DESPITE NET LOSS in 2010, LEGACY IS WELL-POSITIONED FOR FUTURE, plus, PCBs — MORE JUNK ON 1644 EAST ST., PLUS GUEST COLUMNIST BRUCE WINN
BY DAN VALENTI
The local banking scene can always be used as a thermometer of an area’s economic health, a separate question from a region’s economic development. As we can see in Berkshire County, particularly Pittsfield, the local banks are strong while economic development, as measured by a shrinking tax rate, is weak.
So what are we to make of the $4.5 million net loss reported by Legacy Banks for the fourth quarter of last year?
You Can Bank On It
According to the Banker & Tradesman website, Legacy Bancorp Inc., the holding company for Legacy Banks, has reported a net loss of $4.5 million for the quarter ended Dec. 31. Last year, it lost $3.8 in the last quarter. Overall, Legacy lost $7.9 million in 2010, up from $7.8 million the year before.”
A statement by the bank and the Banker & Tradesman coverage explains the loss in banking industry jargon. Deciphering the statement, the loss can be attributed to the ebb and flow of several contributing factors for the net loss. These are:
* Loss on the sale of securities;
* Charges on faulty investments;
* An increase in loan losses;
* Greater operating expenses;
* Lower net interest margin.
According to Banker & Tradesman, the 2010 fourth quarter and full year loss also include a charge of $1.5 million on the prepayment of approximately $34.7 million of advances from the Federal Home Loan Bank (FHLB). The total shares outstanding resulted in a book value per share and tangible book value per share of $12.92 and $11.17, respectively, at Dec. 31, 2010.
Legacy CEO Bill Dunlaevy called 2010 a “pivotal and transitional year” for Legacy. He said the year “sets the stage for improved performance and dynamic change for our company, customers, employees and community.”
In April 2010, Pat Sullivan joined Legacy as president of Legacy Bankcorp and president/CEO of Legacy Banks. Of his successor, Dunlaevy said Sullivan “put in place a profit improvement plan. He also quickly assumed the reins as chief lending officer and aggressively worked to resolve problem assets and remove risk from the balance sheet, which unfortunately overshadowed the profitability improvements.”
Are local deposits safe? Yes. Will Legacy rebound this year? It appears so. The Planet basis this judgment on interviews and talks with several Legacy officers. Also, in another sign of long-term health, Legacy Bankcorp.’s board of directors issued a five-cent dividend for each common share owned. Legacy, which grew out of the former City Savings Bank, has long been known in the area for its customer friendliness, ease of use, and wide-ranging services.
The Planet adds this personal note. We have used Legacy for both personal and business banking needs. We have invariably found the company to be responsive to the community. It’s a local bank that knows its locality. Its people, from the maintenance staff through the Rug Row, are solid. In banking, where so much of the transaction is conducted in a currency called trust, these attributes are the determinants of long-term success. The Planet believes that is where Legacy is heading.
1644 Land Deal: Is It the Monster that Never Dies?
The Planet has been in the lead in our aggressive coverage of the would-be sale of the PCB polluted property at 1644 East St. to the City of Pittsfield, ostensibly to be used as the new site of the combined DPW-Public Utilities Department.
Our coverage played a role in derailing, for the moment at least, this foolish spending of taxpayer dollars (see previous entries on The Planet to learn why this is not a good deal for the city). There are rumblings that the deal will come back from the dead, like the monster that never dies. It has been odd from the first moment, the amount of attention and “must” the city is putting behind the sale of this building and property.
Only this morning, in an appearance on “Good Morning, Pittsfield,” The Planet heard from Ward 6 councilor John Krol that the deal isn’t dead. Krol said the council, in its 8-3 vote, simply sent it back to the mayor for retooling. The implication: It is being revamped to address council concerns, and it will likely be back again in some way, shape, or form. Krol said that councilor-at-large Kevin Sherman, who did the half-hour of the radio-TV yak fest just prior to The Planet’s appearance, also believes the deal will be (and should be) back.
The Planet sees only one way that this deal makes sense, and that is if two conditions are met: (1) The city gets the property for $1 and (2) taxpayers are exempted from ANY liability for cleanup.
You can watch The Planet’s appearance on the show at the “Good Morning, Pittsfield” link at PCTV’s website.
Speaking of PCBs, a Guest Column
In the interests of furthering public discussion of the critical issue of PCBs and the lingering poison that still infects Pittsfield land, we present this column by environmentalist Bruce Winn. The column was first posted on Feb. 2 at the BEAT Blog website. GE, with its army of lobbyists and paid PR people, doesn’t need help getting its side of the story “out there.” The other side does.
Again, as always with guest columnists, the opinions and viewpoints they express rest with them. The Planet’s publishing of same does not imply endorsement of or disagreement with those views. We present these alternate views in the interests of further debate, discussion, and deliberation. You can access Winn’s website at
BY BRUCE WINN
Lately I’ve been trying to understand the motivation of those people in our community who are arguing against a cleanup of the Housatonic River and are arguing instead that GE has the correct perspective in saying that the river should be left to heal itself. I understand GE’s motivation.
Any cleanup will cost them money. They are bound as a corporation to protect the interest of their shareholders, which means they must protect their bottom line even if it means leaving their poisons in our river. But what about those in our own community who don’t want the PCBs removed from the river and who have been spending quite a bit of money to add their voices to GE’s PR campaign?
Of course it could be a simple difference of opinion. I don’t have all the answers. But if they have reason to disagree with me, one would think that they would voice their disagreement. Everything I’ve written on this topic, whether it is in this blog, on BEAT’s website, or in letters to the editor, has provided an opportunity for comment. So far, every comment has been supportive. And I do not filter comments.
The same cannot be said of those holding that the river should not be cleaned. In every case in which I wanted to express a counterpoint to their argument in their forums, they have either not provided an opportunity, or have screened my comment and kept it from appearing. Other people have told me that they have had the same experience in trying to argue logically and factually. Their questions and comments are excluded from the discussion. Apparently only the truth, or Pravda as they say in Russian, is allowed to be heard.
The major point being made by most people who disagree with me seems to be that a cleanup of PCBs would mean that trees would be taken down and the aesthetic appeal of the river would be diminished. This view is being broadcast primarily by businesses and people connected to the tourist industry. I can understand the fear that a cleanup might scare some tourists away, but let me make a few observations.
PCBs are harmful to those of us who live here and to our wildlife. We’re talking about cancer, neural disorders, thyroid disorders, and other major medical issues. Wildlife is affected even more than people, even though GE likes to tell us otherwise. In ancient Rome, Cicero stated his conviction that it is better to be than to seem – Esse quam videri. The same is true of the river. I would like the river to be healthy, not just to seem healthy. In the long run, this is better for tourism as well. We’re not fooling anybody. Everyone knows about our area’s problem with PCBs. We should be fixing this problem, not trying to pretend it doesn’t exist – especially with toxic chemicals as harmful as PCBs.
Recently I read an email being sent out to the mailing list of one of the south county tourist attractions. It warned their subscribers that any cleanup would dislodge PCBs and send them downstream to the area of this attraction.
First, this is not based on any data. Has anyone seen data saying that the cleanup in Pittsfield increased the flow of PCBs downstream? Second, this acknowledges that PCBs in the river are in fact a scary threat, but that the people who live in Pittsfield and Lenox should just learn to live with them, and not allow them to travel farther south.
Even if we were to accept this it’s-all-about-me attitude, it doesn’t really work. According to EPA, more than half the PCBs that enter Woods Pond go over the dam and continue down the river into south county and Connecticut. South county and Connecticut already have a PCB problem, and there’s plenty more PCBs where those came from. According to EPA, between Pittsfield and Woods Pond Dam in Lenox, there are between 22,000 and 118,000 pounds of PCBs in the river and between 89,000 and 460,000 pounds of PCBs in the floodplain next to the river.
So on the one hand we have people saying that if we clean the river, the view will temporarily be less pleasing to their customers. On the other hand we have people saying toxins are poisoning us and our wildlife. What am I missing? Somebody help me out here.