loans | ||||||||||
(Dollars in thousands) | ||||||||||||
Real Estate: | ||||||||||||
Residential(1) | $ | 4,607 | 32.69 | % | 52.67 | % | ||||||
Commercial | 5,018 | 35.60 | % | 32.36 | % | |||||||
Construction | 1,698 | 12.05 | % | 4.98 | % | |||||||
Commercial business loans | 2,400 | 17.03 | % | 9.52 | % | |||||||
Installment, collateral and other | 92 | 0.65 | % | 0.47 | % | |||||||
Unallocated allowance | 279 | 1.98 | % | — | ||||||||
Total allowance for loan losses | $ | 14,094 | 100 | % | 100 | % | ||||||
(1) | Residential loans includeone-to-four family mortgage loans, home equity loans, and home equity lines of credit. |
At December 31, | ||||||||||||||||||||||||||||||||||||
2009 | 2008 | 2007 | ||||||||||||||||||||||||||||||||||
% of | % of Loans | % of | % of Loans | % of | % of Loans | |||||||||||||||||||||||||||||||
Allowance | Allowance | in Category | Allowance | Allowance | in Category | Allowance | Allowance | in Category | ||||||||||||||||||||||||||||
for Loan | for Loan | to Total | for Loan | for Loan | to Total | for Loan | for Loan | to Total | ||||||||||||||||||||||||||||
Losses | Losses | Loans | Losses | Losses | Loans | Losses | Losses | Loans | ||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||||||
Real Estate: | ||||||||||||||||||||||||||||||||||||
Residential(1) | $ | 4,243 | 33.84 | % | 54.97 | % | $ | 3,952 | 31.48 | % | 57.26 | % | $ | 2,673 | 25.17 | % | 59.18 | % | ||||||||||||||||||
Commercial | 4,662 | 37.18 | 31.03 | 3,978 | 31.69 | 26.97 | 3,387 | 31.89 | 25.28 | |||||||||||||||||||||||||||
Construction | 1,490 | 11.88 | 5.18 | 1,925 | 15.33 | 6.84 | 1,285 | 12.10 | 6.27 | |||||||||||||||||||||||||||
Commercial business loans | 1,832 | 14.61 | 8.25 | 2,180 | 17.37 | 8.19 | 2,102 | 19.79 | 8.25 | |||||||||||||||||||||||||||
Installment, collateral and other | 103 | 0.82 | 0.57 | 306 | 2.44 | 0.74 | 335 | 3.16 | 1.02 | |||||||||||||||||||||||||||
Unallocated allowance | 209 | 1.67 | — | 212 | 1.69 | — | 838 | 7.89 | — | |||||||||||||||||||||||||||
Total allowance for loan losses | $ | 12,539 | 100.00 | % | 100.00 | % | $ | 12,553 | 100.00 | % | 100.00 | % | $ | 10,620 | 100.00 | % | 100.00 | % | ||||||||||||||||||
(1) | Residential loans includeone-to-four family mortgage loans, home equity loans, and home equity lines of credit. |
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At December 31, | ||||||||||||||||||||||||
2006 | 2005 | |||||||||||||||||||||||
% of | % of Loans | % of | % of Loans | |||||||||||||||||||||
Allowance | Allowance | in Category | Allowance | Allowance | in Category | |||||||||||||||||||
for Loan | for Loan | to Total | for Loan | for Loan | to Total | |||||||||||||||||||
Losses | Losses | Loans | Losses | Losses | Loans | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Real Estate: | ||||||||||||||||||||||||
Residential(1) | $ | 1,051 | 10.70 | % | 61.46 | % | $ | 1,035 | 11.93 | % | 64.31 | % | ||||||||||||
Commercial | 4,241 | 43.16 | 22.33 | 3,459 | 39.88 | 17.19 | ||||||||||||||||||
Construction | 959 | 9.76 | 6.14 | 707 | 8.15 | 5.44 | ||||||||||||||||||
Commercial business loans | 1,959 | 19.93 | 9.34 | 1,541 | 17.76 | 12.59 | ||||||||||||||||||
Installment, collateral and other | 55 | 0.56 | 0.73 | 27 | 0.31 | 0.47 | ||||||||||||||||||
Unallocated allowance | 1,562 | 15.89 | — | 1,906 | 21.97 | — | ||||||||||||||||||
Total allowance for loan losses | $ | 9,827 | 100.00 | % | 100.00 | % | $ | 8,675 | 100.00 | % | 100.00 | % | ||||||||||||
(1) | Residential loans includeone-to-four family mortgage loans, home equity loans, and home equity lines of credit. |
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At September 30, | At December 31, | |||||||||||||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | |||||||||||||||||||||||||||||
Amortized | Fair | Amortized | Fair | Amortized | Fair | Amortized | Fair | |||||||||||||||||||||||||
Cost | Value | Cost | Value | Cost | Value | Cost | Value | |||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Available for Sale: | ||||||||||||||||||||||||||||||||
U.S. Government and government-sponsored enterprise obligations | $ | 45,997 | $ | 46,127 | $ | 7,017 | $ | 7,052 | $ | 2,031 | $ | 2,048 | $ | 14,016 | $ | 14,036 | ||||||||||||||||
Government-sponsored residential mortgage-backed securities | 56,334 | 59,818 | 72,537 | 75,967 | 117,517 | 120,395 | 96,494 | 97,096 | ||||||||||||||||||||||||
Corporate debt securities | 5,888 | 4,671 | 5,879 | 4,656 | 4,831 | 4,887 | 4,068 | 3,863 | ||||||||||||||||||||||||
Other debt securities | — | — | 722 | 731 | 725 | 739 | 978 | 995 | ||||||||||||||||||||||||
Marketable equity securities | 11,271 | 15,527 | 10,509 | 14,345 | 10,437 | 12,940 | 15,744 | 20,141 | ||||||||||||||||||||||||
Other equity securities | — | — | — | — | 241 | 241 | 241 | 241 | ||||||||||||||||||||||||
Total available for sale | $ | 119,490 | $ | 126,143 | $ | 96,664 | $ | 102,751 | $ | 135,782 | $ | 141,250 | $ | 131,541 | $ | 136,372 | ||||||||||||||||
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10/1/11 - 9/30/15 | 10/1/15 - 9/30/20 | |||||||||||||||||||||||||||||||||||||||
<9/30/11 | More than One Year | More than Five Years | 10/1/20+ | |||||||||||||||||||||||||||||||||||||
One Year or Less | Through Five Years | Through Ten Years | More than Ten Years | Total Securities | ||||||||||||||||||||||||||||||||||||
Weighted- | Weighted- | Weighted- | Weighted- | Weighted- | ||||||||||||||||||||||||||||||||||||
Fair | Average | Fair | Average | Fair | Average | Fair | Average | Fair | Average | |||||||||||||||||||||||||||||||
September 30, 2010 | Value | Yield | Value | Yield | Value | Yield | Value | Yield | Value | Yield | ||||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||
Available for Sale | ||||||||||||||||||||||||||||||||||||||||
Debt Securities: | ||||||||||||||||||||||||||||||||||||||||
U.S. Government and government-sponsored enterprise obligations | $ | 2,002 | 0.36 | % | $ | 5,019 | 2.01 | % | $ | 39,106 | 2.31 | % | $ | — | — | % | $ | 46,127 | 2.19 | % | ||||||||||||||||||||
Mortgage-backed securities | — | — | 2,184 | 4.37 | 388 | 6.26 | 57,246 | 5.15 | 59,818 | 5.13 | ||||||||||||||||||||||||||||||
Corporate debt securities | 100 | 4.91 | 2,935 | 0.40 | — | — | 1,636 | 0.84 | 4,671 | 0.69 | ||||||||||||||||||||||||||||||
Total debt securities | $ | 2,102 | 0.27 | % | $ | 10,138 | 2.07 | % | $ | 39,494 | 2.35 | % | $ | 58,882 | 5.03 | % | 110,616 | 3.64 | % | |||||||||||||||||||||
Marketable equity securities | 15,527 | |||||||||||||||||||||||||||||||||||||||
Total securities available for sale | $ | 126,143 | ||||||||||||||||||||||||||||||||||||||
More than One Year | More than Five Years | |||||||||||||||||||||||||||||||||||||||
One Year or Less | Through Five Years | Through Ten Years | More than Ten Years | Total Securities | ||||||||||||||||||||||||||||||||||||
Weighted- | Weighted- | Weighted- | Weighted- | Weighted- | ||||||||||||||||||||||||||||||||||||
Fair | Average | Fair | Average | Fair | Average | Fair | Average | Fair | Average | |||||||||||||||||||||||||||||||
December 31, 2009 | Value | Yield | Value | Yield | Value | Yield | Value | Yield | Value | Yield | ||||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||
Available for Sale | ||||||||||||||||||||||||||||||||||||||||
Debt Securities: | ||||||||||||||||||||||||||||||||||||||||
U.S. Government and government-sponsored enterprise obligations | $ | 2,018 | 0.36 | % | $ | 5,035 | 3.41 | % | $ | — | — | % | $ | — | — | % | $ | 7,053 | 2.53 | % | ||||||||||||||||||||
Mortgage-backed securities | — | — | 1,780 | 4.01 | 1,909 | 5.13 | 72,278 | 5.18 | 75,967 | 5.16 | ||||||||||||||||||||||||||||||
Corporate debt securities | — | — | 2,971 | 0.55 | — | — | 1,684 | 0.80 | 4,655 | 0.67 | ||||||||||||||||||||||||||||||
Other debt securities | — | — | — | — | 731 | 4.49 | — | — | 731 | 4.49 | ||||||||||||||||||||||||||||||
Total debt securities | $ | 2,018 | 0.36 | % | $ | 9,786 | 2.65 | % | $ | 2,640 | 4.95 | % | $ | 73,962 | 5.08 | % | 88,406 | 4.70 | % | |||||||||||||||||||||
Marketable equity securities | 14,345 | |||||||||||||||||||||||||||||||||||||||
Total securities available for sale | $ | 102,751 | ||||||||||||||||||||||||||||||||||||||
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At September 30, 2010 | At December 31, | |||||||||||||||||||||||||||||||||||||||||||||||
2009 | 2008 | 2007 | ||||||||||||||||||||||||||||||||||||||||||||||
Weighted- | Weighted- | Weighted- | Weighted- | |||||||||||||||||||||||||||||||||||||||||||||
Average | Average | Average | Average | |||||||||||||||||||||||||||||||||||||||||||||
Balance | Percent | Rate | Balance | Percent | Rate | Balance | Percent | Rate | Balance | Percent | Rate | |||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||
Deposit type: | ||||||||||||||||||||||||||||||||||||||||||||||||
Demand deposits | $ | 164,578 | 14.0 | % | 0.00 | % | $ | 150,484 | 13.3 | % | 0.00 | % | $ | 116,113 | 11.1 | % | 0.00 | % | $ | 99,378 | 10.5 | % | 0.00 | % | ||||||||||||||||||||||||
NOW accounts | 113,406 | 9.7 | 0.31 | 108,099 | 9.6 | 0.34 | 86,943 | 8.4 | 0.43 | 85,854 | 9.0 | 0.51 | ||||||||||||||||||||||||||||||||||||
Regular savings | 157,893 | 13.4 | 0.30 | 143,601 | 12.7 | 0.30 | 121,527 | 11.7 | 0.60 | 121,800 | 12.8 | 0.60 | ||||||||||||||||||||||||||||||||||||
Money market and investment savings | 231,999 | 19.7 | 0.52 | 234,737 | 20.8 | 0.65 | 188,110 | 18.0 | 1.78 | 120,971 | 12.7 | 3.15 | ||||||||||||||||||||||||||||||||||||
Club accounts | 1,123 | 0.1 | 2.04 | 247 | 0.0 | 2.04 | 227 | 0.0 | 2.04 | 216 | 0.0 | 2.04 | ||||||||||||||||||||||||||||||||||||
Total core accounts | 668,999 | 56.9 | 0.31 | 637,168 | 56.4 | 0.36 | 512,920 | 49.2 | 0.87 | 428,219 | 45.0 | 1.16 | ||||||||||||||||||||||||||||||||||||
Time deposits | 505,979 | 43.1 | 1.95 | 491,940 | 43.6 | 2.29 | 529,588 | 50.8 | 3.57 | 522,819 | 55.0 | 4.49 | ||||||||||||||||||||||||||||||||||||
Total deposits | $ | 1,174,978 | 100.0 | % | 1.01 | % | $ | 1,129,108 | 100.0 | % | 1.20 | % | $ | 1,042,508 | 100.0 | % | 2.24 | % | $ | 951,038 | 100.0 | % | 2.99 | % | ||||||||||||||||||||||||
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At | At | |||||||
September 30, | December 31, | |||||||
2010 | 2009 | |||||||
(In thousands) | ||||||||
Three months or less | $ | 39,884 | $ | 47,890 | ||||
Over three months through six months | 25,043 | 26,563 | ||||||
Over six months through one year | 31,326 | 52,149 | ||||||
Over one year through three years | 65,797 | 37,537 | ||||||
Over three years | 20,595 | 4,338 | ||||||
Total | $ | 182,645 | $ | 168,477 | ||||
September 30, | At December 31, | |||||||||||||||
2010 | 2009 | 2008 | 2007 | |||||||||||||
(In thousands) | ||||||||||||||||
Interest Rate: | ||||||||||||||||
0.00% — 1.00% | $ | 112,362 | $ | 56,155 | $ | 1,987 | $ | 1,178 | ||||||||
1.01% — 2.00% | 230,358 | 204,712 | 632 | 1,002 | ||||||||||||
2.01% — 3.00% | 87,512 | 101,412 | 132,356 | 60,161 | ||||||||||||
3.01% — 4.00% | 42,143 | 82,360 | 296,257 | 42,480 | ||||||||||||
4.01% — 5.00% | 29,912 | 42,259 | 87,475 | 327,519 | ||||||||||||
5.01% — 6.00% | 3,692 | 5,042 | 10,881 | 90,479 | ||||||||||||
Total | $ | 505,979 | $ | 491,940 | $ | 529,588 | $ | 522,819 | ||||||||
Over Two | Over | Percentage of | ||||||||||||||||||||||||||||||
Over One | Years to | Three | Over Four | Total Time | ||||||||||||||||||||||||||||
One Year | Year to Two | Three | Years to | Years to | Deposit | |||||||||||||||||||||||||||
and Under | Years | Years | Four Years | Five Years | Thereafter | Total | Accounts | |||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||
Interest Rate | ||||||||||||||||||||||||||||||||
0.00% — 1.00% | $ | 111,479 | $ | 883 | — | — | — | — | 112,362 | 22.20 | % | |||||||||||||||||||||
1.01% — 2.00% | 140,058 | 89,305 | 959 | 36 | — | — | 230,358 | 45.53 | ||||||||||||||||||||||||
2.01% — 3.00% | 28,518 | 28,717 | 11,239 | 4,551 | 14,487 | — | 87,512 | 17.30 | ||||||||||||||||||||||||
3.01% — 4.00% | 5,325 | 2,941 | 8,867 | 2,983 | 22,027 | — | 42,143 | 8.33 | ||||||||||||||||||||||||
4.01% — 5.00% | 10,273 | 12,475 | 4,304 | 1,431 | 378 | 1,051 | 29,912 | 5.91 | ||||||||||||||||||||||||
5.01% — 6.00% | 1,193 | 2,047 | 427 | — | — | 25 | 3,692 | 0.73 | ||||||||||||||||||||||||
Total | $ | 296,846 | $ | 136,368 | $ | 25,796 | $ | 9,001 | $ | 36,892 | $ | 1,076 | $ | 505,979 | 100.00 | % | ||||||||||||||||
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Over Two | Over | Percentage of | ||||||||||||||||||||||||||||||
Over One | Years to | Three | Over Four | Total Time | ||||||||||||||||||||||||||||
One Year | Year to Two | Three | Years to | Years to | Deposit | |||||||||||||||||||||||||||
and Under | Years | Years | Four Years | Five Years | Thereafter | Total | Accounts | |||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||
Interest Rate | ||||||||||||||||||||||||||||||||
0.00% — 1.00% | $ | 56,150 | $ | 5 | $ | — | $ | — | $ | — | $ | — | $ | 56,155 | 11.42 | % | ||||||||||||||||
1.01% — 2.00% | 182,145 | 22,475 | 92 | — | — | — | 204,712 | 41.61 | ||||||||||||||||||||||||
2.01% — 3.00% | 40,919 | 47,703 | 4,552 | 767 | 7,471 | — | 101,412 | 20.62 | ||||||||||||||||||||||||
3.01% — 4.00% | 62,276 | 4,958 | 3,679 | 8,401 | 3,046 | — | 82,360 | 16.74 | ||||||||||||||||||||||||
4.01% — 5.00% | 16,238 | 9,242 | 10,306 | 4,435 | 461 | 1,577 | 42,259 | 8.59 | ||||||||||||||||||||||||
5.01% — 6.00% | 2,029 | 1,533 | 1,207 | 249 | — | 24 | 5,042 | 1.02 | ||||||||||||||||||||||||
Total | $ | 359,757 | $ | 85,916 | $ | 19,836 | $ | 13,852 | $ | 10,978 | $ | 1,601 | $ | 491,940 | 100.00 | % | ||||||||||||||||
Nine Months Ended | ||||||||||||||||
September 30, | Years Ended December 31, | |||||||||||||||
2010 | 2009 | 2008 | 2007 | |||||||||||||
(In thousands) | ||||||||||||||||
Beginning balance | $ | 978,624 | $ | 926,395 | $ | 851,660 | $ | 791,443 | ||||||||
Net increase in deposits before interest credited | 23,108 | 32,858 | 49,666 | 33,136 | ||||||||||||
Interest credited | 8,668 | 19,371 | 25,069 | 27,081 | ||||||||||||
Net increase in deposits | 31,776 | 52,229 | 74,735 | 60,217 | ||||||||||||
Ending balance | $ | 1,010,400 | $ | 978,624 | $ | 926,395 | $ | 851,660 | ||||||||
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Name(1) | Age(2) | Position | ||||
William J. McGurk | 68 | President and Chief Executive Officer | ||||
Christopher E. Buchholz | 56 | Executive Vice President | ||||
Richard J. Trachimowicz | 56 | Executive Vice President | ||||
John T. Lund | 40 | Senior Vice President, Chief Financial Officer and Treasurer | ||||
Judy L. Keppner Clark | 51 | Secretary |
(1) | Joseph F. Jeamel, Jr. served as Executive Vice President of Existing Rockville Financial until his planned retirement, effective as of June 30, 2010. |
(2) | Ages presented are as of September 30, 2010. |
Name(1) | Age(2) | Position | ||||
William J. McGurk | 68 | President and Chief Executive Officer | ||||
Christopher E. Buchholz | 56 | Executive Vice President | ||||
Richard J. Trachimowicz | 56 | Executive Vice President | ||||
John T. Lund | 40 | Senior Vice President, Chief Financial Officer and Treasurer | ||||
Richard C. DiChiara | 59 | Senior Vice President, Retail Banking Officer | ||||
Mark A. Kucia | 47 | Senior Vice President, Commercial Banking Officer | ||||
Laurie A. Rosner | 46 | Senior Vice President, Marketing and Administrative Services Officer | ||||
Darlene S. White | 53 | Senior Vice President, Operations Officer |
(1) | Joseph F. Jeamel, Jr. served as Chief Operating Officer of Rockville Bank until his planned retirement, effective as of June 30, 2010. |
(2) | Ages presented are as of September 30, 2010. |
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Positions Held with | Director | Current Term | ||||||||||||
Name(1) | New Rockville Financial | Age(2) | Since | Expires | ||||||||||
C. Perry Chilberg | 62 | 1999 | 2011 | |||||||||||
Joseph F. Jeamel, Jr. | 71 | 2007 | 2011 | |||||||||||
Kristen A. Johnson | 44 | 2010 | 2011 | |||||||||||
Rosemarie Novello Papa | 66 | 2007 | 2011 | |||||||||||
Michael A. Bars | Vice Chairman | 55 | 2003 | 2012 | ||||||||||
Pamela J. Guenard | 48 | 2007 | 2012 | |||||||||||
Thomas S. Mason | 70 | 1989 | 2012 | |||||||||||
Peter F. Olson | 70 | 1980 | 2012 | |||||||||||
Raymond H. Lefurge, Jr. | Chairman | 61 | 2003 | 2013 | ||||||||||
Stuart E. Magdefrau | 56 | 1995 | 2013 | |||||||||||
William J. McGurk | President/Chief Executive Officer | 68 | 1981 | 2013 | ||||||||||
David A. Engelson | 66 | 1998 | 2014 | |||||||||||
Richard M. Tkacz | 57 | 2007 | 2014 |
(1) | The mailing address for each person listed is 1645 Ellington Road, South Windsor, Connecticut 06074. Each of the persons listed as a director is also a director of Rockville Bank, Existing Rockville Financial and Rockville Financial MHC |
(2) | Ages as of September 30, 2010. |
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• | Setting the overall compensation philosophy for executive officers. | |
• | Evaluating the performance of the Chief Executive Officer and determining all elements of compensation. | |
• | Ensuring corporate goals and objectives for incentives are consistent with businessand/or strategic plans approved by the Board of Directors. | |
• | Making decisions related to base salary, short-term and long-term incentives payable to executive officers. | |
• | Reviewing the mix of total compensation to ensure all elements meet desired objectives and overall compensation philosophy. | |
• | Assessing the material risks posed by our compensation plans. | |
• | Reviewing and approving all disclosures related to executive compensation contained in the proxy statement. |
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Named Executive Officer | 2008 Base Salary | 2009 Base Salary(1) | % of Increase | |||||||||
William J. McGurk | $ | 432,772 | $ | 432,772 | — | |||||||
Joseph F. Jeamel, Jr. | $ | 238,420 | $ | 238,420 | — | |||||||
Christopher E. Buchholz | $ | 196,000 | $ | 203,840 | 4 | % | ||||||
John T. Lund(2) | n/a | $ | 150,800 | — | ||||||||
Richard J. Trachimowicz | 141,000 | 146,640 | 4 | % |
(1) | 2009 base salaries reflect increases effective October 1, 2009. | |
(2) | Mr. Lund became a Named Executive Officer in 2009. Existing Rockville Financial recently announced that Mr. Lund’s base annual salary increased by 12.6% to $180,000 effective November 8, 2010. |
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2009 Incentive | 2009 Incentive | % of Target | ||||||||||
Named Executive Officer | Target | Actual | Incentive | |||||||||
William J. McGurk | $ | 259,663 | $ | 247,600 | 95 | % | ||||||
Joseph F. Jeamel, Jr.(1) | $ | 119,210 | $ | 115,968 | 97 | % | ||||||
Christopher E. Buchholz | $ | 101,920 | $ | 99,148 | 97 | % | ||||||
John T. Lund | $ | 60,320 | $ | 58,679 | 97 | % | ||||||
Richard J. Trachimowicz | $ | 58,656 | $ | 57,061 | 97 | % |
(1) | Joseph F. Jeamel, Jr. served as Executive Vice President and Chief Operating Officer of Rockville Bank until his planned retirement, effective as of June 30, 2010. |
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AND TRANSACTIONS WITH MANAGEMENT
Change in | ||||||||||||||||||||||||||||||||||||
Pension | ||||||||||||||||||||||||||||||||||||
Value and | ||||||||||||||||||||||||||||||||||||
Nonqualified | ||||||||||||||||||||||||||||||||||||
Non-Equity | Deferred | |||||||||||||||||||||||||||||||||||
Stock | Option | Incentive Plan | Compensation | All Other | ||||||||||||||||||||||||||||||||
Name and Principal Position | Year | Salary(4) | Bonus | Awards(5) | Awards(6) | Compensation(7) | Earnings(8) | Compensation(9) | Total | |||||||||||||||||||||||||||
(a) | (b) | ( c)$ | (d)$ | (e)$ | (f)$ | (g)$ | (h)$ | (i)$ | (j)$ | |||||||||||||||||||||||||||
William J. McGurk | 2009 | 432,772 | 0 | 32,109 | 94,855 | 247,600 | 505,387 | 74,546 | 1,387,269 | |||||||||||||||||||||||||||
President and Chief | 2008 | 426,954 | 0 | 503,160 | 81,600 | 124,638 | 579,973 | 101,199 | 1,817,524 | |||||||||||||||||||||||||||
Executive Officer | 2007 | 403,471 | 0 | 0 | 122,400 | 242,676 | 0 | 77,177 | 845,724 | |||||||||||||||||||||||||||
Joseph F. Jeamel, Jr.(1) | 2009 | 238,420 | 0 | 25,410 | 41,785 | 115,968 | 129,400 | 87,071 | 638,054 | |||||||||||||||||||||||||||
Chief Operating Officer | 2008 | 234,439 | 0 | 323,460 | 32,640 | 64,373 | 192,856 | 1,589,475 | 2,437,243 | |||||||||||||||||||||||||||
2007 | 219,881 | 0 | 0 | 48,960 | 99,189 | 258,106 | 51,587 | 677,723 | ||||||||||||||||||||||||||||
Christopher E. Buchholz | 2009 | 197,809 | 0 | 23,100 | 34,313 | 99,148 | 173,984 | 39,091 | 567,445 | |||||||||||||||||||||||||||
Executive Vice President | 2008 | 192,662 | 0 | 119,800 | 27,200 | 44,100 | 50,042 | 47,678 | 481,482 | |||||||||||||||||||||||||||
2007 | 168,318 | 0 | 0 | 40,800 | 59,129 | 77,466 | 30,562 | 376,275 | ||||||||||||||||||||||||||||
John T. Lund(2) | 2009 | 146,531 | 0 | 13,860 | 19,063 | 58,679 | 0 | 18,219 | 256,352 | |||||||||||||||||||||||||||
Senior Vice President, Chief Financial Officer and Treasurer | ||||||||||||||||||||||||||||||||||||
Richard J. Trachimowicz(3) | 2009 | 142,302 | 0 | 20,790 | 18,605 | 57,061 | 66,554 | 25,600 | 330,912 | |||||||||||||||||||||||||||
Executive Vice President | 2008 | 138,531 | 8,058 | 59,900 | 17,680 | 30,456 | 75,797 | 25,613 | 356,035 |
(1) | Mr. Jeamel retired as Executive Vice President and Chief Operating Officer of Existing Rockville Financial and Rockville Bank as of June 30, 2010. |
(2) | Mr. Lund was hired on December 8, 2008 and became a Named Executive Officer in 2009. The Human Resources Committee approved a 12.6% salary increase for Mr. Lund whereby his base salary was increased to $180,000 effective November 8, 2010. |
(3) | Mr. Trachimowicz became a Named Executive Officer in 2008. He was promoted to Executive Vice President from Senior Vice President/Human Resources and Organizational Development Officer in 2010. | |
(4) | Reflects actual base salary amounts paid for fiscal year 2009. 2009 base salaries are as follows: Mr. McGurk: $432,772; Mr. Jeamel: $238,420; Mr. Buchholz: $203,840; Mr. Lund: $150,800; and Mr. Trachimowicz: $146,640. | |
(5) | These amounts represent the aggregate grant date fair value of restricted stock awards made pursuant to Rockville’s 2006 Stock Incentive Award Plan determined in accordance with FASB Topic 718. Prior years were restated in order to comply with the new reporting requirement. For the restricted stock awarded in December 2006, 20.0% vested on December 22, 2006, 20.0% vested on each December 13,2007-2009 and 20.0% will vest on December 13, 2010; for the restricted stock awarded in February 2008, 20.0% vested on February 20,2008-2010 and 20.0% vest on each February 20, 2011 and 2012; for the restricted stock awarded in March 2009, 20.0% vested on March 16, 2009 and 2010 and 20.0% vest on each March 16,2011-2013. Mr. McGurk and Mr. Jeamel reached retirement age and unvested shares will be accelerated upon retirement; therefore, the awards were fully expensed at grant. Assumptions made in valuing these awards are disclosed in footnote 14, “Share-Based Compensation” to Rockville’s Consolidated Financial Statements for the year ended December 31, 2009. |
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(6) | These amounts represent the aggregate grant date fair value of stock option awards made pursuant to Rockville’s 2006 Stock Incentive Award Plan determined in accordance with FASB Topic 718. The stock options awarded in December 2006 vested on December 13, 2008. The stock options awarded in August 2007 vested 20.0% on August 14,2007-2010 and vest 20.0% on August 14, 2011; for the stock options awarded in February 2008, 20.0% vested on February 20,2008-2010 and 20.0% vest on each February 20,2011-2012; for the stock options awarded in March 2009, 20.0% vested on each March 16, 2009 and 2010 and 20.0% vest on each March 16,2011-2013. Mr. McGurk and Mr. Jeamel reached retirement age and unvested shares will be accelerated upon retirement; therefore, the awards were fully expensed at grant. Assumptions made in valuing these awards are disclosed in footnote 14, “Share-Based Compensation” to Rockville’s Consolidated Financial Statements for the year ended December 31, 2009. | |
(7) | Reflects the annual incentives earned for fiscal year 2009 under the Rockville Bank Officer Incentive Compensation Plan (OICP). | |
(8) | Reflects the change in the present value of the life annuity from fiscal year end 2008 to 2009 for both the qualified and non-qualified defined benefit retirement plans (the Retirement Plan of Rockville Bank, SERP, Supplemental Savings and Retirement Plan, and Supplemental Executive Retirement Agreement). Change in Pension Value is as follows: |
Supplemental | Supplemental | |||||||||||||||||||
Executive | Supplemental | Executive Ret. | ||||||||||||||||||
Retirement Plan | Retirement Plan | Savings & | Agreement | |||||||||||||||||
Name | (Pension) | (SERP) | Retirement Plan | (Flat $ Benefit) | Total | |||||||||||||||
William J. McGurk | $ | 133,921 | $ | 278,428 | $ | 93,038 | $ | 505,387 | ||||||||||||
Joseph F. Jeamel, Jr. | 119,288 | 0 | (a) | — | $ | 10,112 | (b) | 129,400 | ||||||||||||
Christopher E. Buchholz | — | — | — | 173,984 | (c) | 173,984 | ||||||||||||||
John T. Lund(d) | — | — | — | — | 0 | |||||||||||||||
Richard J. Trachimowicz(e) | 66,554 | — | — | — | 66,554 |
(a) | Mr. Jeamel received a lump sum payout of this benefit during 2008. As of December 31, 2009, he is not entitled to any future payments from this plan. |
(b) | Mr. Jeamel began receiving benefits from this plan during 2008. The present value increased due to the fact that discount rates have decreased to 5.55% from 6.40%. |
(c) | Participant is vested in the benefit under this plan based on a plan change effective April 15, 2009. |
(d) | Mr. Lund is not currently eligible to participate in the listed plans, except that Existing Rockville Financial recently announced the approval of a new SERP for Mr. Lund, providing him with an annual benefit of $35,000 for twenty years. The SERP will have a five year vesting period and be payable at age 60. |
(e) | Existing Rockville Financial recently announced the approval of a new SERP for Mr. Trachimowicz, providing him with an annual benefit of $30,000 for twenty years. The SERP will have a five year vesting period and be payable at age 60. |
(9) | All Other Compensation includes 401(k) matching contributions, allocations to our employee stock ownership plan, Bank Owned Life Insurance premiums, group term life insurance premiums, dividends paid, car allowance and contributions to our Supplemental Savings and Retirement Plan. |
Employee | Bank | Supplemental | ||||||||||||||||||||||||||||||||||
Stock | Owned | Group Term | Savings and | |||||||||||||||||||||||||||||||||
Ownership | Life | Life | Dividend | Car | Retirement | |||||||||||||||||||||||||||||||
Name and Principal Position | 401(k)(1) | Plan(2) | Insurance(3) | Insurance(4) | Paid(5) | Allowance(6) | Plan | Other | Total | |||||||||||||||||||||||||||
William J. McGurk | $ | 7,350 | $ | 16,447 | $ | 105 | $ | 6,858 | $ | 9,237 | $ | 933 | $ | 33,616 | $ | 0 | $ | 74,546 | ||||||||||||||||||
Joseph F. Jeamel, Jr. | 7,350 | 16,447 | 105 | 10,555 | 6,000 | 3,923 | 9,291 | 33,400 | (7) | 87,071 | ||||||||||||||||||||||||||
Christopher E. Buchholz | 14,700 | 16,447 | 0 | 1,765 | 1,920 | 3,923 | 166 | 170 | (8) | 39,091 | ||||||||||||||||||||||||||
John T. Lund | 7,864 | 9,958 | 0 | 199 | 180 | 0 | 0 | 18 | (9) | 18,219 | ||||||||||||||||||||||||||
Richard J. Trachimowicz | 5,394 | 12,069 | 105 | 1,032 | 1,000 | 6,000 | 0 | 0 | 25,600 |
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(1) | Our matching contributions to the qualified defined contribution 401(k) retirement plan. | |
(2) | Our contributions allocated under the employee stock ownership plan. Vesting is as follows: 100.0% for Mr. McGurk, Mr. Jeamel and Mr. Trachimowicz; 60.0% for Mr. Buchholz; and 0.0% for Mr. Lund. | |
(3) | The cost of a $25,000 death benefit through Bank Owned Life Insurance. | |
(4) | Group term life insurance premiums for coverage in excess of $50,000. | |
(5) | Dividend paid for unvested restricted stock. | |
(6) | Mr. McGurk’s car allowance reflects his personal use of a company car. Mr. Jeamel’s and Mr. Buchholz’s car allowances became effective in September, 2007. Mr. Trachimowicz’s car allowance became effective in November 2008. | |
(7) | Includes a life insurance premiumgross-up reimbursement ($5,764), a payout from Mr. Jeamel’s SERP ($27,636). | |
(8) | Flex credit to offset the cost of health/dental insurance. | |
(9) | Volunteer pay. |
All Other | All Other | |||||||||||||||||||||||||||||||
Stock | Stock | Grant | ||||||||||||||||||||||||||||||
Awards: | Awards: | Exercise | Date Fair | |||||||||||||||||||||||||||||
Estimated Possible Payouts | Number of | Number of | or Base | Value of | ||||||||||||||||||||||||||||
Under Non-Equity | Shares of | Securities | Price of | Stock and | ||||||||||||||||||||||||||||
Incentive Plan Awards(2) | Stock or | Under-lying | Option | Option | ||||||||||||||||||||||||||||
Name | Grant Date(1) | Threshold | Target | Maximum | Units | Options | Awards(3) | Awards(4) | ||||||||||||||||||||||||
($) | ($) | ($) | (# ) | (#) | ($/Sh) | ($/Sh) | ||||||||||||||||||||||||||
William J. McGurk | 3/16/09 | 129,832 | 259,663 | 324,579 | 3,475 | 31,100 | 9.24 | 126,964 | ||||||||||||||||||||||||
Joseph F. Jeamel, Jr. | 3/16/09 | 59,605 | 119,210 | 149,013 | 2,750 | 13,700 | 9.24 | 67,195 | ||||||||||||||||||||||||
Christopher E. Buchholz | 3/16/09 | 50,960 | 101,920 | 127,400 | 2,500 | 11,250 | 9.24 | 57,413 | ||||||||||||||||||||||||
John T. Lund | 3/16/09 | 30,160 | 60,320 | 75,400 | 1,500 | 6,250 | 9.24 | 32,923 | ||||||||||||||||||||||||
Richard J. Trachimowicz | 3/16/09 | 29,328 | 58,656 | 73,320 | 2,250 | 6,100 | 9.24 | 39,395 |
(1) | This column shows the date of the grant for all awards granted in 2009. | |
(2) | For Mr. McGurk, the Annual Incentive Compensation Plan target represents 60.0% of base salary. All other executives Annual Incentive Compensation Plan target as a percentage of base salary is as follows: Mr. Jeamel — 50.0%, Mr. Buchholz — 50.0%, Mr. Lund — 40.0% and Mr. Trachimowicz — 40.0%. Incentive opportunity ranges from 50.0% to 125.0% of the target. | |
(3) | Exercise price represents the closing price on the grant date. | |
(4) | For stock option awards, it reflects the grant date FASB Topic 718 fair value for awards disclosed in the column (j) the Black-Scholes value is $3.05 per share. Assumptions made in valuing these awards are disclosed in footnote 14, “Share-Based Compensation” to Rockville’s Consolidated Financial Statements for the year ended December 31, 2009 as contained in Rockville’s Annual Report onForm 10-K, incorporated herein by reference. |
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Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Equity | ||||||||||||||||||||||||||||||||||||
Incentive | ||||||||||||||||||||||||||||||||||||
Equity | Plan | |||||||||||||||||||||||||||||||||||
Incentive | Awards: | |||||||||||||||||||||||||||||||||||
Plan | Market or | |||||||||||||||||||||||||||||||||||
Awards: | Payout | |||||||||||||||||||||||||||||||||||
Equity | Number of | Value of | ||||||||||||||||||||||||||||||||||
Number of | Number of | Incentive | Market | Unearned | Unearned | |||||||||||||||||||||||||||||||
Securities | Securities | Plan Awards | Number of | Value of | Shares, | Shares, | ||||||||||||||||||||||||||||||
Underlying | Underlying | Number of | Shares or | Shares or | Units or | Units or | ||||||||||||||||||||||||||||||
Unexercised | Unexercised | Securities | Units of | Units of | Other | Other | ||||||||||||||||||||||||||||||
Options | Options(1) | Underlying | Option | Option | Stock That | Stock That | Rights | Rights That | ||||||||||||||||||||||||||||
Exercisable | Unexercisable | Unearned | Exercise | Expiration | Have Not | Have Not | That Have | Have Not | ||||||||||||||||||||||||||||
Name | Options | Options | Options | Price | Date | Vested(2) | Vested(3) | Not Vested | Vested | |||||||||||||||||||||||||||
(#) | (#) | (#) | ($) | (#) | ($) | (#) | ($) | |||||||||||||||||||||||||||||
William J. McGurk | 6,220 | 24,880 | 9.24 | 3/16/2019 | 2,780 | 29,190 | — | — | ||||||||||||||||||||||||||||
12,000 | 18,000 | 11.98 | 2/20/2018 | 25,200 | 264,600 | — | — | |||||||||||||||||||||||||||||
18,000 | 12,000 | 14.35 | 8/14/2017 | 0 | 0 | — | — | |||||||||||||||||||||||||||||
30,000 | 0 | 17.77 | 12/13/2016 | 8,400 | 88,200 | — | — | |||||||||||||||||||||||||||||
Joseph F. Jeamel, Jr. | 2,740 | 10,960 | 9.24 | 3/16/2019 | 2,200 | 23,100 | — | — | ||||||||||||||||||||||||||||
4,800 | 7,200 | 11.98 | 2/20/2018 | 16,200 | 170,100 | — | — | |||||||||||||||||||||||||||||
7,200 | 4,800 | 14.35 | 8/14/2017 | 0 | 0 | — | — | |||||||||||||||||||||||||||||
12,000 | 0 | 17.77 | 12/13/2016 | 5,400 | 56,700 | — | — | |||||||||||||||||||||||||||||
Christopher E. Buchholz | 2,250 | 9,000 | 9.24 | 3/16/2019 | 2,000 | 21,000 | — | — | ||||||||||||||||||||||||||||
4,000 | 6,000 | 11.98 | 2/20/2018 | 6,000 | 63,000 | — | — | |||||||||||||||||||||||||||||
6,000 | 4,000 | 14.35 | 8/14/2017 | 0 | 0 | — | — | |||||||||||||||||||||||||||||
6,500 | 0 | 17.77 | 12/13/2016 | 800 | 8,400 | — | — | |||||||||||||||||||||||||||||
John T. Lund | 1,250 | 5,000 | 9.24 | 3/16/2019 | 1,200 | 12,600 | — | — | ||||||||||||||||||||||||||||
Richard J. Trachimowicz | 1,220 | 4,880 | 9.24 | 3/16/2019 | 1,800 | 18,900 | — | — | ||||||||||||||||||||||||||||
2,600 | 3,900 | 11.98 | 2/20/2018 | 3,000 | 31,500 | — | — | |||||||||||||||||||||||||||||
3,900 | 2,600 | 14.35 | 8/14/2017 | 0 | 0 | — | — | |||||||||||||||||||||||||||||
2,000 | 0 | 17.77 | 12/13/2016 | 200 | 2,100 | — | — |
(1) | The options granted at $17.77 vested on December 13, 2008, the options granted at $14.35 vested on each August 14,2007-2010 and will vest on August 14, 2011, the options granted at $11.98 vested on each February 20,2008-2010 and will vest on each February 20, 2011 and 2012 and the options granted at $9.24 vested on each March 16, 2009 and 2010 and will vest on each March 16,2011-2013. | |
(2) | Vesting dates for the stock awards are as follows: for the restricted stock awarded in December 2006, 20.0% vested on December 22, 2006, and 20.0% on each December 13,2007-2009 and 20% will vest on December 13, 2010; for the restricted stock awarded in February 2008, 20.0% vested on February 20,2008-2010 and 20.0% on each February 20, 2011 and 2012; for the restricted stock awarded in March 2009, 20.0% vested on each March 16,2009-2010 and 20.0% on each March 16,2011-2013. Vesting is accelerated upon retirement. Mr. McGurk and Mr. Jeamel reached retirement age; therefore, unvested shares will vest on an accelerated basis upon retirement. | |
(3) | Market values are based on the closing market price of Existing Rockville Financial stock of $10.50 on December 31, 2009. |
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Option Awards | Stock Awards | |||||||||||||||
Number of | Number of | |||||||||||||||
Shares | Value | Shares | Value | |||||||||||||
Acquired on | Realized Upon | Acquired on | Realized on | |||||||||||||
Name | Exercise | Exercise ($) | Vesting | Vesting ($)(2) | ||||||||||||
William J. McGurk(1) | 0 | 0 | 17,495 | 169,550 | ||||||||||||
Joseph F. Jeamel, Jr. (1) | 0 | 0 | 11,350 | 109,950 | ||||||||||||
Christopher E. Buchholz | 0 | 0 | 3,300 | 31,112 | ||||||||||||
John T. Lund | 0 | 0 | 300 | 2,772 | ||||||||||||
Richard J. Trachimowicz | 0 | 0 | 1,650 | 15,346 |
(1) | Vesting is accelerated upon retirement. Mr. McGurk and Mr. Jeamel reached retirement age; therefore, unvested shares will vest on an accelerated basis upon retirement. | |
(2) | Value reflects the vested shares at the vesting price on February 20, 2009 of $9.13, March 16, 2009 of $9.24 and December 14, 2009 of $10.29. |
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Number of | Present | Payments | ||||||||||
Years | Value of | During | ||||||||||
Credited | Accumulated | Last Fiscal | ||||||||||
Name | Service | Benefit ($) | Year ($) | |||||||||
William J. McGurk | ||||||||||||
Retirement Plan of Rockville Bank | 29.00 | 1,784,290 | 0 | |||||||||
Supplemental Executive Retirement Plan of Rockville Bank (70.0% SERP) | 29.83 | 2,944,961 | 0 | |||||||||
Supplemental Savings & Retirement Plan of Rockville Bank (Article V — Supplemental Pension Benefit) | 29.00 | 917,493 | 0 | |||||||||
Joseph F. Jeamel, Jr. | ||||||||||||
Retirement Plan of Rockville Bank | 19.00 | 1,253,514 | 0 | |||||||||
Supplemental Executive Retirement Agreement (Flat $ Benefit) | 18.18 | (1) | 321,442 | (2) | 27,636 | |||||||
Christopher E. Buchholz(3) | ||||||||||||
Supplemental Executive Retirement Agreement (Flat $ Benefit) | 3.58 | 301,492 | 0 | |||||||||
John T. Lund(4) | ||||||||||||
Retirement Plan of Rockville Bank | 0 | 0 | 0 | |||||||||
Richard J. Trachimowicz | ||||||||||||
Retirement Plan of Rockville Bank | 14.00 | 381,758 | 0 |
(1) | The Plan began paying out benefits to its incumbent; therefore, it does not credit years of service any more. The years of service shown are from Mr. Jeamel’s hiring date to December 31, 2009. | |
(2) | Mr. Jeamel began receiving benefits from the Supplemental Executive Retirement Agreement during 2008. | |
(3) | Mr. Buchholz is vested in the benefit under this plan based on a plan change effective April 15, 2009. | |
(4) | Mr. Lund is not eligible for a benefit under this plan. |
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�� | ||||||||||||||||||||
Aggregate | ||||||||||||||||||||
Executive | Registrant | Aggregate | Aggregate | Balance at | ||||||||||||||||
Contributions in | Contributions in | Earnings in | Withdrawals/ | December 31, | ||||||||||||||||
Name | 2009($) | 2009 ($)(1) | 2009 ($)(2) | Distributions ($) | 2009 ($) | |||||||||||||||
William J. McGurk | 43,277 | 33,616 | 84,357 | 0 | 373,647 | |||||||||||||||
Joseph F. Jeamel, Jr. | 0 | 9,291 | 962 | 0 | 49,352 | |||||||||||||||
Christopher E. Buchholz | 0 | 166 | 1,029 | 0 | 3,960 | |||||||||||||||
John T. Lund | 0 | 0 | 0 | 0 | 0 | |||||||||||||||
Richard J. Trachimowicz | 0 | 0 | 0 | 0 | 0 |
(1) | 2009 deferred compensation match on current year deferrals. | |
(2) | 2009 deferred compensation interest accrued on all deferrals. |
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• | Three times the sum of the Executive Officer’s Base Salary immediately prior to termination plus an amount equal to the greater of the portion of the Executive’s annual target incentive compensation potentially payable in cash to the Executive for the year of termination or the portion of the Executive’s annual incentive compensation that became payable in cash to the Executive for the latest year preceding the year of termination. | |
• | A lump sum payment equal to the pro-rata portion of the Executive’s annual target incentive compensation potentially payable in cash to the Executive for the year of termination. | |
• | The continuation of benefits, which includes health care, group term life insurance and long-term disability benefits. | |
• | Mr. McGurk is eligible for post-retirement health care and post retirement life insurance. |
• | Three times the sum of the Executive Officer’s Base Salary immediately prior to termination plus an amount equal to the greater of the portion of the Executive’s annual target incentive compensation potentially payable in cash to the Executive for the year of termination or the portion of the Executive’s annual incentive compensation that became payable in cash to the Executive for the latest year preceding the year of termination. | |
• | A lump sum payment equal to the pro-rata portion of the Executive’s annual target incentive compensation potentially payable in cash to the Executive for the year of termination. | |
• | The continuation of benefits, which includes health care, group term life insurance and long-term disability benefits. |
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• | A lump-sum taxgross-up payment if the executive becomes subject to the 20.0% excise tax on “parachute payments.” | |
• | Mr. McGurk is eligible for post-retirement health care and post-retirement life insurance. |
• | Mr. McGurk’s survivors are eligible for post-retirement health care. |
Involuntary | ||||||||||||||||||||||||||||
or Good | ||||||||||||||||||||||||||||
Reason | ||||||||||||||||||||||||||||
Involuntary | Termination | |||||||||||||||||||||||||||
Not for | within | |||||||||||||||||||||||||||
Voluntary | Normal | Cause | For Cause | 2 Years of | ||||||||||||||||||||||||
Executive Benefits and | Termination | Retirement | Termination | Termination | a CIC | Death | Disability | |||||||||||||||||||||
Payments Upon Termination (a) | $(b) | $(c) | $(d) | $(e) | $(f) | $(g) | $(h) | |||||||||||||||||||||
Compensation: | ||||||||||||||||||||||||||||
Base Salary | 0 | 0 | 2,077,305 | 0 | 2,077,305 | 0 | 0 | |||||||||||||||||||||
Short-Term Incentive | 259,663 | 259,663 | 259,663 | 0 | 259,663 | 259,663 | 259,663 | |||||||||||||||||||||
Stock Option Unvested and Accelerated(1) | 31,349 | 31,349 | 31,349 | 0 | 31,349 | 31,349 | 31,349 | |||||||||||||||||||||
Restricted Stock Unvested and Accelerated | 381,990 | 381,990 | 381,990 | 0 | 381,990 | 381,990 | 381,990 | |||||||||||||||||||||
Benefits and Perquisites: | ||||||||||||||||||||||||||||
Health and Welfare Benefit Continuation(2) | 218,706 | 218,706 | 260,701 | 218,706 | 260,701 | 148,607 | 250,555 | |||||||||||||||||||||
280G Tax & Gross Up | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||
Total: | 891,708 | 891,708 | 3,011,008 | 218,706 | 3,011,008 | 821,609 | 923,557 | |||||||||||||||||||||
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(1) | The stock options granted on December 13, 2006, August 14, 2007 and February 20, 2008 were underwater as of December 31, 2009. | |
(2) | Includes post retirement health care, post retirement life insurance, health care continuation for eligible non-spouse dependent only, group term life benefits and long-term disability benefits. |
Involuntary | ||||||||||||||||||||||||||||
or Good | ||||||||||||||||||||||||||||
Reason | ||||||||||||||||||||||||||||
Involuntary | Termination | |||||||||||||||||||||||||||
Not for | within | |||||||||||||||||||||||||||
Voluntary | Normal | Cause | For Cause | 2 Years of | ||||||||||||||||||||||||
Executive Benefits and | Termination | Retirement | Termination | Termination | a CIC | Death | Disability | |||||||||||||||||||||
Payments Upon Termination (a) | $(b) | $(c) | $(d) | $(e) | $(f) | $(g) | $(h) | |||||||||||||||||||||
Compensation: | ||||||||||||||||||||||||||||
Base Salary | 0 | 0 | 917,280 | 0 | 917,280 | 0 | 0 | |||||||||||||||||||||
Short-Term Incentive | 0 | 0 | 101,920 | 0 | 101,920 | 0 | 0 | |||||||||||||||||||||
Stock Option Unvested and Accelerated(1) | 0 | 0 | 0 | 0 | 11,340 | 11,340 | 11,340 | |||||||||||||||||||||
Restricted Stock Unvested and Accelerated | 0 | 0 | 0 | 0 | 92,400 | 92,400 | 92,400 | |||||||||||||||||||||
Benefits and Perquisites: | ||||||||||||||||||||||||||||
Health and Welfare Benefit Continuation(2) | 0 | 0 | 7,951 | 0 | 7,951 | 0 | 22,528 | |||||||||||||||||||||
Supplemental Executive Retirement Agreement Acceleration(3) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||
280G Tax & Gross Up | 0 | 0 | 0 | 0 | 385,317 | 0 | 0 | |||||||||||||||||||||
Total: | 0 | 0 | 1,027,151 | 0 | 1,516,208 | 103,740 | 126,268 | |||||||||||||||||||||
(1) | The stock options granted on December 13, 2006, August 14, 2007 and February 20, 2008 were underwater as of December 31, 2009. | |
(2) | Includes health care continuation, group term life benefits and long-term disability benefits. The value represents three years continuation of benefits grossed up for tax. For disability, benefit is assumed to continue until the participant is eligible for Medicare. | |
(3) | Mr. Buchholz is vested in the benefit under the Supplemental Executive Retirement Agreement (Flat $ Benefit) on a plan change effective April 15, 2009. Therefore, there is no additional benefit upon change in control under this plan any longer. |
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Involuntary | ||||||||||||||||||||||||||||
or Good | ||||||||||||||||||||||||||||
Reason | ||||||||||||||||||||||||||||
Involuntary | Termination | |||||||||||||||||||||||||||
Not for | within | |||||||||||||||||||||||||||
Voluntary | Normal | Cause | For Cause | 2 Years of | ||||||||||||||||||||||||
Executive Benefits and | Termination | Retirement | Termination | Termination | a CIC | Death | Disability | |||||||||||||||||||||
Payments Upon Termination (a) | $(b) | $(c) | $(d) | $(e) | $(f) | $(g) | $(h) | |||||||||||||||||||||
Compensation: | ||||||||||||||||||||||||||||
Base Salary | 0 | 0 | 633,360 | 0 | 633,360 | 0 | 0 | |||||||||||||||||||||
Short-Term Incentive | 0 | 0 | 60,320 | 0 | 60,320 | 0 | 0 | |||||||||||||||||||||
Stock Option Unvested and Accelerated(1) | 0 | 0 | 0 | 0 | 6,300 | 6,300 | 6,300 | |||||||||||||||||||||
Restricted Stock Unvested and Accelerated | 0 | 0 | 0 | 0 | 12,600 | 12,600 | 12,600 | |||||||||||||||||||||
Benefits and Perquisites: | ||||||||||||||||||||||||||||
Health and Welfare Benefit Continuation(2) | 0 | 0 | 102,933 | 0 | 102,933 | 97,175 | 851,353 | |||||||||||||||||||||
280G Tax & Gross Up | 0 | 0 | 0 | 0 | 325,821 | 0 | 0 | |||||||||||||||||||||
Total: | 0 | 0 | 796,613 | 0 | 1,141,334 | 116,075 | 870,253 | |||||||||||||||||||||
(1) | The stock options granted on December 13, 2006, August 14, 2007 and February 20, 2008 were underwater as of December 31, 2009. | |
(2) | Includes health care continuation, group term life benefits and long-term disability benefits. The value represents three years continuation of benefits grossed up for tax. For disability, benefit is assumed to continue until the participant is eligible for Medicare. |
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Involuntary | ||||||||||||||||||||||||||||
or Good | ||||||||||||||||||||||||||||
Reason | ||||||||||||||||||||||||||||
Involuntary | Termination | |||||||||||||||||||||||||||
Not for | within | |||||||||||||||||||||||||||
Voluntary | Normal | Cause | For Cause | 2 Years of | ||||||||||||||||||||||||
Executive Benefits and | Termination | Retirement | Termination | Termination | a CIC | Death | Disability | |||||||||||||||||||||
Payments Upon Termination (a) | $(b) | $(c) | $(d) | $(e) | $(f) | $(g) | $(h) | |||||||||||||||||||||
Compensation: | ||||||||||||||||||||||||||||
Base Salary | 0 | 0 | 615,888 | 0 | 615,888 | 0 | 0 | |||||||||||||||||||||
Short-Term Incentive | 0 | 0 | 58,656 | 0 | 58,656 | 0 | 0 | |||||||||||||||||||||
Stock Option Unvested and Accelerated(1) | 0 | 0 | 0 | 0 | 6,149 | 6,149 | 6,149 | |||||||||||||||||||||
Restricted Stock Unvested and Accelerated | 0 | 0 | 0 | 0 | 52,500 | 52,500 | 52,500 | |||||||||||||||||||||
Benefits and Perquisites: | ||||||||||||||||||||||||||||
Health and Welfare Benefit Continuation(2) | 0 | 0 | 76,087 | 0 | 76,087 | 31,854 | 254,960 | |||||||||||||||||||||
280G Tax & Gross Up | 0 | 0 | 0 | 0 | 258,950 | 0 | 0 | |||||||||||||||||||||
Total: | 0 | 0 | 750,631 | 0 | 1,068,230 | 90,503 | 313,609 | |||||||||||||||||||||
(1) | The stock options granted on December 13, 2006, August 14, 2007 and February 20, 2008 were underwater as of December 31, 2009. | |
(2) | Includes health care continuation, group term life benefits and long-term disability benefits. The value represents three years continuation of benefits grossed up for tax. For voluntary termination or disability, benefit is assumed to continue until the participant is eligible for Medicare and for his spouse until the expiration of her COBRA continuation period. |
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Change in | ||||||||||||||||||||||||||||
Pension | ||||||||||||||||||||||||||||
Value and | ||||||||||||||||||||||||||||
Fees | Nonqualified | |||||||||||||||||||||||||||
Earned or | Non-Equity | Deferred | ||||||||||||||||||||||||||
Paid in | Stock | Incentive Plan | Compensation | All Other | ||||||||||||||||||||||||
Cash(1) | Awards(2) | Option | Compensation | Earnings | Compensation(4) | Total | ||||||||||||||||||||||
Name | ($) | ($) | Awards(3) | ($) | ($) | ($) | ($) | |||||||||||||||||||||
Michael A. Bars | 55,725 | 0 | 10,675 | 0 | 0 | 800 | 67,200 | |||||||||||||||||||||
C. Perry Chilberg | 32,800 | 0 | 10,675 | 0 | 0 | 800 | 44,275 | |||||||||||||||||||||
David A. Engelson | 42,975 | 0 | 10,675 | 0 | 0 | 998 | 54,648 | |||||||||||||||||||||
Pamela J.Guenard | 26,675 | 0 | 10,675 | 0 | 0 | 0 | 37,350 | |||||||||||||||||||||
Raymond H. Lefurge, Jr. | 60,650 | 0 | 10,675 | 0 | 0 | 800 | 72,125 | |||||||||||||||||||||
Stuart E. Magdefrau | 37,525 | 0 | 10,675 | 0 | 0 | 800 | 49,000 | |||||||||||||||||||||
Thomas S. Mason | 40,800 | 0 | 10,675 | 0 | 0 | 998 | 52,473 | |||||||||||||||||||||
Rosemarie Novello Papa | 26,900 | 0 | 10,675 | 0 | 0 | 0 | 37,575 | |||||||||||||||||||||
Peter F. Olson | 40,075 | 0 | 10,675 | 0 | 0 | 800 | 51,550 | |||||||||||||||||||||
Richard M.Tkacz | 32,000 | 0 | 10,675 | 0 | 0 | 0 | 42,675 |
(1) | Mr. Mason elected to defer 50.0% of his annual fees, $20,400. | |
(2) | These amounts represent the aggregate grant date fair value of restricted stock awards in accordance with FASB Topic 718. Assumptions made in valuing these awards are disclosed in footnote 14, “Share-Based Compensation” to Rockville’s Consolidated Financial Statements for the year ended December 31, 2009. As of December 31, 2009, directors have the following unvested shares; Bars — 2,000 shares; Chilberg — 2,000 shares; Engelson — 2,495 shares; Lefurge — 2,000 shares; Magdefrau — 2,000 shares; Mason — 2,495 shares; and Olson — 2,000 shares. | |
(3) | These amounts represent the aggregate grant date fair value of restricted stock awards in accordance with FASB Topic 718. Assumptions made in valuing these awards are disclosed in footnote 14, “Share-Based Compensation” to Rockville’s Consolidated Financial Statements for the year ended December 31, 2009. As of December 31, 2009, directors have the following unvested shares; Bars — 4,900 shares; Chilberg — 4,900 shares; Engelson — 4,900 shares; Guenard — 4,900 shares; Lefurge — 4,900 shares; Magdefrau — 4,900 shares; Mason — 4,900 shares; Papa — 4,900 shares; Olson — 4,900 shares; and Tkacz — 4,900 shares. | |
(4) | Reflects dividends paid for unvested restricted stock owned by each director in 2009. |
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Largest | ||||||||||||||||||||||||
Aggregate | ||||||||||||||||||||||||
Principal | Principal | |||||||||||||||||||||||
Original Loan | Original Note | Outstanding | Balance | Interest Paid | ||||||||||||||||||||
Name | Date | Loan Type | Rate | Current Rate | During 2009 | as of 12/31/09 | During 2009 | |||||||||||||||||
Michael A. Bars* | 3/3/2006 | Fixed Residential | 6.375 | % | 4.75% Rate Modified | $ | 242,812.00 | $ | 229,952.96 | $ | 11,605.80 | |||||||||||||
Judy Keppner Clark | 7/21/2008 | Fixed Residential | 5.125 | % | 4.625% Rate Modified | $ | 83,793.03 | $ | 78,454.96 | $ | 3,761.93 | |||||||||||||
David A. Engelson* | 10/22/2004 | Fixed Residential | 5.375 | % | 4.500% Rate Modified | $ | 74,475.18 | $ | 53,395.33 | $ | 2,920.15 | |||||||||||||
Pamela J. Guenard | 8/13/2003 | Fixed Residential | 5.375 | % | 5.375% No employee rate reduction requested. | $ | 92,379.10 | $ | 90,671.41 | $ | 4,928.15 | |||||||||||||
John T. Lund | 6/10/2009 | Fixed Residential | 4.875 | % | 4.375% Rate Modified | $ | 290,000.00 | $ | 286,391.89 | $ | 6,674.83 | |||||||||||||
William J. McGurk | 5/5/2003 | ARM Loan-.50% off Rate Margin | 4.250 | % | 2.875% Rate Modified | $ | 47,579.51 | $ | 37,402.98 | $ | 1,426.67 | |||||||||||||
Peter F. Olson | 6/21/2004 | Fixed Residential | 5.000 | % | 4.500% Rate Modified | $ | 96,475.52 | $ | 89,193.05 | $ | 4,192.41 | |||||||||||||
Rosemarie N. Papa | 6/29/2009 | Fixed Residential | 4.750 | % | 4.750% No employee rate reduction requested | $ | 300,000.00 | $ | 294,224.46 | $ | 5,970.04 | |||||||||||||
Richard M. Tkacz | 7/21/2007 | Fixed Rate Home Equity | 6.500 | % | 6.500% No employee rate reduction requested. | $ | 122,391.70 | $ | 116,589.47 | $ | 7,787.05 | |||||||||||||
Richard J. Trachimowicz | 9/29/2008 | ARM Loan-.50% off Rate Margin | 5.375 | % | 4.875% Rate Modified | $ | 296,268.14 | $ | 291,750.14 | $ | 14,343.00 |
* | Rate modified for $500 fee when we offered a modification program. This has since been discontinued. |
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Number of Shares | ||||||||
Beneficially | Percent of | |||||||
Name and Address of Beneficial Owner | Owned(1) | Class(2) | ||||||
Rockville Financial MHC | 10,689,250 | (3) | 56.69 | % | ||||
25 Park Street Rockville, Connecticut 06066 | ||||||||
Independent Directors: | ||||||||
Michael A. Bars | 31,500 | (4) | * | |||||
C. Perry Chilberg | 48,800 | (5) | * | |||||
David A. Engelson | 49,779 | (6) | * | |||||
Pamela J. Guenard | 4,200 | (7) | * | |||||
Kristen A. Johnson | 16,734 | (8) | * | |||||
Raymond H. Lefurge, Jr. | 46,300 | (9) | * | |||||
Stuart E. Magdefrau | 36,500 | (10) | * | |||||
Thomas S. Mason | 29,779 | (11) | * | |||||
Rosemarie Novello Papa | 3,708 | (12) | * | |||||
Peter F. Olson | 56,000 | (13) | * | |||||
Richard M. Tkacz | 6,593 | (14) | * | |||||
Named Executive Officers: | ||||||||
William J. McGurk | 197,755 | (15)(20) | 1.05 | |||||
Joseph F. Jeamel, Jr.(21) | 129,466 | (16)(20) | * | |||||
Christopher E. Buchholz | 38,633 | (17)(20) | * | |||||
John T. Lund | 3,188 | (18)(20) | * | |||||
Richard J. Trachimowicz | 39,583 | (19)(20) | * | |||||
All Directors and Executive Officers as a Group (20 persons) | 839,328 | 4.45 | % |
* | Less than 1.0% of the common stock issued and outstanding. | |
(1) | Based on information provided by the respective beneficial owners and on filings with the Securities and Exchange Commission made pursuant to the Securities Exchange Act of 1934. |
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(2) | Based on 18,853,112 shares of common stock issued and outstanding as of September 30, 2010. |
(3) | Based solely on information provided in a Schedule 13D filed with the Securities and Exchange Commission by Rockville Financial MHC. All shares are held with sole voting and dispositive power. | |
(4) | Includes 8,000 shares of restricted common stock and 8,500 exercisable options to purchase common stock. | |
(5) | Includes 13,605 shares held by his wife, 5,090 shares held by adult children, 8,000 shares of restricted common stock and 8,500 exercisable options to purchase common stock. | |
(6) | Includes 5,000 shares held by his wife, 10,000 shares held jointly with his wife, 9,979 shares of restricted common stock and 9,800 exercisable options to purchase common stock. | |
(7) | Includes 200 shares held jointly with her husband and 3,500 exercisable options to purchase common stock. | |
(8) | Includes 3,377 shares allocated to the account of Ms. Johnson under the Rockville Bank employee stock ownership plan, all of which are vested shares. | |
(9) | Includes 13,000 shares held jointly with his wife, 7,000 shares held by his wife, 7,800 shares of restricted common stock and 8,500 exercisable options to purchase common stock. | |
(10) | Includes 9,000 shares held jointly with his wife, 7,000 shares of restricted common stock and 8,500 exercisable options to purchase common stock. | |
(11) | Includes 5,000 shares held in the Thomas S. Mason Trust, of which Mr. Mason is the trustee, and 5,000 shares held in the Susan C. Mason Trust, of which Mrs. Mason is the trustee. Also includes 9,979 shares of restricted common stock and 9,800 exercisable options to purchase common stock. | |
(12) | Includes 3,500 exercisable options to purchase common stock. | |
(13) | Includes 20,000 shares held by his wife, 7,500 shares of restricted common stock and 8,500 exercisable options to purchase common stock. | |
(14) | Includes 800 shares held by his wife and 3,500 exercisable options to purchase common stock. |
(15) | Includes 15,000 shares held jointly with his wife, 51,095 shares of restricted common stock and 84,440 exercisable options to purchase common stock. |
(16) | Includes 42,850 shares of restricted common stock and 49,700 exercisable options to purchase common stock. |
(17) | Includes 6,663 shares of restricted common stock and 25,000 exercisable options to purchase common stock. |
(18) | Includes 200 shares held jointly with his wife, 374 shares of restricted common stock and 2,500 exercisable options to purchase common stock. |
(19) | Includes 3,100 shares held jointly with his wife, 3,025 shares of restricted common stock and 13,540 exercisable options to purchase common stock. |
(20) | Includes shares allocated to the accounts of the individuals under the Rockville Bank employee stock ownership plan. The respective individuals have vested shares as follows: Mr. McGurk — 8,501 shares; Mr. Jeamel — 8,453 shares; Mr. Buchholz — 2,652 shares; Mr. Lund — 0 shares and Mr. Trachimowicz — 6,142 shares. |
(21) | Joseph F. Jeamel, Jr. served as Chief Operating Officer of Rockville Bank until his planned retirement, effective as of June 30, 2010. |
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Number of Exchange Shares to be Held(1) | Proposed Purchases of | Total Common Stock to be Held | % of Common Stock to be Held | |||||||||||||||||||||||||||||||||||||||||
Shares at | Shares at | Shares at | Common Stock in the | Shares at | Shares at | Shares at | % at | % at | % at | |||||||||||||||||||||||||||||||||||
Minimum | Midpoint | Maximum | Offering(2) | Minimum | Midpoint | Maximum | Minimum of | Midpoint of | Maximum of | |||||||||||||||||||||||||||||||||||
of Offering | of Offering | of Offering | Number | of Offering | of Offering | of Offering | Offering | Offering | Offering | |||||||||||||||||||||||||||||||||||
Name of Beneficial Owner | Range(3) | Range(4) | Range(5) | of Shares | Amount | Range(6) | Range(7) | Range(8) | Range(6) | Range(7) | Range(8) | |||||||||||||||||||||||||||||||||
Independent Directors: | ||||||||||||||||||||||||||||||||||||||||||||
Michael A. Bars | 30,532 | 35,922 | 41,309 | 5,000 | $ | 50,000 | 35,532 | 40,922 | 46,309 | * | * | * | ||||||||||||||||||||||||||||||||
C. Perry Chilberg | 47,301 | 55,651 | 63,996 | 1,000 | 10,000 | 48,301 | 56,651 | 64,996 | * | * | * | |||||||||||||||||||||||||||||||||
David A. Engelson | 48,250 | 56,767 | 65,280 | 2,000 | 20,000 | 50,250 | 58,767 | 67,280 | * | * | * | |||||||||||||||||||||||||||||||||
Pamela J. Guenard | 4,071 | 4,789 | 5,507 | 1,500 | 15,000 | 5,571 | 6,289 | 7,007 | * | * | * | |||||||||||||||||||||||||||||||||
Kristen A. Johnson | 16,220 | 19,083 | 21,944 | 10,000 | 100,000 | 26,220 | 29,083 | 31,944 | * | * | * | |||||||||||||||||||||||||||||||||
Raymond H. Lefurge, Jr. | 44,878 | 52,800 | 60,717 | 2,500 | 25,000 | 47,378 | 55,300 | 63,217 | * | * | * | |||||||||||||||||||||||||||||||||
Stuart E. Magdefrau | 35,379 | 41,624 | 47,866 | 5,000 | 50,000 | 40,379 | 46,624 | 52,866 | * | * | * | |||||||||||||||||||||||||||||||||
Thomas S. Mason | 28,864 | 33,959 | 39,052 | 1,000 | 10,000 | 29,864 | 34,959 | 40,052 | * | * | * | |||||||||||||||||||||||||||||||||
Rosemarie Novello Papa | 3,594 | 4,228 | 4,862 | 10,000 | 100,000 | 13,594 | 14,228 | 14,862 | * | * | * | |||||||||||||||||||||||||||||||||
Peter F. Olson | 54,280 | 63,862 | 73,438 | 1,000 | 10,000 | 55,280 | 64,862 | 74,438 | * | * | * | |||||||||||||||||||||||||||||||||
Richard M. Tkacz | 6,390 | 7,518 | 8,646 | 2,000 | 20,000 | 8,390 | 9,518 | 10,646 | * | * | * | |||||||||||||||||||||||||||||||||
Named Executive Officers: | ||||||||||||||||||||||||||||||||||||||||||||
William J. McGurk | 191,683 | 225,519 | 259,335 | 6,000 | $ | 60,000 | 197,683 | 231,519 | 265,335 | 1.04 | % | 1.04 | % | 1.03 | % | |||||||||||||||||||||||||||||
Joseph F. Jeamel, Jr.(9) | 125,491 | 147,643 | 169,781 | 5,000 | 50,000 | 130,491 | 152,643 | 174,781 | * | * | * | |||||||||||||||||||||||||||||||||
Christopher E. Buchholz | 37,446 | 44,057 | 50,663 | 3,000 | 30,000 | 40,446 | 47,057 | 53,663 | * | * | * | |||||||||||||||||||||||||||||||||
John T. Lund | 3,090 | 3,635 | 4,180 | 1,000 | 10,000 | 4,090 | 4,635 | 5,180 | * | * | * | |||||||||||||||||||||||||||||||||
Richard J. Trachimowicz | 38,367 | 45,140 | 51,909 | 1,000 | 10,000 | 39,367 | 46,140 | 52,909 | * | * | * | |||||||||||||||||||||||||||||||||
All Directors and Executive Officers as a Group (20 Persons) | 813,560 | 957,169 | 1,100,694 | 63,000 | $ | 630,000 | 876,560 | 1,020,169 | 1,163,694 | 4.62 | % | 4.57 | % | 4.53 | % |
* | Less than 1.0% of the common stock issued and outstanding. | |
(1) | Based on information presented in “BENEFICIAL OWNERSHIP OF COMMON STOCK BY MANAGEMENT AND CERTAIN BENEFICIAL OWNERS”. The valuation and ownership ratios reflect the dilutive impact of Rockville Financial MHC’s assets upon completion of the conversion and offering. | |
(2) | Includes proposed subscriptions, if any, by associates. |
(3) | Assumes an exchange ratio of 0.9693 at the minimum of the offering range. |
(4) | Assumes an exchange ratio of 1.1404 at the midpoint of the offering range. |
(5) | Assumes an exchange ratio of 1.3114 at the maximum of the offering range. |
(6) | Based upon 18,963,446 total shares issued and outstanding at the minimum of the offering range. |
(7) | Based upon 22,309,937 total shares issued and outstanding at the midpoint of the offering range. |
(8) | Based upon 25,656,427 total shares issued and outstanding at the maximum of the offering range. |
(9) | Joseph F. Jeamel, Jr. served as Chief Operating Officer of Rockville Bank until his planned retirement, effective as of June 30, 2010. |
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Total | ||||||||||||||||||||||||||||||||||||
Shares of | ||||||||||||||||||||||||||||||||||||
Common | ||||||||||||||||||||||||||||||||||||
Shares of New Rockville | Stock to be | |||||||||||||||||||||||||||||||||||
Financial to be Issued | Issued in | Equivalent Pro | Shares to be | |||||||||||||||||||||||||||||||||
Shares to be Sold in | for Shares of Existing | Conversion | Forma Book | Received for | ||||||||||||||||||||||||||||||||
This Offering | Rockville Financial | and | Exchange | Equivalent per | Value Per | 100 Existing | ||||||||||||||||||||||||||||||
Amount | Percent | Amount | Percent | Offering(1) | Ratio | Share Value(2) | Exchanged Share | Shares | ||||||||||||||||||||||||||||
Minimum | 11,050,000 | 58.27 | % | 7,913,446 | 41.73 | % | 18,963,446 | 0.9693 | $ | 9.69 | $ | 13.65 | 97 | |||||||||||||||||||||||
Midpoint | 13,000,000 | 58.27 | 9,309,937 | 41.73 | 22,309,937 | 1.1404 | 11.40 | 14.52 | 114 | |||||||||||||||||||||||||||
Maximum | 14,950,000 | 58.27 | 10,706,427 | 41.73 | 25,656,427 | 1.3114 | 13.11 | 15.38 | 131 | |||||||||||||||||||||||||||
Adjusted Maximum | 17,192,500 | 58.27 | 12,312,391 | 41.73 | 29,504,891 | 1.5082 | 15.08 | 16.38 | 151 |
(1) | Valuation and ownership ratios reflect dilutive impact of Rockville Financial MHC’s assets upon completion of the conversion. See “IMPACT OF ROCKVILLE FINANCIAL MHC’S ASSETS ON MINORITY STOCK OWNERSHIP” for more information regarding the dilutive impact of Rockville Financial MHC’s assets on the valuation and ownership ratios. | |
(2) | Represents the value of shares of New Rockville Financial common stock received in the conversion by a holder of one share of Existing Rockville Financial common stock, at the exchange ratios assuming the price of $10.00 per share. |
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��� | our historical, present and projected operating results and financial condition; | |
• | the economic, demographic and competition characteristics of our market area; | |
• | a comparative evaluation of our operating and financial statistics with those of other similarly-situated, publicly-traded savings and thrift holding companies; | |
• | the effect of the capital raised in this offering on our net worth and earnings potential; | |
• | the trading market for our securities and comparable institutions and general economic conditions in the market for such securities; and | |
• | the contribution of cash to the charitable foundation. |
• | Existing Rockville Financial’s financial condition and results of operations; | |
• | comparison of financial performance ratios of New Rockville Financial to those of other financial institutions of similar size; | |
• | market conditions generally and in particular for financial institutions; and | |
• | the historical trading price of the publicly held shares of Existing Rockville Financial common stock. |
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• | The minimum number of shares of common stock that may be purchased is 25. | |
• | No individual, singly or together with any associates, and no group of persons acting in concert may purchase more than 5.0% of the shares of common stock sold in the offering. Unless we determine otherwise, persons having the same address and persons exercising subscription rights through qualifying deposit accounts registered to the same address will be subject to this overall purchase limitation. | |
• | No person, together with any associate or persons acting in concert may purchase shares of common stock, that when combined with any shares of common stock received in exchange for shares of Existing Rockville Financial, would exceed 5.0% of the total number of shares of New Rockville Financial outstanding after the consummation of the offering and the conversion, provided, however, that this limitation does not require a shareholder to divest any shares of New Rockville Financial received in exchange for shares of Existing Rockville Financial or otherwise limit the amount of shares to be issued to such shareholders in the exchange. |
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• | provide advice on the financial and securities market implications of the plan of conversion and any related corporate documents, including our business plan; | |
• | assist in structuring our stock offering, including developing and assisting in implementing a marketing strategy for the offering; | |
• | review all offering documents, including this prospectus, stock order forms, letters, brochures and other related offering materials (we are responsible for the preparation and filing of such documents); | |
• | assist us in preparing for and scheduling meetings with potential investors and broker-dealers, as necessary; | |
• | assist us in analyzing proposals from outside vendors retained in connection with the offering, including printers, transfer agents and appraisal firms; | |
• | assist us in the drafting and distribution of press releases as required or appropriate in connection with the offering; | |
• | meet with the Board of Directors and management to discuss any of these services; and | |
• | provide such other financial advisory and investment banking services in connection with the offering as may be agreed upon by Keefe, Bruyette & Woods, Inc. and us. |
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• | consolidate accounts and develop a central file; | |
• | prepare proxy forms and proxy materials; | |
• | tabulate proxies and ballots; | |
• | act as inspector of election at the special meeting of members; | |
• | assist us in establishing and managing the Stock Information Center; | |
• | assist our financial printer with labeling of stock offering materials; | |
• | process stock order forms and certification forms and produce daily reports and analysis; | |
• | assist our transfer agent with the generation and mailing of stock certificates; | |
• | advise us on interest and refund calculations; and | |
• | create tax forms for interest reporting. |
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ROCKVILLE FINANCIAL AND NEW ROCKVILLE FINANCIAL
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FOLLOWING THE CONVERSION
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Page | ||||
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REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS | ||||
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F-5 | ||||
CONSOLIDATED FINANCIAL STATEMENTS: | ||||
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/s/ William J. McGurk | /s/ John T. Lund | |
William J. McGurk | John T. Lund | |
President, Chief Executive Officer and Director | Senior Vice President, Chief Financial Officer and Treasurer |
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as to which the date is September 16, 2010
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September 30, | December 31, | |||||||||||
2010 | 2009 | 2008 | ||||||||||
(Unaudited) | ||||||||||||
ASSETS | ||||||||||||
CASH AND CASH EQUIVALENTS: | ||||||||||||
Cash and due from banks | $ | 23,677 | $ | 18,507 | $ | 14,607 | ||||||
Short-term investments | 13,749 | 800 | 294 | |||||||||
Total cash and cash equivalents | 37,426 | 19,307 | 14,901 | |||||||||
AVAILABLE FOR SALE SECURITIES — at fair value | 126,143 | 102,751 | 141,250 | |||||||||
HELD TO MATURITY SECURITIES — at amortized cost | 15,431 | 19,074 | 24,138 | |||||||||
LOANS HELD FOR SALE | 364 | — | — | |||||||||
LOANS RECEIVABLE (net of allowance for loan losses of $14,094 (unaudited) at September 30, 2010, $12,539 in 2009 and $12,553 in 2008) | 1,388,516 | 1,361,019 | 1,291,791 | |||||||||
FEDERAL HOME LOAN BANK STOCK, at cost | 17,007 | 17,007 | 17,007 | |||||||||
ACCRUED INTEREST RECEIVABLE | 4,692 | 4,287 | 4,636 | |||||||||
DEFERRED TAXASSET-Net | 10,642 | 10,608 | 11,476 | |||||||||
PREMISES ANDEQUIPMENT-Net | 14,986 | 15,863 | 16,405 | |||||||||
GOODWILL | 1,149 | 1,070 | 1,070 | |||||||||
CASH SURRENDER VALUE OF BANK-OWNED LIFE INSURANCE | 10,364 | 10,076 | 9,705 | |||||||||
OTHER REAL ESTATE OWNED | 5,895 | 3,061 | — | |||||||||
PREPAID FDIC ASSESSMENTS | 4,238 | 5,884 | — | |||||||||
OTHER ASSETS | 2,915 | 1,127 | 694 | |||||||||
$ | 1,639,768 | $ | 1,571,134 | $ | 1,533,073 | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY: | ||||||||||||
LIABILITIES: | ||||||||||||
DEPOSITS: | ||||||||||||
Non-interest-bearing | $ | 164,577 | $ | 150,484 | $ | 116,113 | ||||||
Interest-bearing | 1,010,401 | 978,624 | 926,395 | |||||||||
Total deposits | 1,174,978 | 1,129,108 | 1,042,508 | |||||||||
MORTGAGORS’ AND INVESTORS’ ESCROW ACCOUNTS | 3,191 | 6,385 | 6,077 | |||||||||
ADVANCES FROM THE FEDERAL HOME LOAN BANK | 276,428 | 263,802 | 322,882 | |||||||||
ACCRUED EXPENSES AND OTHER LIABILITIES | 20,032 | 14,411 | 15,829 | |||||||||
Total liabilities | 1,474,629 | 1,413,706 | 1,387,296 | |||||||||
COMMITMENTS AND CONTINGENCIES (Note 16) | ||||||||||||
STOCKHOLDERS’ EQUITY: | ||||||||||||
Preferred stock (no par value; 1,000,000 shares authorized; no shares issued and outstanding at September 30, 2010 (unaudited), December 31, 2009 and 2008) | — | — | — | |||||||||
Common stock (no par value; 29,000,000 shares authorized; 19,551,938 (unaudited), 19,554,774 and 19,568,284 shares issued and outstanding at September 30, 2010, December 31, 2009 and 2008, respectively.) | 85,249 | 85,249 | 85,249 | |||||||||
Additional paid in capital | 4,484 | 4,082 | 3,380 | |||||||||
Unearned compensation — ESOP | (3,654 | ) | (4,178 | ) | (5,035 | ) | ||||||
Treasury stock, at cost (698,826 shares at September 30, 2010 (unaudited) and December 31, 2009, respectively, and 695,253 shares at December 31, 2008) | (9,663 | ) | (9,663 | ) | (9,709 | ) | ||||||
Retained earnings | 89,155 | 82,971 | 75,985 | |||||||||
Accumulated other comprehensive loss, net of tax | (432 | ) | (1,033 | ) | (4,093 | ) | ||||||
Total stockholders’ equity | 165,139 | 157,428 | 145,777 | |||||||||
$ | 1,639,768 | $ | 1,571,134 | $ | 1,533,073 | |||||||
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Nine Months Ended September 30, | Years Ended December 31, | |||||||||||||||||||
2010 | 2009 | 2009 | 2008 | 2007 | ||||||||||||||||
(Unaudited) | ||||||||||||||||||||
INTEREST AND DIVIDEND INCOME: | ||||||||||||||||||||
Loans | $ | 52,831 | $ | 51,965 | $ | 69,517 | $ | 68,458 | $ | 66,995 | ||||||||||
Securities-interest | 3,460 | 4,837 | 6,116 | 7,406 | 5,600 | |||||||||||||||
Securities-dividends | 335 | 319 | 428 | 1,647 | 1,180 | |||||||||||||||
Interest-bearing deposits | 4 | 1 | 1 | 34 | 102 | |||||||||||||||
Total interest and dividend income | 56,630 | 57,122 | 76,062 | 77,545 | 73,877 | |||||||||||||||
INTEREST EXPENSE: | ||||||||||||||||||||
Deposits | 8,668 | 15,439 | 19,371 | 25,069 | 27,081 | |||||||||||||||
Borrowed funds | 7,852 | 7,819 | 10,404 | 9,877 | 8,496 | |||||||||||||||
Total interest expense | 16,520 | 23,258 | 29,775 | 34,946 | 35,577 | |||||||||||||||
Net interest income | 40,110 | 33,864 | 46,287 | 42,599 | 38,300 | |||||||||||||||
PROVISION FOR LOAN LOSSES | 3,114 | 1,303 | 1,961 | 2,393 | 749 | |||||||||||||||
Net interest income after provision for loan losses | 36,996 | 32,561 | 44,326 | 40,206 | 37,551 | |||||||||||||||
NON-INTEREST INCOME (LOSS): | ||||||||||||||||||||
Totalother-than-temporary impairment losses on equity securities | — | (357 | ) | (362 | ) | (13,315 | ) | (233 | ) | |||||||||||
Totalother-than-temporary impairment losses on debt securities | — | — | — | (1,566 | ) | — | ||||||||||||||
Portion of impairment losses recognized in other comprehensive loss debt securities | — | — | — | — | — | |||||||||||||||
Net impairment losses recognized in earnings | — | (357 | ) | (362 | ) | (14,881 | ) | (233 | ) | |||||||||||
Service charges and fees | 5,182 | 3,874 | 5,221 | 5,131 | 4,551 | |||||||||||||||
Net gain from sale of securities | 190 | 936 | 936 | 381 | 508 | |||||||||||||||
Net gain from sale of loans | 1,192 | 656 | 782 | — | — | |||||||||||||||
Other income | 234 | 273 | 395 | 382 | 368 | |||||||||||||||
Total non-interest income (loss) | 6,798 | 5,382 | 6,972 | (8,987 | ) | 5,194 | ||||||||||||||
NON-INTEREST EXPENSE: | ||||||||||||||||||||
Salaries and employee benefits | 14,579 | 14,092 | 18,571 | 17,150 | 16,082 | |||||||||||||||
Service bureau fees | 3,006 | 2,924 | 3,872 | 3,808 | 3,361 | |||||||||||||||
Occupancy and equipment | 3,238 | 3,324 | 4,380 | 4,103 | 3,594 | |||||||||||||||
Professional fees | 1,136 | 903 | 1,131 | 1,484 | 1,550 | |||||||||||||||
Marketing and promotions | 918 | 767 | 1,156 | 1,315 | 1,131 | |||||||||||||||
FDIC assessments | 1,207 | 1,874 | 2,222 | 654 | 229 | |||||||||||||||
Other real estate owned | 965 | 11 | 69 | — | — | |||||||||||||||
Other | 3,854 | 3,766 | 5,230 | 5,248 | 4,354 | |||||||||||||||
Total non-interest expense | 28,903 | 27,661 | 36,631 | 33,762 | 30,301 | |||||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES | 14,891 | 10,282 | 14,667 | (2,543 | ) | 12,444 | ||||||||||||||
INCOME TAX EXPENSE (BENEFIT) | 5,314 | 3,432 | 4,935 | (956 | ) | 4,116 | ||||||||||||||
NET INCOME (LOSS) | $ | 9,577 | $ | 6,850 | $ | 9,732 | $ | (1,587 | ) | $ | 8,328 | |||||||||
Earnings (Loss) per share: | ||||||||||||||||||||
Basic | $ | 0.52 | $ | 0.37 | $ | 0.53 | $ | (0.09 | ) | $ | 0.44 | |||||||||
Diluted | 0.52 | 0.37 | 0.53 | (0.09 | ) | 0.44 | ||||||||||||||
Weighted-average shares outstanding: | ||||||||||||||||||||
Basic | 18,527,501 | 18,460,244 | 18,469,092 | 18,428,158 | 18,750,935 | |||||||||||||||
Diluted | 18,541,739 | 18,466,638 | 18,473,665 | 18,428,158 | 18,750,935 |
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Accumulated | ||||||||||||||||||||||||||||||||||||
Additional | Unearned | Other | Total | |||||||||||||||||||||||||||||||||
Common Stock | Paid-in | Compensation | Retained | Treasury Stock | Comprehensive | Stockholders’ | ||||||||||||||||||||||||||||||
Shares | Amount | Capital | — ESOP | Earnings | Shares | Amount | Loss | Equity | ||||||||||||||||||||||||||||
Balance at December 31, 2006 | 19,574,640 | $ | 85,249 | $ | 1,854 | $ | (6,434 | ) | $ | 76,063 | — | $ | — | $ | (1,668 | ) | $ | 155,064 | ||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | 8,328 | — | — | — | 8,328 | |||||||||||||||||||||||||||
Change in net unrealized gain on securities available for sale, net of reclassification adjustments and tax effects | — | — | — | — | — | — | — | 451 | 451 | |||||||||||||||||||||||||||
Change in accumulated other comprehensive loss related to employee benefit plans, net of reclassification adjustments and tax effects | — | — | — | — | — | — | — | 976 | 976 | |||||||||||||||||||||||||||
Total comprehensive income | — | — | — | — | — | — | — | — | 9,755 | |||||||||||||||||||||||||||
Common stock repurchased | — | — | — | — | — | 496,730 | (7,293 | ) | — | (7,293 | ) | |||||||||||||||||||||||||
Share-based compensation expense | (4,800 | ) | — | 1,276 | 700 | — | — | — | — | 1,976 | ||||||||||||||||||||||||||
Treasury stock issued | — | — | (100 | ) | — | — | — | — | — | (100 | ) | |||||||||||||||||||||||||
Cancellation of shares for tax withholding | (1,556 | ) | — | (21 | ) | — | — | — | — | — | (21 | ) | ||||||||||||||||||||||||
Dividends paid, $0.16 per common share | — | — | — | — | (3,008 | ) | — | — | — | (3,008 | ) | |||||||||||||||||||||||||
Balance at December 31, 2007 | 19,568,284 | 85,249 | 3,009 | (5,734 | ) | 81,383 | 496,730 | (7,293 | ) | (241 | ) | 156,373 | ||||||||||||||||||||||||
Comprehensive income loss: | ||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | (1,587 | ) | — | — | — | (1,587 | ) | |||||||||||||||||||||||||
Change in net unrealized gain on securities available for sale, net of reclassification adjustments and tax effects | — | — | — | — | — | — | — | 420 | 420 | |||||||||||||||||||||||||||
Change in accumulated other comprehensive loss related to employee benefit plans, net of reclassification adjustments and tax effects | — | — | — | — | — | — | — | (4,272 | ) | (4,272 | ) | |||||||||||||||||||||||||
Total comprehensive loss | (5,439 | ) | ||||||||||||||||||||||||||||||||||
Common stock repurchased | — | — | — | — | — | 291,082 | (3,787 | ) | — | (3,787 | ) | |||||||||||||||||||||||||
Share-based compensation expense | — | — | 1,956 | 699 | — | — | — | — | 2,655 | |||||||||||||||||||||||||||
Treasury stock issued | — | — | (1,371 | ) | — | — | (92,559 | ) | 1,371 | — | — | |||||||||||||||||||||||||
Cancellation of shares for tax withholding | — | — | (214 | ) | — | — | — | — | — | (214 | ) | |||||||||||||||||||||||||
Dividends paid, $0.20 per common share | — | — | — | — | (3,691 | ) | — | — | — | (3,691 | ) | |||||||||||||||||||||||||
SFAS 158 pension remeasurement | — | — | — | — | (120 | ) | — | — | — | (120 | ) | |||||||||||||||||||||||||
Balance at December 31, 2008 | 19,568,284 | 85,249 | 3,380 | (5,035 | ) | 75,985 | 695,253 | (9,709 | ) | (4,093 | ) | 145,777 | ||||||||||||||||||||||||
Cumulative effect of adjustment to retained earnings relating to impairment of securities | — | — | — | — | 1,034 | — | — | (1,034 | ) | — | ||||||||||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | 9,732 | — | — | — | 9,732 | |||||||||||||||||||||||||||
Change in net unrealized gain on securities available for sale, net of reclassification adjustments and tax effects | — | — | — | — | — | — | — | 1,441 | 1,441 | |||||||||||||||||||||||||||
Change in accumulated other comprehensive loss related to employee benefit plans, net of reclassification adjustments and tax effects | — | — | — | — | — | — | — | 2,653 | 2,653 | |||||||||||||||||||||||||||
Total comprehensive income | 13,826 | |||||||||||||||||||||||||||||||||||
Common stock repurchased | — | — | — | — | — | 20,000 | (198 | ) | — | (198 | ) | |||||||||||||||||||||||||
Share-based compensation expense | — | — | 827 | — | — | — | — | — | 827 | |||||||||||||||||||||||||||
ESOP shares released or committed to be released | — | — | 71 | 857 | — | — | — | — | 928 | |||||||||||||||||||||||||||
Forfeited unvested restricted stock | (9,200 | ) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Treasury stock issued | — | — | (152 | ) | — | (92 | ) | (16,427 | ) | 244 | — | — | ||||||||||||||||||||||||
Cancellation of shares for tax withholding | (4,310 | ) | — | (44 | ) | — | — | — | — | — | (44 | ) | ||||||||||||||||||||||||
Dividends paid, $0.20 per common share | — | — | — | — | (3,688 | ) | — | — | — | (3,688 | ) | |||||||||||||||||||||||||
Balance at December 31, 2009 | 19,554,774 | 85,249 | 4,082 | (4,178 | ) | 82,971 | 698,826 | (9,663 | ) | (1,033 | ) | 157,428 | ||||||||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | 9,577 | — | — | — | 9,577 | |||||||||||||||||||||||||||
Change in net unrealized gain on securities available for sale, net of reclassification adjustments and tax effects | — | — | — | — | — | — | — | 308 | 308 | |||||||||||||||||||||||||||
Change in accumulated other comprehensive loss related to employee benefit plans, net of reclassification adjustments and tax effects | — | — | — | — | — | — | — | 293 | 293 | |||||||||||||||||||||||||||
Total comprehensive income | 10,178 | |||||||||||||||||||||||||||||||||||
Share-based compensation expense | — | — | 350 | — | — | — | — | — | 350 | |||||||||||||||||||||||||||
ESOP shares released or committed to be released | — | — | 82 | 524 | — | — | — | — | 606 | |||||||||||||||||||||||||||
Cancellation of shares for tax withholding | (2,836 | ) | — | (30 | ) | — | — | — | — | — | (30 | ) | ||||||||||||||||||||||||
Dividends paid, $0.18 per common share | — | — | — | — | (3,393 | ) | — | — | — | (3,393 | ) | |||||||||||||||||||||||||
Balance at September 30, 2010 (unaudited) | 19,551,938 | $ | 85,249 | $ | 4,484 | $ | (3,654 | ) | $ | 89,155 | 698,826 | $ | (9,663 | ) | $ | (432 | ) | $ | 165,139 | |||||||||||||||||
F-8
Table of Contents
Nine Months Ended | ||||||||||||||||||||
September 30, | Years Ended December 31, | |||||||||||||||||||
2010 | 2009 | 2009 | 2008 | 2007 | ||||||||||||||||
(Unaudited) | ||||||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||||||||
Net income (loss) | $ | 9,577 | $ | 6,850 | $ | 9,732 | $ | (1,587 | ) | $ | 8,328 | |||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||||||||||
Amortization and accretion of premiums and discounts on investments, net | (125 | ) | (127 | ) | (160 | ) | (59 | ) | 48 | |||||||||||
Share-based compensation expense | 350 | 769 | 827 | 1,743 | 819 | |||||||||||||||
Amortization of ESOP Expense | 606 | 525 | 928 | 912 | 1,036 | |||||||||||||||
Provision for loan losses | 3,114 | 1,303 | 1,961 | 2,393 | 749 | |||||||||||||||
Write-down of OREO | 380 | — | — | — | — | |||||||||||||||
Net gain from sales of securities | (190 | ) | (936 | ) | (936 | ) | (381 | ) | (508 | ) | ||||||||||
Other-than-temporary impairment of securities | — | 357 | 362 | 14,881 | 233 | |||||||||||||||
Loans originated for sale | (46,788 | ) | (38,902 | ) | (43,958 | ) | — | — | ||||||||||||
Principal balance of loans sold | 46,424 | 38,778 | 43,958 | — | — | |||||||||||||||
Loss/(Gain) on sale of OREO | 90 | — | (16 | ) | — | — | ||||||||||||||
Depreciation and amortization | 1,089 | 1,212 | 1,608 | 1,502 | 1,416 | |||||||||||||||
Loss on disposal of equipment | 1 | — | 34 | 3 | 4 | |||||||||||||||
Deferred income tax (benefit) provision | (450 | ) | (630 | ) | (1,242 | ) | (5,528 | ) | 540 | |||||||||||
Increase in cash surrender value of bank-owned life insurance | (288 | ) | (274 | ) | (371 | ) | (383 | ) | (368 | ) | ||||||||||
Net change in: | ||||||||||||||||||||
Deferred loan fees and premiums | (83 | ) | 649 | 784 | 113 | 283 | ||||||||||||||
Accrued interest receivable | (405 | ) | (31 | ) | 349 | (480 | ) | 317 | ||||||||||||
Other assets | (142 | ) | (874 | ) | (6,076 | ) | 2,484 | (2,979 | ) | |||||||||||
Accrued expenses and other liabilities | 5,968 | 1,886 | 2,602 | 167 | 2,955 | |||||||||||||||
Net cash provided by operating activities | 19,128 | 10,555 | 10,386 | 15,780 | 12,873 | |||||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||||||
Proceeds from sales of available for sale securities | 399 | 21,171 | 21,171 | 5,870 | 6,448 | |||||||||||||||
Proceeds from calls and maturities of available for sale securities | 10,723 | 500 | 2,500 | 14,850 | 61,675 | |||||||||||||||
Principal payments on available for sale mortgage-backed securities | 16,284 | 20,543 | 25,525 | 17,596 | 11,832 | |||||||||||||||
Principal payments on held to maturity mortgage-backed securities | 3,694 | 3,881 | 5,135 | 1,842 | — | |||||||||||||||
Purchases of available for sale securities | (49,967 | ) | (6,055 | ) | (8,091 | ) | (57,030 | ) | (82,950 | ) | ||||||||||
Purchases of held to maturity securities | — | — | — | (25,948 | ) | — | ||||||||||||||
Purchase of Federal Home Loan Bank stock | — | — | — | (5,839 | ) | (1,332 | ) | |||||||||||||
Proceeds from sales of portfolio loans | — | — | 161 | 8,175 | 574 | |||||||||||||||
Proceeds from sale of OREO | 682 | — | 1,859 | — | — | |||||||||||||||
Capitalized OREO costs | (95 | ) | — | — | — | — | ||||||||||||||
Purchase of loans | — | (2,529 | ) | (2,529 | ) | (26,212 | ) | (16,656 | ) | |||||||||||
Loan originations, net of principal payments | (34,419 | ) | (65,051 | ) | (74,509 | ) | (159,933 | ) | (67,922 | ) | ||||||||||
Purchases of premises and equipment | (189 | ) | (1,046 | ) | (1,100 | ) | (3,558 | ) | (3,148 | ) | ||||||||||
Net cash used in investing activities | (52,888 | ) | (28,586 | ) | (29,878 | ) | (230,187 | ) | (91,479 | ) | ||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||||||
Net increase in non-interest-bearing deposits | 14,093 | 15,198 | 34,371 | 16,735 | 6,310 | |||||||||||||||
Net increase in interest-bearing deposits | 31,777 | 67,948 | 52,229 | 74,735 | 60,217 | |||||||||||||||
Net (decrease) increase in mortgagors’ and investors’ escrow accounts | (3,194 | ) | (2,908 | ) | 308 | 509 | 248 | |||||||||||||
Net (decrease) increase in short-term Federal Home Loan Bank advances | (15,000 | ) | (51,000 | ) | (51,000 | ) | 38,000 | (37,000 | ) | |||||||||||
Proceeds from long-term Federal Home Loan Bank advances | 37,800 | 8,112 | 8,112 | 113,320 | 67,800 | |||||||||||||||
Repayment of long-term Federal Home Loan Bank advances | (10,174 | ) | (14,143 | ) | (16,192 | ) | (30,179 | ) | (7,169 | ) | ||||||||||
Common stock repurchased | — | (198 | ) | (198 | ) | (4,119 | ) | (7,175 | ) | |||||||||||
Cancellation of shares for tax withholding | (30 | ) | (34 | ) | (44 | ) | — | — | ||||||||||||
Cash dividends paid on common stock | (3,393 | ) | (2,829 | ) | (3,688 | ) | (3,691 | ) | (3,008 | ) | ||||||||||
Net cash provided by financing activities | 51,879 | 20,146 | 23,898 | 205,310 | 80,223 | |||||||||||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 18,119 | 2,115 | 4,406 | (9,097 | ) | 1,617 | ||||||||||||||
CASH AND CASH EQUIVALENTS — Beginning of period | 19,307 | 14,901 | 14,901 | 23,998 | 22,381 | |||||||||||||||
CASH AND CASH EQUIVALENTS — End of period | $ | 37,426 | $ | 17,016 | $ | 19,307 | $ | 14,901 | $ | 23,998 | ||||||||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||||||||||||||||||||
Cash paid during the year for: | ||||||||||||||||||||
Interest | $ | 16,478 | $ | 23,345 | $ | 29,901 | $ | 34,683 | $ | 35,304 | ||||||||||
Income taxes | 6,900 | 3,100 | 4,401 | 1,751 | 4,501 | |||||||||||||||
Transfer of loans to other real estate owned | 3,891 | 2,155 | 4,904 | — | — | |||||||||||||||
Goodwill recognition from subsidiary acquisition | 79 | — | — | — | — | |||||||||||||||
Transfer to fixed assets from subsidiary acquisition | 23 | — | — | — | — |
F-9
Table of Contents
Note 1. | MUTUAL HOLDING COMPANY REORGANIZATION AND MINORITY STOCK ISSUANCE |
Note 2. | BASIS OF PRESENTATION, PRINCIPLES OF CONSOLIDATION AND SIGNIFICANT ACCOUNTING POLICIES |
F-10
Table of Contents
F-11
Table of Contents
F-12
Table of Contents
F-13
Table of Contents
F-14
Table of Contents
F-15
Table of Contents
F-16
Table of Contents
Note 3. | RECENT ACCOUNTING PRONOUNCEMENTS |
F-17
Table of Contents
Note 4. | EARNINGS PER SHARE |
Nine Months Ended | ||||||||||||||||||||
September 30, | Years Ended December 31, | |||||||||||||||||||
2010 | 2009 | 2009 | 2008 | 2007 | ||||||||||||||||
(Unaudited) | ||||||||||||||||||||
(In thousands except share data) | ||||||||||||||||||||
Net income (loss) available to common stockholders | $ | 9,577 | $ | 6,850 | $ | 9,732 | $ | (1,587 | ) | $ | 8,328 | |||||||||
Weighted-average basic shares outstanding | 18,527,501 | 18,460,244 | 18,469,092 | 18,428,158 | 18,750,935 | |||||||||||||||
Effect of dilutive options | 14,238 | 6,394 | 4,573 | — | — | |||||||||||||||
Average number of common shares outstanding used to calculate diluted earnings per common share | 18,541,739 | 18,466,638 | 18,473,665 | 18,428,158 | 18,750,935 | |||||||||||||||
Note 5. | FAIR VALUE MEASUREMENT |
F-18
Table of Contents
Quoted | ||||||||||||||||
Prices in | ||||||||||||||||
Active | ||||||||||||||||
Markets for | Other | Significant | ||||||||||||||
Identical | Observable | Unobservable | ||||||||||||||
Total | Assets | Inputs | Inputs | |||||||||||||
Fair Value | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
(In thousands) | ||||||||||||||||
September 30, 2010 (Unaudited) | ||||||||||||||||
Available for Sale Securities: | ||||||||||||||||
U.S. Government and government-sponsored enterprise obligations | $ | 46,127 | $ | 2,002 | $ | 44,125 | $ | — | ||||||||
Residential mortgage-backed securities | 59,818 | — | 59,818 | — | ||||||||||||
Corporate debt securities | 4,671 | — | 4,671 | — | ||||||||||||
Marketable equity securities | 15,527 | 15,454 | — | 73 | ||||||||||||
Total assets measured at fair value | $ | 126,143 | $ | 17,456 | $ | 108,614 | $ | 73 | ||||||||
F-19
Table of Contents
Quoted | ||||||||||||||||
Prices in | ||||||||||||||||
Active | ||||||||||||||||
Markets for | Other | Significant | ||||||||||||||
Identical | Observable | Unobservable | ||||||||||||||
Total | Assets | Inputs | Inputs | |||||||||||||
Fair Value | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
(In thousands) | ||||||||||||||||
December 31, 2009 | ||||||||||||||||
Available for Sale Securities: | ||||||||||||||||
U.S. Government and government-sponsored enterprise obligations | $ | 7,052 | $ | 2,018 | $ | 5,034 | $ | — | ||||||||
Residential mortgage-backed securities | 75,967 | — | 75,967 | — | ||||||||||||
Corporate debt securities | 4,656 | — | 4,656 | — | ||||||||||||
Other debt securities | 731 | — | 731 | — | ||||||||||||
Marketable equity securities | 14,345 | 14,272 | — | 73 | ||||||||||||
Total assets measured at fair value | $ | 102,751 | $ | 16,290 | $ | 86,388 | $ | 73 | ||||||||
Quoted | ||||||||||||||||
Prices in | ||||||||||||||||
Active | ||||||||||||||||
Markets for | Other | Significant | ||||||||||||||
Identical | Observable | Unobservable | ||||||||||||||
Total | Assets | Inputs | Inputs | |||||||||||||
Fair Value | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
(In thousands) | ||||||||||||||||
December 31, 2008 | ||||||||||||||||
Available for Sale Securities: | $ | 141,250 | $ | 14,958 | $ | 124,178 | $ | 2,114 | ||||||||
Total Assets Measured at Fair Value | $ | 141,250 | $ | 14,958 | $ | 124,178 | $ | 2,114 | ||||||||
Other Liabilities | $ | 338 | $ | 338 | $ | — | $ | — | ||||||||
Total Liabilities Measured at Fair Value | $ | 338 | $ | 338 | $ | — | $ | — | ||||||||
F-20
Table of Contents
Assets | ||||
Securities | ||||
Available | ||||
for Sale | ||||
(In thousands) | ||||
Balance as of December 31, 2007 | $ | 308 | ||
Total gains or losses (realized/unrealized): | ||||
Included in earnings-realized | — | |||
Included in earnings-unrealized | (1,073 | ) | ||
Included in other comprehensive income | 446 | |||
Purchases, sales, issuances and settlements, net | (7 | ) | ||
Transfers in and/or out of Level 3 | 2,440 | |||
Balance as of December 31, 2008 | 2,114 | |||
Total gains or losses (realized/unrealized): | ||||
Included in earnings-realized | — | |||
Included in earnings-unrealized | — | |||
Included in other comprehensive income | 43 | |||
Purchases, sales, issuances and settlements, net | — | |||
Transfers in and/or out of Level 3 | (2,084 | ) | ||
Balance as of December 31, 2009 | 73 | |||
Total gains or losses (realized/unrealized) (unaudited): | ||||
Included in earnings-realized | — | |||
Included in earnings-unrealized | — | |||
Included in other comprehensive income | — | |||
Purchases, sales, issuances and settlements, net | — | |||
Transfers in and/or out of Level 3 (unaudited) | — | |||
Balance as of September 30, 2010 (unaudited) | $ | 73 | ||
Change in unrealized losses relating to instruments still held at September 30, 2010 (unaudited) | — | |||
Change in unrealized losses relating to instruments still held at December 31, 2009 | 43 | |||
Change in unrealized losses relating to instruments still held at December 31, 2008 | 1,073 |
F-21
Table of Contents
Quoted | ||||||||||||||||||||
Prices in | ||||||||||||||||||||
Active | ||||||||||||||||||||
Markets for | Other | Significant | ||||||||||||||||||
Identical | Observable | Unobservable | ||||||||||||||||||
Assets | Inputs | Inputs | Total Gains/ | |||||||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | (Losses) | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
At or for the Nine Months Ended September 30, 2010 (unaudited) | ||||||||||||||||||||
Other real estate owned | $ | 5,895 | $ | — | $ | — | $ | 5,895 | $ | — | ||||||||||
Impaired loans | 3,329 | — | — | 3,329 | (1,090 | ) | ||||||||||||||
Total assets measured at fair value | $ | 9,196 | $ | — | $ | — | $ | 9,196 | $ | (1,090 | ) | |||||||||
Quoted | ||||||||||||||||||||
Prices in | ||||||||||||||||||||
Active | ||||||||||||||||||||
Markets for | Other | Significant | ||||||||||||||||||
Identical | Observable | Unobservable | ||||||||||||||||||
Assets | Inputs | Inputs | Total Gains/ | |||||||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | (Losses) | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
At or for the Year Ended December 31, 2009 | ||||||||||||||||||||
Impaired loans | $ | 5,473 | $ | — | $ | — | $ | 5,473 | $ | (381 | ) | |||||||||
Total assets measured at fair value | $ | 5,473 | $ | — | $ | — | $ | 5,473 | $ | (381 | ) | |||||||||
Quoted | ||||||||||||||||||
Prices in | ||||||||||||||||||
Active | ||||||||||||||||||
Markets for | Other | Significant | ||||||||||||||||
Identical | Observable | Unobservable | ||||||||||||||||
Assets | Inputs | Inputs | ||||||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | |||||||||||||||
(In thousands) | ||||||||||||||||||
At or for the Year Ended December 31, 2008 | ||||||||||||||||||
Impaired loans | $ | 9,962 | $ | — | $ | — | $ | 9,962 | ||||||||||
Total assets measured at fair value | $ | 9,962 | $ | — | $ | — | $ | 9,962 | ||||||||||
F-22
Table of Contents
September 30, | December 31, | |||||||||||||||||||||||
2010 | 2009 | 2008 | ||||||||||||||||||||||
Carrying | Fair | Carrying | Fair | Carrying | Fair | |||||||||||||||||||
Amount | Value | Amount | Value | Amount | Value | |||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Financial assets: | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 37,426 | $ | 37,426 | $ | 19,307 | $ | 19,307 | $ | 14,901 | $ | 14,901 | ||||||||||||
Available for sale securities | 126,143 | 126,143 | 102,751 | 102,751 | 141,250 | 141,250 | ||||||||||||||||||
Held to maturity securities | 15,431 | 16,556 | 19,074 | 20,011 | 24,138 | 25,069 | ||||||||||||||||||
Loansreceivable-net | 1,388,516 | 1,406,795 | 1,361,019 | 1,360,789 | 1,291,791 | 1,286,887 | ||||||||||||||||||
Loans held for sale | 364 | 364 | — | — | — | — | ||||||||||||||||||
FHLBB stock | 17,007 | 17,007 | 17,007 | 17,007 | 17,007 | 17,007 | ||||||||||||||||||
Accrued interest receivable | 4,692 | 4,692 | 4,287 | 4,287 | 4,636 | 4,636 | ||||||||||||||||||
Financial liabilities: | ||||||||||||||||||||||||
Regular savings | 157,893 | 157,893 | 143,601 | 143,601 | 121,527 | 121,527 | ||||||||||||||||||
Money market and investment savings | 231,999 | 231,999 | 234,737 | 234,737 | 188,110 | 188,110 | ||||||||||||||||||
Demand and NOW | 277,984 | 277,984 | 258,583 | 258,583 | 203,056 | 203,056 | ||||||||||||||||||
Club accounts | 1,123 | 1,123 | 247 | 247 | 227 | 227 | ||||||||||||||||||
Time deposits | 505,979 | 512,475 | 491,940 | 498,647 | 529,588 | 538,262 | ||||||||||||||||||
Mortgagors’ and investors’ escrow accounts | 3,191 | 3,191 | 6,385 | 6,385 | 6,077 | 6,077 | ||||||||||||||||||
Advances from the FHLBB | 276,428 | 295,014 | 263,802 | 276,619 | 322,882 | 335,043 |
Note 6. | RESTRICTIONS ON CASH AND DUE FROM BANKS |
F-23
Table of Contents
Note 7. | INVESTMENT SECURITIES |
Gross | Gross | |||||||||||||||
Amortized | Unrealized | Unrealized | Fair | |||||||||||||
Cost | Gains | Losses | Value | |||||||||||||
(In thousands) | ||||||||||||||||
September 30, 2010 (unaudited) | ||||||||||||||||
Available for sale: | ||||||||||||||||
Debt securities: | ||||||||||||||||
U.S. Government and government-sponsored enterprise obligations | $ | 45,997 | $ | 155 | $ | 25 | $ | 46,127 | ||||||||
Government-sponsored residential mortgage- backed securities | 56,334 | 3,485 | 1 | 59,818 | ||||||||||||
Corporate debt securities | 5,888 | — | 1,217 | 4,671 | ||||||||||||
Total debt securities | 108,219 | 3,640 | 1,243 | 110,616 | ||||||||||||
Marketable equity securities, by sector: | ||||||||||||||||
Banks | 1,256 | 2,739 | 10 | 3,985 | ||||||||||||
Consumer and household products | 1,134 | 65 | 25 | 1,174 | ||||||||||||
Food and beverage service | 1,151 | 217 | 41 | 1,327 | ||||||||||||
Government-sponsored enterprises | 283 | 15 | 92 | 206 | ||||||||||||
Healthcare/pharmaceutical | 387 | — | 32 | 355 | ||||||||||||
Industrial | 695 | 240 | 17 | 918 | ||||||||||||
Integrated utilities | 742 | 93 | — | 835 | ||||||||||||
Other industries | 1,030 | 329 | 41 | 1,318 | ||||||||||||
Mutual funds | 2,656 | 141 | — | 2,797 | ||||||||||||
Oil and gas | 754 | 500 | 4 | 1,250 | ||||||||||||
Technology/Semiconductor | 228 | 92 | — | 320 | ||||||||||||
Telecommunications | 661 | 63 | 10 | 714 | ||||||||||||
Transportation | 294 | 34 | — | 328 | ||||||||||||
Total marketable equity securities | 11,271 | 4,528 | 272 | 15,527 | ||||||||||||
Total securities available for sale | $ | 119,490 | $ | 8,168 | $ | 1,515 | $ | 126,143 | ||||||||
F-24
Table of Contents
Gross | Gross | |||||||||||||||
Amortized | Unrealized | Unrealized | Fair | |||||||||||||
Cost | Gains | Losses | Value | |||||||||||||
(In thousands) | ||||||||||||||||
September 30, 2010 (unaudited) | ||||||||||||||||
Held to maturity: | ||||||||||||||||
Government-sponsored residential mortgage- backed securities | $ | 15,431 | $ | 1,125 | $ | — | $ | 16,556 | ||||||||
Gross | Gross | |||||||||||||||
Amortized | Unrealized | Unrealized | Fair | |||||||||||||
Cost | Gains | Losses | Value | |||||||||||||
(In thousands) | ||||||||||||||||
December 31, 2009 | ||||||||||||||||
Available for sale: | ||||||||||||||||
Debt securities: | ||||||||||||||||
U.S. Government and government-sponsored enterprise obligations | $ | 7,017 | $ | 36 | $ | 1 | $ | 7,052 | ||||||||
Government-sponsored residential mortgage- backed securities | 72,537 | 3,431 | 1 | 75,967 | ||||||||||||
Corporate debt securities | 5,879 | — | 1,223 | 4,656 | ||||||||||||
Other debt securities | 722 | 9 | — | 731 | ||||||||||||
Total debt securities | 86,155 | $ | 3,476 | 1,225 | 88,406 | |||||||||||
Marketable equity securities, by sector: | ||||||||||||||||
Banks | 1,256 | 2,470 | 173 | 3,553 | ||||||||||||
Consumer and household products | 839 | 40 | 17 | 862 | ||||||||||||
Food and beverage service | 948 | 158 | 41 | 1,065 | ||||||||||||
Government-sponsored enterprises | 284 | 217 | — | 501 | ||||||||||||
Healthcare/pharmaceutical | 387 | 3 | 19 | 371 | ||||||||||||
Industrial | 639 | 134 | 13 | 760 | ||||||||||||
Integrated utilities | 742 | 69 | — | 811 | ||||||||||||
Other industries | 1,030 | 263 | 6 | 1,287 | ||||||||||||
Mutual funds | 2,621 | 62 | — | 2,683 | ||||||||||||
Oil and gas | 754 | 353 | 12 | 1,095 | ||||||||||||
Technology/Semiconductor | 342 | 173 | — | 515 | ||||||||||||
Telecommunications | 354 | — | 15 | 339 | ||||||||||||
Transportation | 313 | 190 | — | 503 | ||||||||||||
Total marketable equity securities | 10,509 | 4,132 | 296 | 14,345 | ||||||||||||
Total securities available for sale | $ | 96,664 | $ | 7,608 | $ | 1,521 | $ | 102,751 | ||||||||
F-25
Table of Contents
Gross | Gross | |||||||||||||||
Amortized | Unrealized | Unrealized | Fair | |||||||||||||
Cost | Gains | Losses | Value | |||||||||||||
(In thousands) | ||||||||||||||||
December 31, 2009 | ||||||||||||||||
Held to maturity: | ||||||||||||||||
Government-sponsored residential mortgage- backed securities | $ | 19,074 | $ | 937 | $ | — | $ | 20,011 | ||||||||
Gross | Gross | |||||||||||||||
Amortized | Unrealized | Unrealized | Fair | |||||||||||||
Cost | Gains | Losses | Value | |||||||||||||
(In thousands) | ||||||||||||||||
December 31, 2008 | ||||||||||||||||
Available for sale: | ||||||||||||||||
Debt securities: | ||||||||||||||||
U.S. Government and government-sponsored enterprise obligations | $ | 2,031 | $ | 17 | $ | — | $ | 2,048 | ||||||||
Mortgage-backed securities | 117,517 | 3,222 | 344 | 120,395 | ||||||||||||
Corporate debt securities | 4,831 | 56 | — | 4,887 | ||||||||||||
Other debt securities | 725 | 14 | — | 739 | ||||||||||||
Total debt securities | 125,104 | 3,309 | 344 | 128,069 | ||||||||||||
Marketable equity securities | 10,437 | 3,011 | 508 | 12,940 | ||||||||||||
Other equity securities | 241 | — | — | 241 | ||||||||||||
Total securities available for sale | $ | 135,782 | $ | 6,320 | $ | 852 | $ | 141,250 | ||||||||
Gross | Gross | |||||||||||||||
Amortized | Unrealized | Unrealized | Fair | |||||||||||||
Cost | Gains | Losses | Value | |||||||||||||
(In thousands) | ||||||||||||||||
December 31, 2008 | ||||||||||||||||
Held to maturity: | ||||||||||||||||
Government-sponsored residential mortgage- backed securities | $ | 24,138 | $ | 931 | $ | — | $ | 25,069 | ||||||||
F-26
Table of Contents
Available for Sale | Held to Maturity | |||||||||||||||
Amortized | Fair | Amortized | Fair | |||||||||||||
Cost | Value | Cost | Value | |||||||||||||
(In thousands) | ||||||||||||||||
September 30, 2010 (unaudited) | ||||||||||||||||
Maturity: | ||||||||||||||||
Within 1 year | $ | 2,102 | $ | 2,102 | $ | — | $ | — | ||||||||
Over 1 year to 5 years | 7,963 | 7,954 | — | — | ||||||||||||
Over 5 years to 10 years | 38,995 | 39,106 | — | — | ||||||||||||
Over 10 years | 2,825 | 1,636 | — | — | ||||||||||||
51,885 | 50,798 | — | — | |||||||||||||
Mortgage-backed securities | 56,334 | 59,818 | 15,431 | 16,556 | ||||||||||||
Total debt securities | $ | 108,219 | $ | 110,616 | $ | 15,431 | $ | 16,556 | ||||||||
December 31, 2009 | ||||||||||||||||
Maturity: | ||||||||||||||||
Within 1 year | $ | 2,019 | $ | 2,018 | $ | — | $ | — | ||||||||
Over 1 year to 5 years | 8,050 | 8,006 | — | — | ||||||||||||
Over 5 years to 10 years | 722 | 731 | — | — | ||||||||||||
Over 10 years | 2,827 | 1,684 | — | — | ||||||||||||
13,618 | 12,439 | — | — | |||||||||||||
Mortgage-backed securities | 72,537 | 75,967 | 19,074 | 20,011 | ||||||||||||
Total debt securities | $ | 86,155 | $ | 88,406 | $ | 19,074 | $ | 20,011 | ||||||||
F-27
Table of Contents
Less than Twelve Months | Over Twelve Months | Total | ||||||||||||||||||||||
Gross | Gross | |||||||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | |||||||||||||||||||
Value | Losses | Value | Losses | Value | Losses | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
September 30, 2010 (unaudited): | ||||||||||||||||||||||||
Available for Sale: | ||||||||||||||||||||||||
U.S. Government and government- sponsored enterprises | $ | 4,975 | $ | 25 | $ | — | $ | — | $ | 4,975 | $ | 25 | ||||||||||||
Government-sponsored residential mortgage-backed securities | — | — | 31 | 1 | 31 | 1 | ||||||||||||||||||
Corporate debt | — | — | 4,571 | 1,217 | 4,571 | 1,217 | ||||||||||||||||||
Total debt securities | 4,975 | 25 | 4,602 | 1,218 | 9,577 | 1,243 | ||||||||||||||||||
Marketable equity securities | 1,176 | 200 | 606 | 72 | 1,782 | 272 | ||||||||||||||||||
Total | $ | 6,151 | $ | 225 | $ | 5,208 | $ | 1,290 | $ | 11,359 | $ | 1,515 | ||||||||||||
December 31, 2009: | ||||||||||||||||||||||||
Available for Sale: | ||||||||||||||||||||||||
U.S. Government and government- sponsored enterprises | $ | 2,018 | $ | 1 | $ | — | $ | — | $ | 2,018 | $ | 1 | ||||||||||||
Government-sponsored residential mortgage-backed securities | — | — | 58 | 1 | 58 | 1 | ||||||||||||||||||
Corporate debt | — | — | 4,556 | 1,223 | 4,556 | 1,223 | ||||||||||||||||||
Total debt securities | 2,018 | 1 | 4,614 | 1,224 | 6,632 | 1,225 | ||||||||||||||||||
Marketable equity securities | 1,097 | 184 | 1,099 | 112 | 2,196 | 296 | ||||||||||||||||||
Total | $ | 3,115 | $ | 185 | $ | 5,713 | $ | 1,336 | $ | 8,828 | $ | 1,521 | ||||||||||||
December 31, 2008: | ||||||||||||||||||||||||
Available for Sale: | ||||||||||||||||||||||||
Residential mortgage-backed securities | $ | 13,188 | $ | 331 | $ | 368 | $ | 13 | $ | 13,556 | $ | 344 | ||||||||||||
Total debt securities | 13,188 | 331 | 368 | 13 | 13,556 | 344 | ||||||||||||||||||
Marketable equity securities | 4,135 | 460 | 44 | 48 | 4,179 | 508 | ||||||||||||||||||
Total | $ | 17,323 | $ | 791 | $ | 412 | $ | 61 | $ | 17,735 | $ | 852 | ||||||||||||
F-28
Table of Contents
F-29
Table of Contents
Note 8. | LOANS AND ALLOWANCE FOR LOAN LOSSES |
September 30, | December 31, | |||||||||||
2010 | 2009 | 2008 | ||||||||||
(Unaudited) | ||||||||||||
(In thousands) | ||||||||||||
Real estate loans: | ||||||||||||
Residential | $ | 738,732 | $ | 754,838 | $ | 746,041 | ||||||
Commercial | 453,627 | 426,028 | 351,474 | |||||||||
Construction | 69,874 | 71,078 | 89,099 | |||||||||
Total real estate loans | 1,262,233 | 1,251,944 | 1,186,614 | |||||||||
Commercial business loans | 133,448 | 113,240 | 106,684 | |||||||||
Installment loans | 4,487 | 5,783 | 7,704 | |||||||||
Collateral loans | 1,893 | 1,959 | 1,925 | |||||||||
Total loans | 1,402,061 | 1,372,926 | 1,302,927 | |||||||||
Net deferred loan costs and premiums | 549 | 632 | 1,417 | |||||||||
Allowance for loan losses | (14,094 | ) | (12,539 | ) | (12,553 | ) | ||||||
Loans — net | $ | 1,388,516 | $ | 1,361,019 | $ | 1,291,791 | ||||||
F-30
Table of Contents
At or for the Nine | ||||||||||||||||||||
Months Ended | ||||||||||||||||||||
September 30, | At or for the Years Ended December 31, | |||||||||||||||||||
2010 | 2009 | 2009 | 2008 | 2007 | ||||||||||||||||
(Unaudited) | ||||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Recorded investment in impaired loans for which there is a related allowance for loan losses | $ | 4,174 | $ | 2,787 | $ | 5,854 | $ | 2,840 | $ | 489 | ||||||||||
Recorded investment in impaired loans for which there is no related allowance for loan losses | 7,405 | 12,729 | 6,192 | 7,595 | 1,080 | |||||||||||||||
Total impaired loans | $ | 11,579 | $ | 15,516 | $ | 12,046 | $ | 10,435 | $ | 1,569 | ||||||||||
Valuation allowance related to impaired loans | $ | 873 | $ | 885 | $ | 381 | $ | 473 | $ | 155 | ||||||||||
Average recorded investment in impaired loans | $ | 13,507 | $ | 14,767 | $ | 13,356 | $ | 5,358 | $ | 1,493 | ||||||||||
Interest income recognized on impaired loans on a cash basis | $ | 205 | $ | 238 | $ | 250 | $ | 508 | $ | 52 |
For the Nine Months | For the Years Ended | |||||||||||||||||||
Ended September 30, | December 31, | |||||||||||||||||||
2010 | 2009 | 2009 | 2008 | 2007 | ||||||||||||||||
(Unaudited) | ||||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Balance, beginning of period | $ | 12,539 | $ | 12,553 | $ | 12,553 | $ | 10,620 | $ | 9,827 | ||||||||||
Provision for loan losses | 3,114 | 1,303 | 1,961 | 2,393 | 749 | |||||||||||||||
Loans charged-off | (1,594 | ) | (1,378 | ) | (2,113 | ) | (621 | ) | (173 | ) | ||||||||||
Recoveries of loans previously charged-off | 35 | 132 | 138 | 161 | 217 | |||||||||||||||
Balance, end of period | $ | 14,094 | $ | 12,610 | $ | 12,539 | $ | 12,553 | $ | 10,620 | ||||||||||
F-31
Table of Contents
For the Nine | ||||||||||||
Months | ||||||||||||
Ended | For the Years Ended | |||||||||||
September 30, | December 31, | |||||||||||
2010 | 2009 | 2008 | ||||||||||
(Unaudited) | ||||||||||||
(In thousands) | ||||||||||||
Balance, beginning of period | $ | 3,719 | $ | 4,050 | $ | 3,808 | ||||||
Loans to related parties who terminated service during the period | — | (261 | ) | — | ||||||||
Addition of related parties during the period | 96 | — | — | |||||||||
Additional loans and advances | 457 | 868 | 3,026 | |||||||||
Repayments | (511 | ) | (938 | ) | (2,784 | ) | ||||||
Balance, end of period | $ | 3,761 | $ | 3,719 | $ | 4,050 | ||||||
F-32
Table of Contents
For the Nine | ||||||||
Months | For the Year | |||||||
Ended | Ended | |||||||
September 30, | December 31, | |||||||
2010 | 2009 | |||||||
(Unaudited) | ||||||||
(In thousands) | ||||||||
Mortgage servicing rights: | ||||||||
Balance at beginning of period | $ | 475 | $ | 68 | ||||
Additions | 333 | 446 | ||||||
Disposals | — | — | ||||||
Amortization | 70 | 39 | ||||||
Balance at end of period | 738 | 475 | ||||||
Valuation Allowance: | ||||||||
Balance at beginning of period | — | — | ||||||
Additions | 61 | |||||||
Balance at end of period | 61 | — | ||||||
Mortgage servicing rights, net | $ | 677 | $ | 475 | ||||
Fair value of mortgage servicing assets at end of period | $ | 677 | $ | 481 | ||||
Note 9. | OTHER REAL ESTATE OWNED |
Note 10. | PREMISES AND EQUIPMENT |
September 30, | December 31, | Estimated | ||||||||||||||
2010 | 2009 | 2008 | Useful Lives | |||||||||||||
(In thousands) | (Unaudited) | |||||||||||||||
Land and improvements | $ | 440 | $ | 236 | $ | 236 | N/A | |||||||||
Buildings | 15,377 | 15,675 | 15,029 | 39.5 years | ||||||||||||
Furniture and equipment | 9,234 | 9,483 | 9,199 | 3 -10 years | ||||||||||||
Leasehold improvements | 3,824 | 3,762 | 3,750 | 5 -10 years | ||||||||||||
28,875 | 29,156 | 28,214 | ||||||||||||||
Accumulated depreciation and amortization | (13,889 | ) | (13,293 | ) | (11,809 | ) | ||||||||||
$ | 14,986 | $ | 15,863 | $ | 16,405 | |||||||||||
F-33
Table of Contents
Note 11. | DEPOSITS |
September 30, | December 31, | |||||||||||
2010 | 2009 | 2008 | ||||||||||
(In thousands) | (Unaudited) | |||||||||||
Demand and NOW | $ | 277,984 | $ | 258,583 | $ | 203,056 | ||||||
Regular savings | 157,893 | 143,601 | 121,527 | |||||||||
Money market and investment savings | 231,999 | 234,737 | 188,110 | |||||||||
Club accounts | 1,123 | 247 | 227 | |||||||||
Time deposits | 505,979 | 491,940 | 529,588 | |||||||||
$ | 1,174,978 | $ | 1,129,108 | $ | 1,042,508 | |||||||
September 30, 2010 | December 31, 2009 | |||||||
(In thousands) | (Unaudited) | |||||||
2010 | $ | 116,813 | $ | 359,757 | ||||
2011 | 255,231 | 85,916 | ||||||
2012 | 66,098 | 19,836 | ||||||
2013 | 23,109 | 13,852 | ||||||
2014 | 11,130 | 10,978 | ||||||
Thereafter | 33,598 | 1,601 | ||||||
$ | 505,979 | $ | 491,940 | |||||
For the Nine Months | For the Years Ended | |||||||||||||||||||
Ended September 30, | December 31, | |||||||||||||||||||
2010 | 2009 | 2009 | 2008 | 2007 | ||||||||||||||||
(In thousands) | (Unaudited) | |||||||||||||||||||
Non-time deposits | $ | 1,592 | $ | 2,492 | $ | 3,101 | $ | 5,552 | $ | 4,158 | ||||||||||
Time deposits | 7,076 | 12,947 | 16,270 | 19,517 | 22,923 | |||||||||||||||
$ | 8,668 | $ | 15,439 | $ | 19,371 | $ | 25,069 | $ | 27,081 | |||||||||||
Note 12. | FEDERAL HOME LOAN BANK BORROWINGS AND STOCK |
F-34
Table of Contents
September 30, 2010 | December 31, 2009 | |||||||||||||||
Weighted | Weighted | |||||||||||||||
Average | Average | |||||||||||||||
Amount | Rate | Amount | Rate | |||||||||||||
(Dollars in thousands) | (Unaudited) | |||||||||||||||
2010 | $ | 15,000 | 4.65 | % | $ | 40,170 | 2.78 | % | ||||||||
2011 | 73,320 | 3.70 | 73,320 | 3.70 | ||||||||||||
2012 | 37,400 | 4.21 | 37,400 | 4.21 | ||||||||||||
2013 | 63,000 | 4.12 | 63,000 | 4.12 | ||||||||||||
2014 | 26,912 | 4.13 | 26,912 | 4.13 | ||||||||||||
Thereafter | 60,796 | 3.19 | 23,000 | 4.12 | ||||||||||||
$ | 276,428 | 3.84 | % | $ | 263,802 | 3.81 | % | |||||||||
December 31, | ||||||||
Interest Rate | Maturity Date | 2008 | ||||||
0.38% | January 02, 2009 | $ | 66,000 | |||||
3.80% | January 09, 2009 | 7,000 | ||||||
4.10% | July 09, 2009 | 7,000 | ||||||
4.18% | November 23, 2009 | 2,000 | ||||||
3.30% | May 27, 2010 | 5,000 | ||||||
4.28% | August 11, 2010 | 5,000 | ||||||
6.47% | September 08, 2010 | 362 | ||||||
4.95% | December 20, 2010 | 10,000 | ||||||
4.06% | December 21, 2010 | 5,000 | ||||||
3.57% | January 11, 2011 | 5,000 | ||||||
3.02% | February 15, 2011 | 5,000 | ||||||
3.78% | May 04, 2011 | 10,000 | ||||||
3.95% | June 13, 2011 | 2,320 | ||||||
3.95% | July 07, 2011 | 5,000 | ||||||
3.78% | July 18, 2011 | 5,000 | ||||||
4.52% | August 08, 2011 | 5,000 | ||||||
3.65% | September 12, 2011 | 7,000 | ||||||
4.15% | October 03, 2011 | 5,000 | ||||||
3.95% | October 03, 2011 | 7,000 | ||||||
3.42% | November 14, 2011 | 5,000 | ||||||
3.42% | November 28, 2011 | 7,000 | ||||||
3.01% | December 05, 2011 | 5,000 | ||||||
4.57% | August 20, 2012 | 8,000 | ||||||
4.09% | September 07, 2012 | 7,000 | ||||||
4.60% | October 01, 2012 | 5,000 | ||||||
3.37% | October 03, 2012 | 5,400 | ||||||
4.75% | November 23, 2012 | 2,000 |
F-35
Table of Contents
December 31, | ||||||||
Interest Rate | Maturity Date | 2008 | ||||||
4.14% | December 07, 2012 | 10,000 | ||||||
3.85% | January 11, 2013 | 5,000 | ||||||
3.59% | February 01, 2013 | 6,000 | ||||||
4.99% | May 16, 2013 | 10,000 | ||||||
3.89% | May 28, 2013 | 5,000 | ||||||
4.75% | July 05, 2013 | 5,000 | ||||||
4.37% | July 08, 2013 | 10,000 | ||||||
4.15% | November 14, 2013 | 5,000 | ||||||
3.89% | November 29, 2013 | 7,000 | ||||||
3.37% | December 05, 2013 | 10,000 | ||||||
4.78% | January 13, 2014 | 4,400 | ||||||
3.92% | March 10. 2014 | 1,600 | ||||||
4.86% | March 17, 2014 | 7,800 | ||||||
4.18% | October 14, 2014 | 5,000 | ||||||
5.05% | May 18, 2015 | 5,000 | ||||||
3.69% | September 11, 2017 | 5,000 | ||||||
4.39% | November 06, 2017 | 8,000 | ||||||
3.19% | November 30, 2017 | 5,000 | ||||||
$ | 322,882 | |||||||
Note 13. | PENSION PLANS AND OTHER POST-RETIREMENT BENEFITS: |
F-36
Table of Contents
Pension Plans | Other Post-Retirement Benefits | |||||||||||||||||||||||
Nine Months | Nine Months | |||||||||||||||||||||||
Ended | Ended | |||||||||||||||||||||||
September 30, | Years Ended December 31, | September 30, | Years Ended December 31, | |||||||||||||||||||||
2010 | 2009 | 2008 | 2010 | 2009 | 2008 | |||||||||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Change in Benefit Obligation: | ||||||||||||||||||||||||
Benefit obligation at beginning of period | $ | 21,842 | $ | 20,529 | $ | 19,045 | $ | 2,189 | $ | 1,753 | $ | 1,611 | ||||||||||||
Service cost | 623 | 904 | 1,071 | 13 | 11 | 9 | ||||||||||||||||||
Interest cost | 956 | 1,237 | 1,337 | 91 | 107 | 99 | ||||||||||||||||||
Plan participants’ contributions | — | — | — | 19 | 26 | 22 | ||||||||||||||||||
Amendments | — | 118 | — | — | (1 | ) | — | |||||||||||||||||
Actuarial (gain) loss | 2,932 | (585 | ) | 630 | 341 | 406 | 119 | |||||||||||||||||
Benefits paid | (277 | ) | (361 | ) | (1,554 | ) | (105 | ) | (113 | ) | (107 | ) | ||||||||||||
Benefit obligation at end of period | $ | 26,076 | $ | 21,842 | $ | 20,529 | $ | 2,548 | $ | 2,189 | $ | 1,753 | ||||||||||||
Change in Plan Assets: | ||||||||||||||||||||||||
Fair value of plan assets at beginning of period | $ | 17,385 | $ | 13,032 | $ | 14,388 | $ | — | $ | — | $ | — | ||||||||||||
Actual return on plan assets | 1,103 | 3,687 | (4,968 | ) | — | — | — | |||||||||||||||||
Employer contributions | 920 | 1,027 | 5,166 | 86 | 88 | 85 | ||||||||||||||||||
Plan participants’ contributions | — | — | — | 19 | 25 | 22 | ||||||||||||||||||
Benefits paid | (277 | ) | (361 | ) | (1,554 | ) | (105 | ) | (113 | ) | (107 | ) | ||||||||||||
Fair value of plan assets at end of period | $ | 19,131 | $ | 17,385 | $ | 13,032 | $ | — | $ | — | $ | — | ||||||||||||
Funded Status: | ||||||||||||||||||||||||
Funded status at end of period | $ | (6,945 | ) | $ | (4,457 | ) | $ | (7,497 | ) | $ | (2,548 | ) | $ | (2,189 | ) | $ | (1,753 | ) | ||||||
Amounts Recognized in the Consolidated Statements of Condition: | ||||||||||||||||||||||||
Accrued expenses and other liabilities | $ | (6,945 | ) | $ | (4,457 | ) | $ | (7,497 | ) | $ | (2,548 | ) | $ | (2,189 | ) | $ | (1,753 | ) | ||||||
Amounts Recognized in Accumulated Other Comprehensive Income (Loss) Consist of: | ||||||||||||||||||||||||
Prior service (credit) cost | $ | (89 | ) | $ | (116 | ) | $ | 87 | $ | 14 | $ | 28 | $ | 48 | ||||||||||
Net loss | 9,527 | 7,022 | 11,199 | 1,012 | 716 | 336 | ||||||||||||||||||
Total accumulated other | ||||||||||||||||||||||||
comprehensive loss | 9,438 | 6,906 | 11,286 | 1,026 | 744 | 384 | ||||||||||||||||||
Deferred tax asset | (3,303 | ) | (2,348 | ) | (3,837 | ) | (359 | ) | (253 | ) | (131 | ) | ||||||||||||
Net impact on accumulated other comprehensive loss | $ | 6,135 | $ | 4,558 | $ | 7,449 | $ | 667 | $ | 491 | $ | 253 | ||||||||||||
F-37
Table of Contents
Pension Plans | Other Post-Retirement Benefits | |||||||||||||||||||||||||||||||||||||||
Nine Months | Nine Months Ended | |||||||||||||||||||||||||||||||||||||||
Ended September 30, | Years Ended December 31, | September 30, | Years Ended December 31, | |||||||||||||||||||||||||||||||||||||
2010 | 2009 | 2009 | 2008 | 2007 | 2010 | 2009 | 2009 | 2008 | 2007 | |||||||||||||||||||||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||||||||||
Components of net periodic pension cost: | ||||||||||||||||||||||||||||||||||||||||
Service cost | $ | 623 | $ | 682 | $ | 904 | $ | 870 | $ | 951 | $ | 13 | $ | 8 | $ | 11 | $ | 9 | $ | 18 | ||||||||||||||||||||
Interest cost | 956 | 927 | 1,237 | 1,123 | 993 | 91 | 80 | 107 | 99 | 122 | ||||||||||||||||||||||||||||||
Expected return on plan assets | (1,095 | ) | (788 | ) | (1,050 | ) | (1,335 | ) | (1,052 | ) | — | — | — | — | — | |||||||||||||||||||||||||
Amortization of net actuarial losses | 419 | 717 | 956 | 408 | 485 | 45 | 19 | 24 | 19 | 19 | ||||||||||||||||||||||||||||||
Amortization of prior service cost | (27 | ) | 240 | 321 | 312 | 312 | 14 | 15 | 20 | 19 | 87 | |||||||||||||||||||||||||||||
Settlement charge | — | — | — | 117 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Net periodic benefit cost | 876 | 1,778 | 2,368 | 1,495 | 1,689 | 163 | 122 | 162 | 146 | 246 | ||||||||||||||||||||||||||||||
Changes in Other Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss) | ||||||||||||||||||||||||||||||||||||||||
Net loss (gain) | 2,924 | (1,017 | ) | (3,221 | ) | 7,150 | (33 | ) | 341 | 492 | 404 | 120 | (543 | ) | ||||||||||||||||||||||||||
Change in prior service cost (credit) | — | 118 | 118 | — | — | — | (1 | ) | (1 | ) | — | — | ||||||||||||||||||||||||||||
Amortization of net loss | (419 | ) | (717 | ) | (956 | ) | (408 | ) | (485 | ) | (45 | ) | (20 | ) | (24 | ) | (19 | ) | (19 | ) | ||||||||||||||||||||
Amortization of prior service cost | 27 | (240 | ) | (321 | ) | (312 | ) | (312 | ) | (14 | ) | (14 | ) | (19 | ) | (19 | ) | (87 | ) | |||||||||||||||||||||
Adjustment for change in measurement date | — | — | — | (39 | ) | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Total recognized in other comprehensive (loss) income | 2,532 | (1,856 | ) | (4,380 | ) | 6,391 | (830 | ) | 282 | 457 | 360 | 82 | (649 | ) | ||||||||||||||||||||||||||
Total recognized in net periodic benefit cost and other comprehensive income (loss) | $ | 3,409 | $ | (78 | ) | $ | (2,012 | ) | $ | 7,886 | $ | 859 | $ | 445 | $ | 579 | $ | 522 | $ | 228 | $ | (403 | ) | |||||||||||||||||
Other Post- | Other Post- | |||||||||||||||
Pension | Retirement | Pension | Retirement | |||||||||||||
Plans | Benefits | Plans | Benefits | |||||||||||||
September 30, | December 31, | |||||||||||||||
2010 | 2010 | 2009 | 2009 | |||||||||||||
(Unaudited) | ||||||||||||||||
(In thousands) | ||||||||||||||||
Net actuarial losses | $ | 418 | $ | 45 | $ | 558 | $ | 60 | ||||||||
Prior service cost (credit) | (30 | ) | 14 | (37 | ) | 18 | ||||||||||
Net amount to be recognized | $ | 388 | $ | 59 | $ | 521 | $ | 78 | ||||||||
F-38
Table of Contents
At September 30, | At December 31, | |||||
2010 | 2009 | 2008 | ||||
(Unaudited) | ||||||
Discount rate | 5.55% / 5.35%(1) | 6.00% / 5.55%(2) | 6.00% / 6.40%(3) | |||
Rate of compensation increase | 4.00% | 4.00% | 4.50% |
(1) | The discount rate was 5.55% for the Pension Plan and was 5.35% for the Supplemental and SERP plans with measurement dates of September 30, 2010 (unaudited). |
(2) | The discount rate was 6.00% for the Pension Plan and was 5.55% for the Supplemental and SERP plans with measurement dates of December 31, 2009. | |
(3) | The discount rate was 6.00% for the Pension Plan and was 6.40% for the Supplemental and SERP plans with measurement dates of December 31, 2008. |
Pension Plan | Supplemental Plans and SERPs | |||||||||||||||||||||||
September 30, | December 31, | September 30, | December 31, | |||||||||||||||||||||
2010 | 2009 | 2008 | 2010 | 2009 | 2008 | |||||||||||||||||||
(In thousands) | (Unaudited) | (Unaudited) | ||||||||||||||||||||||
Projected benefit obligation | $ | 21,725 | $ | 17,855 | $ | 16,542 | $ | 4,351 | $ | 3,987 | $ | 3,987 | ||||||||||||
Accumulated benefit obligation | 18,445 | 14,835 | 13,283 | 4,076 | 3,750 | 3,621 | ||||||||||||||||||
Fair value of plan assets | 19,131 | 17,385 | 13,032 | — | — | — |
For the Nine Months Ended September 30, | For the Years Ended December 31, | |||||||||||
2010 | 2009 | 2009 | 2008 | 2007 | ||||||||
(Unaudited) | ||||||||||||
Discount rate(1) | 6.00%/6.40% | 6.00%/6.40% | 6.00% /6.40% | 6.30%/6.20% | 6.00% | |||||||
Expected long-term rate of return on plan assets | 8.25% | 8.25% | 8.25% | 8.25% | 8.25% | |||||||
Rate of compensation increase | 4.00% | 4.50% | 4.50% | 4.50% | 4.25% |
(1) | The discount rate was 6.00% for the Pension Plan and was 6.40% for the Supplemental and SERP plans with measurement dates of September 30, 2010 (unaudited). The discount rate was 6.00% for the Pension Plan and 6.40% for the supplemental and SERP plans with measurement dates of December 31, 2009. |
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1% | 1% | |||||||
Increase | Decrease | |||||||
Effect on post-retirement benefit obligation | $ | 268 | $ | (261 | ) | |||
Effect on total service and interest | $ | 13 | $ | (11 | ) |
September 30, 2010 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Fair Value | |||||||||||||
(In thousands) | (Unaudited) | |||||||||||||||
Asset Category | ||||||||||||||||
Domestic equity funds | $ | 9,921 | $ | — | $ | — | $ | 9,921 | ||||||||
International equity funds | 1,917 | — | — | 1,917 | ||||||||||||
Fixed income funds | 191 | — | — | 191 | ||||||||||||
Domestic bond funds | 5,195 | — | — | 5,195 | ||||||||||||
International bond funds | 964 | — | — | 964 | ||||||||||||
Real estate REIT index funds | 943 | — | — | 943 | ||||||||||||
Total | $ | 19,131 | $ | — | $ | — | $ | 19,131 | ||||||||
December 31, 2009 | ||||||||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | Fair Value | ||||||||||||
Asset Category | ||||||||||||||||
Domestic equity funds | $ | 8,997 | $ | — | $ | — | $ | 8,997 | ||||||||
International equity funds | 1,746 | — | — | 1,746 | ||||||||||||
Fixed income funds | 187 | — | — | 187 | ||||||||||||
Domestic bond funds | 4,732 | — | — | 4,732 | ||||||||||||
International bond funds | 873 | — | — | 873 | ||||||||||||
Real estate REIT index funds | 850 | — | — | 850 | ||||||||||||
Total | $ | 17,385 | $ | — | $ | — | $ | 17,385 | ||||||||
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Other Post- | ||||||||
Years Ending | Pension | Retirement | ||||||
December 31, | Plans | Benefits | ||||||
(In thousands) | ||||||||
2010 | $ | 628 | $ | 116 | ||||
2011 | 841 | 124 | ||||||
2012 | 987 | 131 | ||||||
2013 | 1,030 | 140 | ||||||
2014 | 1,056 | 148 | ||||||
2015-2019 | 6,674 | 812 |
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Note 14. | SHARE-BASED COMPENSATION |
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Weighted | ||||||||||||||||
Weighted | Average | |||||||||||||||
Average | Remaining | Aggregate | ||||||||||||||
Stock | Exercise | Contractual | Intrinsic | |||||||||||||
Options | Price | Term | Value | |||||||||||||
(In years) | (In thousands) | |||||||||||||||
Stock options outstanding at December 31, 2008 | 342,125 | $ | 14.74 | |||||||||||||
Granted | 126,250 | 9.24 | ||||||||||||||
Exercised | — | — | ||||||||||||||
Forfeited or expired | (22,500 | ) | 14.70 | |||||||||||||
Stock options outstanding at December 31, 2009 | 445,875 | $ | 13.18 | 8.0 | $ | 159 | ||||||||||
Stock options vested and exercisable at December 31, 2009 | 330,240 | $ | 14.04 | 7.6 | $ | — | ||||||||||
Stock options outstanding at December 31, 2009 | 445,875 | $ | 13.18 | 8.0 | $ | 159 | ||||||||||
Granted (unaudited) | — | — | ||||||||||||||
Exercised (unaudited) | — | — | ||||||||||||||
Forfeited or expired (unaudited) | — | — | ||||||||||||||
Stock options outstanding at September 30, 2010 (unaudited) | 445,875 | $ | 13.18 | 6.9 | $ | 284 | ||||||||||
Stock options vested and exercisable at September 30, 2010 (unaudited) | 369,055 | $ | 13.73 | 6.7 | $ | — | ||||||||||
Weighted Average | ||||||||
Number of | Grant Date | |||||||
Shares | Fair Value | |||||||
Unvested as of December 31, 2008 | 86,300 | $ | 3.07 | |||||
Granted | 126,250 | 3.05 | ||||||
Vested | (86,415 | ) | 3.05 | |||||
Forfeited, expired or canceled | (10,500 | ) | 3.30 | |||||
Unvested as of December 31, 2009 | 115,635 | 3.04 | ||||||
Granted (unaudited) | — | — | ||||||
Vested (unaudited) | 38,815 | 3.07 | ||||||
Forfeited, expired or canceled (unaudited) | — | — | ||||||
Unvested as of September 30, 2010 (unaudited) | 76,820 | $ | 3.02 | |||||
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Years Ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Weighted per share average fair value | $ | 3.05 | $ | 2.72 | $ | 4.08 | ||||||
Assumptions: | ||||||||||||
Risk-free interest rate | 2.23 | % | 3.24 | % | 4.60 | % | ||||||
Expected volatility | 39.85 | % | 22.11 | % | 19.06 | % | ||||||
Expected dividend yield | 2.16 | % | 1.67 | % | 0.84 | % | ||||||
Expected life of options granted | 6.0 years | 6.0 years | 6.5 years |
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Option Outstanding | Exercisable Options | |||||||||||||||
Weighted | ||||||||||||||||
Weighted | Average | Weighted | ||||||||||||||
Average | Remaining | Average | ||||||||||||||
Exercise | Contractual | Exercise | ||||||||||||||
Prices | Shares | Life | Shares | Prices | ||||||||||||
(In years) | ||||||||||||||||
September 30, 2010 (Unaudited) | ||||||||||||||||
$ 9.24 | 126,250 | 8.5 | 81,580 | $ | 9.24 | |||||||||||
11.98 | 121,125 | 7.4 | 94,875 | 11.98 | ||||||||||||
14.35 | 78,000 | 7.0 | 72,100 | 14.35 | ||||||||||||
17.77 | 120,500 | 6.2 | 120,500 | 17.77 | ||||||||||||
December 31, 2009 | ||||||||||||||||
$ 9.24 | 126,250 | 9.3 | 63,890 | $ | 9.24 | |||||||||||
11.98 | 121,125 | 8.2 | 79,650 | 11.98 | ||||||||||||
14.35 | 78,000 | 7.7 | 66,200 | 14.35 | ||||||||||||
17.77 | 120,500 | 7.0 | 120,500 | 17.77 |
Weighted Average | ||||||||
Number of | Grant Date | |||||||
Shares | Fair Value | |||||||
Unvested as of December 31, 2008 | 67,580 | $ | 15.23 | |||||
Granted | 16,427 | 9.24 | ||||||
Vested | (33,112 | ) | 14.93 | |||||
Forfeited, expired or canceled | (9,200 | ) | 13.57 | |||||
Unvested as of December 31, 2009 | 41,695 | $ | 13.47 | |||||
Granted (unaudited) | — | — | ||||||
Vested (unaudited) | (9,950 | ) | 12.50 | |||||
Forfeited, expired or canceled (unaudited) | — | — | ||||||
Unvested as of September 30, 2010 (unaudited) | 31,745 | $ | 13.78 | |||||
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Note 15. | INCOME TAXES |
For the Nine Months | For the Years Ended | |||||||||||||||||||
Ended September 30, | December 31, | |||||||||||||||||||
2010 | 2009 | 2009 | 2008 | 2007 | ||||||||||||||||
(Unaudited) | ||||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Current | $ | 5,765 | $ | 4,063 | $ | 6,177 | $ | 4,572 | $ | 3,576 | ||||||||||
Deferred | (451 | ) | (631 | ) | (1,242 | ) | (5,528 | ) | 540 | |||||||||||
Total income tax expense (benefit) | $ | 5,314 | $ | 3,432 | $ | 4,935 | $ | (956 | ) | $ | 4,116 | |||||||||
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September 30, | December 31, | |||||||||||
2010 | 2009 | 2008 | ||||||||||
(Unaudited) | ||||||||||||
(In thousands) | ||||||||||||
Deferred tax assets: | ||||||||||||
Allowance for loan losses | $ | 4,938 | $ | 4,389 | $ | 4,268 | ||||||
Investment security losses | 4,939 | 5,127 | 5,288 | |||||||||
Pension and post-retirement liabilities | 2,313 | 2,433 | 3,194 | |||||||||
Stock incentive award plan | 510 | 471 | 352 | |||||||||
Other | 271 | 606 | 465 | |||||||||
Gross deferred tax assets | 12,971 | 13,026 | 13,567 | |||||||||
Deferred tax liabilities: | ||||||||||||
Unrealized gains on securities | (2,329 | ) | (2,129 | ) | (1,859 | ) | ||||||
Other | — | (289 | ) | (232 | ) | |||||||
Gross deferred tax liabilities | (2,329 | ) | (2,418 | ) | (2,091 | ) | ||||||
Net deferred tax asset | $ | 10,642 | $ | 10,608 | $ | 11,476 | ||||||
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For the Nine Months | For the Year Ended | |||||||||||||||||||
Ended September 30, | December 31, | |||||||||||||||||||
2010 | 2009 | 2009 | 2008 | 2007 | ||||||||||||||||
(In thousands) | (Unaudited) | |||||||||||||||||||
Provision for income tax at statutory rate | $ | 5,212 | $ | 3,598 | $ | 4,986 | $ | (865 | ) | $ | 4,230 | |||||||||
Increase (decrease) resulting from: | ||||||||||||||||||||
State tax | 78 | — | — | — | — | |||||||||||||||
Increase in cash surrender value of bank-owned life insurance | (114 | ) | (96 | ) | (126 | ) | (130 | ) | (125 | ) | ||||||||||
Dividend received deduction | (65 | ) | (58 | ) | (76 | ) | (234 | ) | (67 | ) | ||||||||||
Tax exempt interest and disallowed interest expense | (5 | ) | (8 | ) | (11 | ) | (16 | ) | (17 | ) | ||||||||||
Excess book basis of Employee Stock Ownership Plan | 5 | 2 | 40 | 42 | 84 | |||||||||||||||
Compensation deduction limit | — | — | — | 243 | — | |||||||||||||||
Other, net | 203 | (6 | ) | 122 | 4 | 11 | ||||||||||||||
Total provision for income taxes | $ | 5,314 | $ | 3,432 | $ | 4,935 | $ | (956 | ) | $ | 4,116 | |||||||||
Note 16. | COMMITMENTS AND CONTINGENCIES |
September 30, 2010 | December 31, 2009 | |||||||
(In thousands) | ||||||||
2010 | $ | 189 | $ | 787 | ||||
2011 | 790 | 772 | ||||||
2012 | 757 | 739 | ||||||
2013 | 736 | 721 | ||||||
2014 | 667 | 662 | ||||||
Thereafter | 10,102 | 10,001 | ||||||
$ | 13,241 | $ | 13,682 | |||||
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September 30, 2010 | December 31, 2009 | |||||||
(In thousands) | ||||||||
2010 | $ | 82 | $ | 327 | ||||
2011 | 327 | 327 | ||||||
2012 | 318 | 318 | ||||||
2013 | 318 | 318 | ||||||
2014 | 318 | 318 | ||||||
Thereafter | 528 | 528 | ||||||
$ | 1,891 | $ | 2,136 | |||||
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September 30, | December 31, | |||||||||||
2010 | 2009 | 2008 | ||||||||||
(In thousands) | (Unaudited) | |||||||||||
Commitments to extend credit: | ||||||||||||
Future loan commitments | $ | 88,453 | $ | 36,650 | $ | 48,743 | ||||||
Undisbursed construction loans | 66,388 | 86,492 | 93,905 | |||||||||
Undisbursed home equity lines of credit | 137,269 | 125,511 | 113,725 | |||||||||
Undisbursed commercial lines of credit | 57,572 | 57,713 | 58,605 | |||||||||
Standby letters of credit | 10,306 | 10,555 | 12,231 | |||||||||
Unused checking overdraft lines of credit | 93 | 94 | 112 | |||||||||
$ | 360,081 | $ | 317,015 | $ | 327,321 | |||||||
Note 17. | REGULATORY MATTERS |
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Minimum | ||||||||||||||||||||||||
to Be Well | ||||||||||||||||||||||||
Required | Capitalized Under | |||||||||||||||||||||||
Minimum | Prompt Corrective | |||||||||||||||||||||||
Actual | Ratios | Action Provisions | ||||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Rockville Bank: | ||||||||||||||||||||||||
September 30, 2010 (unaudited) | ||||||||||||||||||||||||
Total capital to risk weighted assets | $ | 170,220 | 13.3 | % | $ | 102,619 | 8.0 | % | $ | 128,274 | 10.0 | % | ||||||||||||
Tier 1 capital to risk weighted assets | 155,439 | 12.1 | 51,300 | 4.0 | 76,950 | 6.0 | ||||||||||||||||||
Tier 1 capital to average assets | 155,439 | 9.7 | 64,231 | 4.0 | 80,289 | 5.0 | ||||||||||||||||||
December 31, 2009 | ||||||||||||||||||||||||
Total capital to risk weighted assets | $ | 158,870 | 13.1 | % | $ | 96,976 | 8.0 | % | $ | 121,220 | 10.0 | % | ||||||||||||
Tier 1 capital to risk weighted assets | 145,654 | 12.0 | 48,488 | 4.0 | 72,732 | 6.0 | ||||||||||||||||||
Tier 1 capital to average assets | 145,654 | 9.3 | 62,478 | 4.0 | 78,097 | 5.0 | ||||||||||||||||||
December 31, 2008 | ||||||||||||||||||||||||
Total capital to risk weighted assets | $ | 147,898 | 12.8 | % | $ | 92,436 | 8.0 | % | $ | 115,545 | 10.0 | % | ||||||||||||
Tier 1 capital to risk weighted assets | 134,621 | 11.7 | 46,024 | 4.0 | 69,036 | 6.0 | ||||||||||||||||||
Tier 1 capital to average assets | 134,621 | 8.8 | 61,191 | 4.0 | 76,489 | 5.0 | ||||||||||||||||||
Rockville Financial, Inc: | ||||||||||||||||||||||||
September 30, 2010 (unaudited) | ||||||||||||||||||||||||
Total capital to risk weighted assets | $ | 179,135 | 14.0 | % | $ | 102,656 | 8.0 | % | N/A | N/A | ||||||||||||||
Tier 1 capital to risk weighted assets | 164,354 | 12.8 | 51,321 | 4.0 | N/A | N/A | ||||||||||||||||||
Tier 1 capital to average assets | 164,354 | 10.0 | 65,545 | 4.0 | N/A | N/A |
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Minimum | ||||||||||||||||||||||||
to Be Well | ||||||||||||||||||||||||
Required | Capitalized Under | |||||||||||||||||||||||
Minimum | Prompt Corrective | |||||||||||||||||||||||
Actual | Ratios | Action Provisions | ||||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
December 31, 2009 | ||||||||||||||||||||||||
Total capital to risk weighted assets | $ | 170,559 | 14.1 | % | $ | 96,978 | 8.0 | % | N/A | N/A | ||||||||||||||
Tier 1 capital to risk weighted assets | 157,343 | 13.0 | 48,489 | 4.0 | N/A | N/A | ||||||||||||||||||
Tier 1 capital to average assets | 157,343 | 10.1 | 62,028 | 4.0 | N/A | N/A | ||||||||||||||||||
December 31, 2008 | ||||||||||||||||||||||||
Total capital to risk weighted assets | $ | 162,068 | 14.2 | % | $ | 91,306 | 8.0 | % | $ | 114,132 | 10.0 | % | ||||||||||||
Tier 1 capital to risk weighted assets | 148,791 | 12.9 | 46,137 | 4.0 | 69,205 | 6.0 | ||||||||||||||||||
Tier 1 capital to average assets | 148,791 | 10.4 | 57,227 | 4.0 | 71,534 | 5.0 |
Note 18. | ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME |
Cumulative | ||||||||||||||||
Effect | ||||||||||||||||
Unrealized | Adjustment | |||||||||||||||
Gains on | of a | Accumulated | ||||||||||||||
Minimum | Available- | Change in | Other | |||||||||||||
Pension | for-Sale | Accounting | Comprehensive | |||||||||||||
Liability | Securities | Principle(1) | (Loss) Income | |||||||||||||
(In thousands) | ||||||||||||||||
December 31, 2006 | $ | (4,406 | ) | $ | 2,738 | $ | — | $ | (1,668 | ) | ||||||
Change | 976 | 451 | — | 1,427 | ||||||||||||
December 31, 2007 | (3,430 | ) | 3,189 | — | (241 | ) | ||||||||||
Change | (4,272 | ) | 420 | — | (3,852 | ) | ||||||||||
December 31, 2008 | (7,702 | ) | 3,609 | — | (4,093 | ) | ||||||||||
Change | 2,653 | 1,441 | (1,034 | ) | 3,060 | |||||||||||
December 31, 2009 | (5,049 | ) | 5,050 | (1,034 | ) | (1,033 | ) | |||||||||
Change | 293 | 308 | — | 601 | ||||||||||||
September 30, 2010 (unaudited) | $ | (4,756 | ) | $ | 5,358 | $ | (1,034 | ) | $ | (432 | ) | |||||
(1) | The effect of the adoption of FSPFAS 115-2 (ASC 320) |
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For the Nine Months Ended September 30, | For the Years Ended December 31, | |||||||||||||||||||
2010 | 2009 | 2009 | 2008 | 2007 | ||||||||||||||||
(In thousands) | (Unaudited) | |||||||||||||||||||
Net income (loss) as reported | $ | 9,577 | $ | 6,850 | $ | 9,732 | $ | (1,587 | ) | $ | 8,328 | |||||||||
Unrealized gain on securities available for sale | 567 | 2,262 | 2,184 | 637 | 684 | |||||||||||||||
Income tax provision expense | (259 | ) | (769 | ) | (743 | ) | (217 | ) | (233 | ) | ||||||||||
Net unrealized gain on securities available for sale | 308 | 1,493 | 1,441 | 420 | 451 | |||||||||||||||
Benefit plans amortization | 450 | 991 | 4,019 | (6,474 | ) | 1,479 | ||||||||||||||
Income tax provision (expense) benefit | (157 | ) | (337 | ) | (1,366 | ) | 2,202 | (503 | ) | |||||||||||
Net benefit plans amortization | 293 | 654 | 2,653 | (4,272 | ) | 976 | ||||||||||||||
Other comprehensive income (loss), net of tax | 601 | 2,147 | 4,094 | (3,852 | ) | 1,427 | ||||||||||||||
Total comprehensive income (loss) | $ | 10,178 | $ | 8,997 | $ | 13,826 | $ | (5,439 | ) | $ | 9,755 | |||||||||
Note 19. | PARENT COMPANY FINANCIAL INFORMATION |
September 30, | December 31, | |||||||||||
2010 | 2009 | 2008 | ||||||||||
(In thousands) | (Unaudited) | |||||||||||
Assets: | ||||||||||||
Cash and due from banks | $ | 1,125 | $ | 5,129 | $ | 7,386 | ||||||
Accrued interest receivable | — | 1 | 5 | |||||||||
Deferred taxasset-net | 25 | 23 | 18 | |||||||||
Investment in Rockville Bank | 156,224 | 145,739 | 131,604 | |||||||||
Due from Rockville Bank | 5,892 | 5,002 | 4,298 | |||||||||
Other assets | 2,066 | 1,724 | 2,634 | |||||||||
Total Assets | $ | 165,332 | $ | 157,618 | $ | 145,945 | ||||||
Liabilities and Stockholders’ Equity: | ||||||||||||
Accrued expenses and other liabilities | $ | 193 | $ | 190 | $ | 168 | ||||||
Stockholders’ equity | 165,139 | 157,428 | 145,777 | |||||||||
Total Liabilities and Stockholders’ Equity | $ | 165,332 | $ | 157,618 | $ | 145,945 | ||||||
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For the Nine Months | ||||||||||||||||||||
Ended September 30, | For the Years Ended December 31, | |||||||||||||||||||
2010 | 2009 | 2009 | 2008 | 2007 | ||||||||||||||||
(In thousands) | (Unaudited) | |||||||||||||||||||
Interest and dividend income: | ||||||||||||||||||||
Interest on investments | $ | 12 | $ | 40 | $ | 46 | $ | 224 | $ | 384 | ||||||||||
Net interest income | 12 | 40 | 46 | 224 | 384 | |||||||||||||||
Non-interest expenses: | ||||||||||||||||||||
General and administrative | 378 | 384 | 512 | 568 | 628 | |||||||||||||||
Total non-interest expense | 378 | 384 | 512 | 568 | 628 | |||||||||||||||
Loss before tax benefit (provision) and equity in undistributed net income (loss) of Rockville Bank | (366 | ) | (344 | ) | (466 | ) | (344 | ) | (244 | ) | ||||||||||
Income tax benefit (provision) | 59 | 116 | 157 | 116 | 82 | |||||||||||||||
Loss before equity in undistributed net income (loss) of Rockville Bank | (307 | ) | (228 | ) | (309 | ) | (228 | ) | (162 | ) | ||||||||||
Equity in undistributed net income (loss) of Rockville Bank | 9,884 | 7,078 | 10,041 | (1,359 | ) | 8,490 | ||||||||||||||
Net income (loss) | $ | 9,577 | $ | 6,850 | $ | 9,732 | $ | (1,587 | ) | $ | 8,328 | |||||||||
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For the Nine Months | ||||||||||||||||||||
Ended September 30, | For the Years Ended December 31, | |||||||||||||||||||
2010 | 2009 | 2009 | 2008 | 2007 | ||||||||||||||||
(In thousands) | (Unaudited) | |||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||
Net income (loss) | $ | 9,577 | $ | 6,850 | $ | 9,732 | $ | (1,587 | ) | $ | 8,328 | |||||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||||||||||||||
Share-based compensation and ESOP expense | 956 | 1,294 | 1,755 | 2,655 | 1,855 | |||||||||||||||
Undistributed net (income) loss of Rockville Bank | (9,884 | ) | (7,078 | ) | (10,041 | ) | 1,359 | (8,490 | ) | |||||||||||
Deferred tax (benefit) expense | (2 | ) | (4 | ) | (5 | ) | 289 | 441 | ||||||||||||
Net change in: | ||||||||||||||||||||
Accrued interest receivable | 1 | 3 | 4 | 13 | 7 | |||||||||||||||
Due from Rockville Bank | (890 | ) | (1,195 | ) | (704 | ) | (1,457 | ) | (753 | ) | ||||||||||
Other assets | (342 | ) | 941 | 910 | 594 | (2,525 | ) | |||||||||||||
Accrued expenses and other liabilities | 3 | (19 | ) | 22 | 45 | 124 | ||||||||||||||
Net cash (used in) provided by operating activities | (581 | ) | 792 | 1,673 | 1,911 | (1,013 | ) | |||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||
Capital investment in Rockville Bank | — | — | �� | — | (10,000 | ) | — | |||||||||||||
Net cash used in investing activities | — | — | — | (10,000 | ) | — | ||||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||
Acquisition of common stock | — | (198 | ) | (198 | ) | (4,119 | ) | (7,175 | ) | |||||||||||
Cancellation of shares for tax withholding | (30 | ) | (34 | ) | (44 | ) | — | — | ||||||||||||
Cash dividends paid on common stock | (3,393 | ) | (2,829 | ) | (3,688 | ) | (3,691 | ) | (3,008 | ) | ||||||||||
Net cash used in financing activities | (3,423 | ) | (3,061 | ) | (3,930 | ) | (7,810 | ) | (10,183 | ) | ||||||||||
Net decrease in cash and cash equivalents | (4,004 | ) | (2,269 | ) | (2,257 | ) | (15,899 | ) | (11,196 | ) | ||||||||||
Cash and cash equivalents — beginning of period | 5,129 | 7,386 | 7,386 | 23,285 | 34,481 | |||||||||||||||
Cash and cash equivalents — end of period | $ | 1,125 | $ | 5,117 | $ | 5,129 | $ | 7,386 | $ | 23,285 | ||||||||||
Supplemental disclosures of cash flow information: | ||||||||||||||||||||
Cash paid for income taxes | $ | 6,285 | $ | 3,100 | $ | 4,401 | $ | 1,751 | $ | 2,001 |
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Note 20. | SELECTED QUARTERLY CONSOLIDATED INFORMATION (UNAUDITED) |
2010 | 2009 | 2008 | ||||||||||||||||||||||||||||||||||||||||||
September 30 | June 30, | March 31, | December 31, | September 30, | June 30, | March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||||||||||||||||||||||||||||
Interest and dividend income | 19,069 | $ | 18,620 | $ | 18,941 | $ | 18,940 | $ | 18,684 | $ | 19,114 | $ | 19,324 | $ | 19,983 | $ | 19,676 | $ | 18,940 | $ | 18,946 | |||||||||||||||||||||||
Interest expense | 5,516 | 5,461 | 5,543 | 6,517 | 7,384 | 7,813 | 8,061 | 8,568 | 8,472 | 8,727 | 9,179 | |||||||||||||||||||||||||||||||||
Net interest income | 13,553 | 13,159 | 13,398 | 12,423 | 11,300 | 11,301 | 11,263 | 11,415 | 11,204 | 10,213 | 9,767 | |||||||||||||||||||||||||||||||||
Provision for loan losses | 1,302 | 909 | 903 | 658 | 700 | 304 | 299 | 1,444 | 700 | 125 | 124 | |||||||||||||||||||||||||||||||||
Net interest income after provision for loan losses | 12,251 | 12,250 | 12,495 | 11,765 | 10,600 | 10,997 | 10,964 | 9,971 | 10,504 | 10,088 | 9,643 | |||||||||||||||||||||||||||||||||
Non interest income (loss)(1) | 2,746 | 2,365 | 1,687 | 1,590 | 1,809 | 2,582 | 991 | (786 | ) | (9,955 | ) | 340 | 1,414 | |||||||||||||||||||||||||||||||
Other non-interest expense | 9,876 | 9,392 | 9,635 | 8,970 | 8,842 | 9,715 | 9,104 | 7,829 | 8,233 | 8,356 | 9,344 | |||||||||||||||||||||||||||||||||
Income (loss) before income taxes | 5,121 | 5,223 | 4,547 | 4,385 | 3,567 | 3,864 | 2,851 | 1,356 | (7,684 | ) | 2,072 | 1,713 | ||||||||||||||||||||||||||||||||
Provision (benefit) for income taxes | 1,862 | 1,759 | 1,693 | 1,503 | 1,227 | 1,270 | 935 | 189 | (2,382 | ) | 679 | 558 | ||||||||||||||||||||||||||||||||
Net income (loss) | 3,259 | $ | 3,464 | $ | 2,854 | $ | 2,882 | $ | 2,340 | $ | 2,594 | $ | 1,916 | $ | 1,167 | $ | (5,302 | ) | $ | 1,393 | $ | 1,155 | ||||||||||||||||||||||
Earnings (loss) per share: | ||||||||||||||||||||||||||||||||||||||||||||
Basic and diluted | 0.18 | $ | 0.19 | $ | 0.15 | $ | 0.16 | $ | 0.13 | $ | 0.14 | $ | 0.10 | $ | 0.06 | $ | (0.29 | ) | $ | 0.08 | $ | 0.06 | ||||||||||||||||||||||
Stock price (per share): | ||||||||||||||||||||||||||||||||||||||||||||
High | 12.91 | $ | 12.64 | $ | 12.42 | $ | 11.68 | $ | 14.79 | $ | 12.50 | $ | 14.46 | $ | 15.50 | $ | 17.00 | $ | 14.50 | $ | 13.98 | |||||||||||||||||||||||
Low | 10.66 | $ | 10.50 | $ | 8.82 | $ | 9.68 | $ | 9.88 | $ | 8.44 | $ | 6.17 | $ | 8.80 | $ | 12.00 | $ | 12.51 | $ | 9.75 |
(1) | In the second quarter of 2008, non-interest income includedother-than-temporary impairment charges of $1.2 million related to preferred stock of Freddie Mac and Fannie Mae. In the third quarter of 2008, non-interest income includedother-than-temporary impairment charges of $9.8 million related to preferred stock of Freddie Mac and Fannie Mae, $1.1 million related to one pooled trust preferred security, $395,000 related to one mutual fund and $208,000 related to four common stocks. In the fourth quarter of 2008, non-interest income includedother-than-temporary impairment charges of $612,000 related to preferred stock of Freddie Mac and Fannie Mae, $191,000 related to one mutual fund and $914,000 related to eleven common stocks. In the first quarter of 2009, non-interest income included other-than temporary impairment charges of $65,000 related to one mutual fund and $292,000 related to three equity securities. In the second quarter of 2009 the Company recorded $867,000 of security gains and $289,000 of gains on the sale ofone-to-four family fixed rate residential loans. No material charges were taken in the remainder of 2009. Refer to “Note 7 — Investment Securities” for additional information onother-than-temporary impairments. |
Note 21. | SUBSEQUENT EVENT |
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Discounted Contingent Liability to Family Choice Mortgage Company | $ | 103,182 | ||
Fixed Asset Valuation as of January, 2010 | $ | 24,232 | ||
Goodwill Asset | $ | 78,950 |
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(Subject to increase to up to 17,192,500 shares)
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A CONNECTICUT CORPORATION
(Proposed new holding company for Rockville Bank)
A CONNECTICUT CORPORATION
(Current Mid-Tier Holding Company for Rockville Bank)
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25 Park Street
Rockville, Connecticut 06066
(860) 291-3600
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REGARDING THE PLAN OF CONVERSION AND REORGANIZATION
AND THE SPECIAL MEETING
Q. | WHAT ARE SHAREHOLDERS BEING ASKED TO APPROVE AT THE SPECIAL MEETING? |
A. | Existing Rockville Financial shareholders as of [shareholder record date] are being asked to vote to approve the plan of conversion pursuant to which Rockville Financial MHC will convert from the mutual to the stock form of organization. As part of the conversion, a newly formed Connecticut corporation, New Rockville Financial, is offering its common stock to eligible depositors of Rockville Bank, our tax-qualified employee stock benefit plans and the public, including shareholders of Existing Rockville Financial as of [shareholder record date]. The shares offered represent after pro forma adjustments Rockville Financial MHC’s 58.27% ownership interest in Existing Rockville Financial. Voting for approval of the plan of conversion will also include approval of the exchange ratio and the certificate of incorporation and bylaws of New Rockville Financial. |
In addition, Existing Rockville Financial shareholders are being asked to approve the adjournment of the special meeting, if necessary, to solicit additional proxies in the event that there are not sufficient votes at the time of the special meeting to approve the plan of conversion. | ||
Your vote is important. Without sufficient votes “FOR” approval of the plan of conversion, we cannot implement the plan of conversion and the related offering. | ||
Q. | WHAT ARE THE REASONS FOR THE CONVERSION AND RELATED OFFERING? | |
A. | The purpose of converting to the fully public stock form of ownership and conducting the offering at this time is to provide us with additional capital to support our continued planned growth, to take advantage of potential growth and strategic opportunities, and to successfully implement our business strategies. In addition, the conversion is a necessary and appropriate response to the changing market and regulatory conditions and will allow us to continue to compete effectively in the changing financial services marketplace. The conversion and offering also provides our employees and customers with the opportunity to share in our success through the ownership of our stock, and our shareholders will benefit from the more active and liquid trading market that will exist when Rockville Bank’s holding company is 100.0% publicly owned. | |
Although Rockville Bank is categorized as “well-capitalized” and does not require additional capital, our board of directors has determined that current opportunities for continued growth make pursuing the conversion and offering at this time desirable. As a fully converted stock holding company, we will have greater flexibility in structuring mergers and acquisitions, including the form of consideration that we can use to pay for an acquisition. Our current mutual holding company structure limits our ability to offer shares of our common stock as consideration for a merger or acquisition since Rockville Financial MHC is required to own a majority of our shares of common stock. Our ability to compete with other financial institutions for acquisition opportunities will be enhanced by our ability to offer stock or cash consideration, or a combination of stock and cash consideration in potential business transactions. Potential sellers often want stock for at least part of the purchase price. Our new stock holding company structure will enable us to offer stock or cash consideration, or a combination of stock and cash, and will therefore enhance our ability to compete with other bidders when acquisition opportunities arise. We do not currently have any agreement or understanding as to any specific acquisition. |
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Q. | WHAT WILL SHAREHOLDERS RECEIVE FOR THEIR SHARES OF EXISTING ROCKVILLE FINANCIAL? |
A. | As more fully described in “Proposal 1 — Approval of the Plan of Conversion and Reorganization — Share Exchange Ratio,” depending on the number of shares sold in the offering, each share of common stock that you own at the time of the completion of the conversion will be exchanged for between 7,913,446 shares at the minimum and 10,706,427 shares at the maximum of the offering range (or 12,312,391 at the adjusted maximum of the offering range) of New Rockville Financial common stock (cash will be paid in lieu of any fractional shares). For example, if you own 100 shares of Existing Rockville Financial common stock, and the exchange ratio is 1.1404 (at the midpoint of the offering range), after the conversion you will receive 114 shares of New Rockville Financial common stock and $0.40 in cash, the value of the fractional share, based on the $10.00 per share purchase price of stock in the offering. |
If you own shares of Existing Rockville Financial common stock in a brokerage account in “street name,” your shares will be automatically exchanged, and you do not need to take any action to exchange your shares of common stock. If you own shares in the form of Existing Rockville Financial stock certificates after the completion of the conversion and offering, our exchange agent will mail to you a transmittal form with instructions to surrender your stock certificates. New certificates of New Rockville Financial common stock will be mailed to you within business days after the exchange agent receives properly executed transmittal forms and your Existing Rockville Financial stock certificates. You should not submit a stock certificate until you receive a transmittal form. | ||
Q. | WHY WILL THE SHARES I RECEIVE BE BASED ON A PRICE OF $10.00 PER SHARE RATHER THAN THE TRADING PRICE OF THE COMMON STOCK PRIOR TO COMPLETION OF THE CONVERSION? |
A. | The $10.00 per share price was selected primarily because it is a commonly selected per share price formutual-to-stock conversion offerings. The amount of common stock New Rockville Financial will issue at $10.00 per share in the offering and the exchange is based on an independent appraisal of the estimated market value of New Rockville Financial, assuming the conversion and offering are completed. RP Financial, LC., an appraisal firm experienced in appraisal of financial institutions, has estimated that, as of November 12, 2010, this market value ranged from $189.6 million to $256.5 million, with a midpoint of $223.1 million. Based on this valuation, the number of shares of common stock of New Rockville Financial that existing public shareholders of Existing Rockville Financial will receive in exchange for their shares of Existing Rockville Financial common stock will range from 7,913,446 shares at the minimum and 10,706,427 shares at the maximum of the offering range, with a value of $79.1 million at the minimum and $107.1 million at the maximum of the offering range. If market conditions so warrant, the appraised value can be increased to $295.0 million, the adjusted maximum of the appraisal, and the number of shares issued in the exchange for existing shares of Existing Rockville Financial can be increased to 12,312,391, with a value of $123.1 million at the adjusted maximum of the offering range. The number of shares received by the existing public shareholders of Existing Rockville Financial is intended to maintain their existing ownership in our organization (excluding any new shares purchased by them in the offering and their receipt of cash in lieu of fractional exchange shares). However, pursuant to FDIC and Federal Reserve Board policies, the exchange ratio must be adjusted downward to reflect the aggregate amount of Existing Rockville Financial dividends paid to Rockville Financial MHC and the initial capitalization of Rockville Financial MHC. Dividends were paid to Rockville Financial MHC because the Federal Reserve Board’s dividend policy does not permit a mutual holding company to waive dividends declared by its subsidiary. Rockville Financial MHC had assets of $8.107 million as of September 30, 2010, not including Existing Rockville Financial common stock. The adjustments described above will decrease Existing Rockville Financial’s shareholders’ ownership interest in New Rockville Financial from 43.30% to 41.73%. |
The independent appraisal is based in part on Existing Rockville Financial’s financial condition and results of operations, the pro forma impact of the additional capital raised by the sale of shares of common stock in the offering, and an analysis of a peer group of 13 publicly traded savings bank and thrift holding |
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companies that RP Financial, LC. considered comparable to Existing Rockville Financial. RP Financial also considered the following factors, among others: | ||
• our historical, present and projected operating results and financial condition; | ||
• the economic, demographic and competition characteristics of our market area; | ||
• a comparative evaluation of our operating and financial statistics with those of other similarly-situated, publicly-traded savings and thrift holding companies; | ||
• the effect of the capital raised in this offering on our net worth and earnings potential; and | ||
• the trading market for our securities and comparable institutions and general economic conditions in the market for such securities. | ||
Q. | DOES THE EXCHANGE RATIO DEPEND ON THE TRADING PRICE OF EXISTING ROCKVILLE FINANCIAL COMMON STOCK? | |
A. | No, the exchange ratio will not be based on the market price of Existing Rockville Financial common stock. Therefore, changes in the price of Existing Rockville Financial common stock between now and the completion of the conversion and offering will not affect the calculation of the exchange ratio. | |
Q. | SHOULD I SUBMIT MY STOCK CERTIFICATES NOW? | |
A. | No. If you hold stock certificate(s), instructions for exchanging the certificates will be sent to you by our exchange agent after completion of the conversion. If your shares are held in “street name” (e.g., in a brokerage account) rather than in certificate form, the share exchange will be reflected automatically in your account upon completion of the conversion. | |
Q. | HOW DO I VOTE? |
A. | Mark your vote, sign each proxy card enclosed and return the card(s) to us, in the enclosed proxy reply envelope. If you prefer, you may vote by using the telephone or Internet. For information on submitting your proxy or voting by telephone or Internet, please refer to instructions on the enclosed proxy card.Your vote is important. Please vote promptly. |
Q. | IF MY SHARES ARE HELD IN STREET NAME, WILL MY BROKER, BANK OR OTHER NOMINEE AUTOMATICALLY VOTE ON THE PLAN ON MY BEHALF? | |
A. | No. Your broker, bank or other nominee will not be able to vote your shares without instructions from you. You should instruct your broker, bank or other nominee to vote your shares, using the directions that they provide to you. | |
Q. | WHAT HAPPENS IF I DON’T VOTE? | |
A. | Your vote is very important. Not voting all the proxy card(s) you receive will have the same effect as voting “against” the plan of conversion.Without sufficient favorable votes “for” the plan of conversion, we will not proceed with the conversion and offering. | |
Q. | WHAT IF I DO NOT GIVE VOTING INSTRUCTIONS TO MY BROKER, BANK OR OTHER NOMINEE? | |
A. | Your vote is important. If you do not instruct your broker, bank or other nominee to vote your shares, the unvoted proxy will have the same effect as a vote “against” the plan of conversion. | |
Q. | MAY I PLACE AN ORDER TO PURCHASE SHARES IN THE OFFERING, IN ADDITION TO THE SHARES THAT I WILL RECEIVE IN THE EXCHANGE? | |
A. | Yes. If you would like to receive a prospectus and stock order form, you must call our Stock Information Center at 1-877- , Monday through Friday between 9:00 a.m. and 5:00 p.m., Eastern Time. The Stock Information Center is closed weekends and bank holidays. |
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Eligible depositors of Rockville Bank and our tax-qualified benefit plans have priority subscription rights allowing them to purchase common stock in a subscription offering. Shares not purchased in the subscription offering may be available for sale to the public in a community offering, as described herein. In the event orders for New Rockville Financial common stock in a community offering exceed the number of shares available for sale, shares may be allocated (to the extent shares remain available) first to cover orders of natural persons residing in Hartford, Tolland and New London Counties in Connecticut; second to cover orders of Existing Rockville Financial shareholders as of [Shareholder Record Date]; and third to cover orders of natural persons residing in Connecticut. If necessary, shares may also be offered in a syndicated community offering in order to meet the minimum sale requirements of the plan of conversion. |
Shares of common stock purchased in the offering by a shareholder and his or her associates or individuals acting in concert with the shareholder, plus any shares a shareholder and these individuals receive in the exchange for existing shares of Existing Rockville Financial common stock, may not exceed 5.0% of the total shares of common stock of New Rockville Financial to be issued and outstanding after the completion of the conversion. This limitation, however, will not require any Existing Rockville Financial shareholder to divest an exchange share or otherwise limit the amount of exchange shares to be issued to such shareholder. |
Q. | WILL THE CONVERSION HAVE ANY EFFECT ON DEPOSIT AND LOAN ACCOUNTS AT ROCKVILLE BANK? | |
A. | No. The account number, amount, interest rate and withdrawal rights of deposit accounts will remain unchanged. Deposits will continue to be federally insured by the Federal Deposit Insurance Corporation up to the legal limit. Loans and rights of borrowers will not be affected. Only shareholders of New Rockville Financial will have voting rights after the conversion and offering. |
Please note that properly completed and signed stock order forms, with full payment, must be received (not postmarked) by the Stock Information Center no later than 12:00 noon, Eastern Time on [Date 2]. |
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STOCK OWNERSHIP
AND RESULTS OF OPERATIONS
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EXISTING ROCKVILLE FINANCIAL AND NEW ROCKVILLE FINANCIAL
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Item 13. | Other Expenses of Issuance and Distribution |
Amount(1) | ||||||||
* | Legal Fees and Expenses | $ | 500,000 | |||||
* | Blue Sky | 5,000 | ||||||
* | Accounting Fees and Expenses | 355,000 | ||||||
* | Conversion Agent and Data Processing Fees | 30,000 | ||||||
* | Marketing Agent Expenses (including Legal Fees and Expenses)(1) | 155,000 | ||||||
* | Marketing Agent Fees(1) | 6,133,000 | ||||||
* | Appraisal Fees and Expenses | 115,000 | ||||||
* | Printing, Postage, Mailing and EDGAR Fees | |||||||
* | Filing Fees (Conn. Banking Commissioner, NASDAQ, FRB, FINRA and SEC) | 158,500 | ||||||
* | Connecticut Secretary of the State Franchise Taxes | 125,000 | ||||||
* | Transfer Fees and Expenses | 150,000 | ||||||
* | Business Plan Fees and Expenses | 56,500 | ||||||
* | Other | 70,000 | ||||||
* | Total | $ | 7,853,000 | |||||
* | Estimated | |
(1) | Rockville Financial New, Inc. has retained Keefe Bruyette & Woods, Inc. to assist in the sale of common stock on a best efforts basis in the offerings. Fees are estimated at the adjusted maximum of the offering range and assume that 40% of the shares are sold in the subscription and community offerings and 60% are sold in the syndicated community offering. |
Item 14. | Indemnification of Directors and Officers |
Item 15. | Recent Sales of Unregistered Securities |
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Item 16. | Exhibits and Financial Statement Schedules: |
(a) | List of Exhibits |
1 | .1 | Engagement Letters between Rockville Financial MHC, Inc., Rockville Financial, Inc. and Rockville Bank and Keefe, Bruyette & Woods, Inc.* | ||
1 | .2 | Form of Agency Agreement between Rockville Financial MHC, Inc., Rockville Financial, Inc., Rockville Bank, Rockville Financial New, Inc. and Keefe, Bruyette & Woods, Inc.* | ||
2 | .1 | Amended and Restated Plan of Conversion and Reorganization* | ||
3 | .1 | Certificate of Incorporation of Rockville Financial New, Inc.* | ||
3 | .1.1 | Amendment to Certificate of Incorporation of Rockville Financial New, Inc. dated of September 16, 2010* | ||
3 | .2 | Bylaws of Rockville Financial New, Inc.* | ||
4 | .1 | Form of Common Stock Certificate of Rockville Financial New, Inc.* | ||
5 | .1 | Opinion of Hinckley, Allen & Snyder LLP regarding legality of securities being registered* | ||
8 | .1 | Form of Tax Opinion of Hinckley, Allen & Snyder LLP* | ||
10 | .1 | Employment Agreement as amended and restated by and among Rockville Financial, Inc., Rockville Bank and William J. McGurk, effective January 1, 2009 (incorporated herein by reference to Exhibit 10.1 to the Annual Report on Rockville Financial, Inc.’s Form 10-K for the year ended December 31, 2008 filed on March 11, 2009 (File No. 000-51239)) | ||
10 | .2 | Employment Agreement as amended and restated by and among Rockville Financial, Inc., Rockville Bank and Joseph F. Jeamel, Jr., effective January 1, 2009 (incorporated herein by reference to Exhibit 10.2 to the Annual Report on Rockville Financial, Inc.’s Form 10-K for the year ended December 31, 2008 filed on March 11, 2009 (File No. 000-51239)) | ||
10 | .3 | Employment Agreement by and among Rockville Financial, Inc., Rockville Bank and Christopher E. Buchholz, effective June 7, 2006 (incorporated herein by reference to Exhibit 10.2 to the Current Report on Form 8-K filed for Rockville Financial, Inc. filed on June 13, 2006) | ||
10 | .4 | Change-in-Control and Restricted Covenant Agreement by and among Rockville Financial, Inc., Rockville Bank and John T. Lund, effective January 2, 2009 (incorporated herein by reference to Exhibit 10.3 to the Annual Report on Rockville Financial, Inc.’s Form 10-K for the year ended December 31, 2008 filed on March 11, 2009 (File No. 000-51239)) | ||
10 | .5 | Employment Agreement as amended and restated by and among Rockville Financial, Inc., Rockville Bank and Richard J. Trachimowicz, effective January 1, 2009 (incorporated herein by reference to Exhibit 10.5 to the Annual Report on Rockville Financial, Inc.’s Form 10-K for the year ended December 31, 2008 filed on March 11, 2009 (File No. 000-51239)) | ||
10 | .6 | Supplemental Savings and Retirement Plan of Rockville Bank as amended and restated effective December 31, 2007 (incorporated herein by reference to Exhibit 10.5 to the Current Report on Form 8-K filed for Rockville Financial, Inc. filed on December 18, 2007) | ||
10 | .7 | Rockville Bank Officer Incentive Compensation Plan (incorporated herein by reference to Exhibit 10.2.3 to Rockville Financial, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2005 filed on March 31, 2006) | ||
10 | .8 | Rockville Bank Supplemental Executive Retirement Agreement for Joseph F. Jeamel, Jr. effective January 27, 2004* | ||
10 | .9 | First Amendment to the Supplemental Executive Retirement Agreement for Joseph F. Jeamel, Jr. (incorporated herein by reference to Exhibit 10.7.1 to the Current Report on Form 8-K filed for Rockville Financial, Inc. filed on December 18, 2007) | ||
10 | .10 | Executive Split Dollar Life Insurance Agreement for Joseph F. Jeamel, Jr. effective October 18, 1993* | ||
10 | .11 | Rockville Bank Supplemental Executive Retirement Plan as amended and restated effective December 31, 2007 (incorporated herein by reference to Exhibit 10.9 to the Current Report on Form 8-K filed for Rockville Financial, Inc. filed on December 18, 2007) |
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10 | .12 | Rockville Financial, Inc. 2006 Stock Incentive Award Plan (incorporated herein by reference to Appendix B in the Definitive Proxy Statement on Form 14A for Rockville Financial, Inc. filed on July 3, 2006) | ||
10 | .13 | Supplemental Executive Retirement Plan for John T. Lund effective December 6, 2010* | ||
10 | .14 | Supplemental Executive Retirement Plan for Richard J. Trachimowicz effective December 6, 2010* | ||
21 | .1 | Subsidiaries of Rockville Financial New, Inc. and Rockville Bank* | ||
23 | .1 | Consent of Hinckley, Allen & Snyder LLP (contained in Opinions included as Exhibits 5.1 and 8.1) | ||
23 | .2 | Consent of Deloitte & Touche, LLP | ||
23 | .3 | Consent of Wolf & Company, P.C. | ||
23 | .4 | Consent of RP Financial, LC.* | ||
24 | Power of Attorney (set forth on signature page) | |||
99 | .1 | Appraisal Agreement between Rockville Financial MHC, Inc., Rockville Financial, Inc., Rockville Bank and RP Financial, LC.* | ||
99 | .2 | Business Plan Agreement between Rockville Bank and FinPro, Inc.* | ||
99 | .3 | Appraisal Report of RP Financial, LC.* | ||
99 | .3.1 | Appraisal Update Report of RP Financial, LC.* | ||
99 | .4 | Marketing Materials | ||
99 | .5 | Stock Order and Certification Form | ||
99 | .6 | Form of Proxy Card* | ||
99 | .7 | Letter of RP Financial, LC. regarding subscription rights* | ||
99 | .8 | Letter of RP Financial, LC. regarding liquidation accounts | ||
99 | .9 | Stock Transfer Form* |
* | Previously filed. |
(b) | Financial Statement Schedules |
Item 17. | Undertakings |
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By: | /s/ William J. McGurk |
Signatures | Title | Date | ||||
/s/ William J. McGurk William J. McGurk | President and Chief Executive Officer (Principal Executive Officer) | December 27, 2010 | ||||
/s/ John T. Lund John T. Lund | Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) | December 27, 2010 | ||||
/s/ Michael A. Bars Michael A. Bars | Director | December 27, 2010 | ||||
/s/ C. Perry Chilberg C. Perry Chilberg | Director | December 27, 2010 | ||||
/s/ David A. Engelson David A. Engelson | Director | December 27, 2010 | ||||
/s/ Pamela J. Guenard Pamela J. Guenard | Director | December 27, 2010 |
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Signatures | Title | Date | ||||
/s/ Joseph F. Jeamel, Jr. Joseph F. Jeamel, Jr. | Director | December 27, 2010 | ||||
/s/ Kristen A. Johnson Kristen A. Johnson | Director | December 27, 2010 | ||||
/s/ Raymond H. Lefurge, Jr. Raymond H. Lefurge, Jr. | Director | December 27, 2010 | ||||
/s/ Stuart E. Magdefrau Stuart E. Magdefrau | Director | December 27, 2010 | ||||
/s/ Thomas S. Mason Thomas S. Mason | Director | December 27, 2010 | ||||
/s/ Peter F. Olson Peter F. Olson | Director | December 27, 2010 | ||||
/s/ Rosemarie Novello Papa Rosemarie Novello Papa | Director | December 27, 2010 | ||||
/s/ Richard M. Tkacz Richard M. Tkacz | Director | December 27, 2010 |
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1 | .1 | Engagement Letters between Rockville Financial MHC, Inc., Rockville Financial, Inc. and Rockville Bank and Keefe, Bruyette & Woods, Inc.* | ||
1 | .2 | Form of Agency Agreement between Rockville Financial MHC, Inc., Rockville Financial, Inc., Rockville Bank, Rockville Financial New, Inc. and Keefe, Bruyette & Woods, Inc.* | ||
2 | .1 | Amended and Restated Plan of Conversion and Reorganization* | ||
3 | .1 | Certificate of Incorporation of Rockville Financial New, Inc.* | ||
3 | .1.1 | Amendment of Certificate of Incorporation of Rockville Financial New, Inc. dated as of September 16, 2010* | ||
3 | .2 | Bylaws of Rockville Financial New, Inc.* | ||
4 | .1 | Form of Common Stock Certificate of Rockville Financial New, Inc.* | ||
5 | .1 | Opinion of Hinckley, Allen & Snyder LLP regarding legality of securities being registered* | ||
8 | .1 | Form of Tax Opinion of Hinckley, Allen & Snyder LLP* | ||
10 | .1 | Employment Agreement as amended and restated by and among Rockville Financial, Inc., Rockville Bank and William J. McGurk, effective January 1, 2009 (incorporated herein by reference to Exhibit 10.1 to the Annual Report on Rockville Financial, Inc.’s Form 10-K for the year ended December 31, 2008 filed on March 11, 2009 (File No. 000-51239)) | ||
10 | .2 | Employment Agreement as amended and restated by and among Rockville Financial, Inc., Rockville Bank and Joseph F. Jeamel, Jr., effective January 1, 2009 (incorporated herein by reference to Exhibit 10.2 to the Annual Report on Rockville Financial, Inc.’s Form 10-K for the year ended December 31, 2008 filed on March 11, 2009 (File No. 000-51239)) | ||
10 | .3 | Employment Agreement by and among Rockville Financial, Inc., Rockville Bank and Christopher E. Buchholz, effective June 7, 2006 (incorporated herein by reference to Exhibit 10.2 to the Current Report on Form 8-K filed for Rockville Financial, Inc. filed on June 13, 2006) | ||
10 | .4 | Change-in-Control and Restricted Covenant Agreement by and among Rockville Financial, Inc., Rockville Bank and John T. Lund, effective January 2, 2009 (incorporated herein by reference to Exhibit 10.3 to the Annual Report on Rockville Financial, Inc.’s Form 10-K for the year ended December 31, 2008 filed on March 11, 2009 (File No. 000-51239)) | ||
10 | .5 | Employment Agreement as amended and restated by and among Rockville Financial, Inc., Rockville Bank and Richard J. Trachimowicz, effective January 1, 2009 (incorporated herein by reference to Exhibit 10.5 to the Annual Report on Rockville Financial, Inc.’s Form 10-K for the year ended December 31, 2008 filed on March 11, 2009 (File No. 000-51239)) | ||
10 | .6 | Supplemental Savings and Retirement Plan of Rockville Bank as amended and restated effective December 31, 2007 (incorporated herein by reference to Exhibit 10.5 to the Current Report on Form 8-K filed for Rockville Financial, Inc. filed on December 18, 2007) | ||
10 | .7 | Rockville Bank Officer Incentive Compensation Plan (incorporated herein by reference to Exhibit 10.2.3 to Rockville Financial, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2005 filed on March 31, 2006) | ||
10 | .8 | Rockville Bank Supplemental Executive Retirement Agreement for Joseph F. Jeamel, Jr. effective January 27, 2004* | ||
10 | .9 | First Amendment to the Supplemental Executive Retirement Agreement for Joseph F. Jeamel, Jr. (incorporated herein by reference to Exhibit 10.7.1 to the Current Report on Form 8-K filed for Rockville Financial, Inc. filed on December 18, 2007) | ||
10 | .10 | Executive Split Dollar Life Insurance Agreement for Joseph F. Jeamel, Jr. effective October 18, 1993* | ||
10 | .11 | Rockville Bank Supplemental Executive Retirement Plan as amended and restated effective December 31, 2007 (incorporated herein by reference to Exhibit 10.9 to the Current Report on Form 8-K filed for Rockville Financial, Inc. filed on December 18, 2007) | ||
10 | .12 | Rockville Financial, Inc. 2006 Stock Incentive Award Plan (incorporated herein by reference to Appendix B in the Definitive Proxy Statement on Form 14A for Rockville Financial, Inc. filed on July 3, 2006) | ||
10 | .13 | Supplemental Executive Retirement Plan for John T. Lund effective December 6, 2010* | ||
10 | .14 | Supplemental Executive Retirement Plan for Richard J. Trachmowicz effective December 6, 2010* | ||
21 | .1 | Subsidiaries of Rockville Financial New, Inc. and Rockville Bank* |
Table of Contents
23 | .1 | Consent of Hinckley, Allen & Snyder LLP (contained in Opinions included as Exhibits 5.1 and 8.1) | ||
23 | .2 | Consent of Deloitte & Touche, LLP | ||
23 | .3 | Consent of Wolf & Company, P.C. | ||
23 | .4 | Consent of RP Financial, LC.* | ||
24 | Power of Attorney (set forth on signature page) | |||
99 | .1 | Appraisal Agreement between Rockville Financial MHC, Inc., Rockville Financial, Inc., Rockville Bank and RP Financial, LC.* | ||
99 | .2 | Business Plan Agreement between Rockville Bank and FinPro, Inc.* | ||
99 | .3 | Appraisal Report of RP Financial, LC.* | ||
99 | .3.1 | Appraisal Update Report of RP Financial, LC.* | ||
99 | .4 | Marketing Materials | ||
99 | .5 | Stock Order and Certification Form | ||
99 | .6 | Form of Proxy Card* | ||
99 | .7 | Letter of RP Financial, LC. regarding subscription rights* | ||
99 | .8 | Letter of RP Financial, LC. regarding liquidation accounts | ||
99 | .9 | Stock Transfer Form* |
* | Previously filed. |