Legacy Bancorp’s entrance into the greater Capital Region’s retail banking market went off without a hitch in December when it acquired five First Niagara Bank branches, but the going was less smooth at its headquarters in western Massachusetts.
The Pittsfield, Mass., parent of Legacy Banks Wednesday posted a $494,000 net loss for the fourth quarter, a 16.4 percent improvement from a year earlier. For 2007, it recorded a net income of $1.2 million, down 55.6 percent from the previous year.
A year-end restructuring initiative that included the elimination or retirement of several senior management positions was one of the most significant drags on the bank’s balance sheets. The work force reductions and executive retirements resulted in a $1.1 million severance charge during the period that ended Dec. 31.
Legacy entered this year with 14 fewer workers, marking a 7 percent reduction in it workforce. On Jan. 1, the bank holding company’s president and chief operating officer, Michael Christopher, stepped down, retiring from the business he helped create in 1999.
“It is disappointing to report a loss for the quarter and as a result, relatively weak earnings for the year. At the same time we are pleased that the company is positioned for a significantly stronger performance and growth in 2008 and beyond,” Legacy Chief Executive Officer J. Williar Dunlaevy said.
Much of Dunlaevy’s optimism comes from Legacy’s growing presence in the Capital Region, which started with a Colonie loan office in 2006. Along with the former First Niagara offices on the outskirts of the region, the bank has proposed a branch in downtown Albany.
During the quarter, Legacy’s deposits grew by 17.8 percent to $610.4 million, but most of that increase came from the First Niagara branches’ $76.6 million in deposits. The New York offices boosted the company’s total assets up 14.4 percent to $924.5 million.
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