Article

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

LEGACY: LOOKING AHEAD TO GROWTH

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.

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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.

CITY HALL: What's Ruberto's next move on DPW land deal at 1644 East?

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.

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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

http://thebeatnews.org/thoughts/2011/02/02/esse-quam-videri/#more-1513

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.

A POLLUTED WETLAND: Not a pretty site. Fish don't like PCBs either. (PHOTO BY BRUCE WINN)

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 PCB MOLECULE: Simple, elegant, and deadly to living creatures.

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.

16 Responses to “DESPITE NET LOSS in 2010, LEGACY IS WELL-POSITIONED FOR FUTURE, plus, PCBs — MORE JUNK ON 1644 EAST ST., PLUS GUEST COLUMNIST BRUCE WINN”

  1. James Beasely
    February 8, 2011 at 5:11 pm #

    legacy banks has lost $10 million in the last year. This is the epitome of fluff pieces.

    Hypocrite.

  2. Liz Arrington
    February 8, 2011 at 5:36 pm #

    Legacy Bank has taken in 2010 what in the banking industry is known as “structural losses”. The writer above is obviously not familiar with the banking industry. I am. Dan’s piece is accurate, and he did a great job of reading through the jargon of the bank statement. Mr. Beasely should be ashamed of himself.

    • James Beasely
      February 8, 2011 at 6:40 pm #

      I used to be a CFO to a bank in upstate New York. I know a thing or two about banks.

      Let me sum it up for you;

      $10 million of profits = good

      $10 million of losses = bad

      Want verification? Look at the stock price of LEGC since the bottom of the stock market in March 2009 (pre-BHLB meager announcement). The stock market has doubled and the price of LEGC stayed stagnant.

      Structural losses? Really? Dunkeavy could have managed “structural gains” if he knew anything about banking.

      Instead Dunleavy was embarrassed out of the CEO position

  3. P. Alfonso
    February 8, 2011 at 5:54 pm #

    We should thank that idiot Beasley for the way he draws the best out of this sites many fans. Gosh what a dolt. his jealousy or whatever you want to call it of valenti can be read in every line. well, mr. beaswaxl, choke on it because the people are here to stay! valenti the only one in town who has the balls and brains to singlehandely level the playing field. Got that, dunce-o?

    • James Beasely
      February 8, 2011 at 6:54 pm #

      fine. Continue your love affair with valenti. I, too, love his site and his work. But don’t be so close-minded that you can’t call out valenti when he does bad work or is wrong.

      I enjoy tremendously 99% of what Valenti writes, but to suggest Legacy Banks is healthy is ridIculous. Even when they applied for TARP funds they were asked to rescind their application instead of being outright turned down as this Treasury were concerned that the rejection would cause a stigma and cause a run on the bank that would sink the high-risk bank.

      Sure, whatever, deposits are safe thanks to the FDIC, but the bank was closer to bankruptcy than you mindless fools believe.

      I love valenti’s wok, but he is completely wrong on this one and comes across as a hypocrite for writing a fluff piece on a bank he does business with.

      P.s. Mr. Valenti, I love your work and respect you enough to tell you when you are wrong. You’ve been right on virtually everything piece of news (even when I don’t agree with your opinions), but being a former banking executive it’s insulting to read such a piece of lies, fluff, trash, etc.

  4. James Beasely
    February 8, 2011 at 6:57 pm #

    ” Will Legacy rebound this year? It appears so. The Planet basis this judgment on interviews and talks with several Legacy officers” -Valenti on why he thinks Legacy is in good shape

    Yeah, right. Because they don’t have a vested interest in PR (i.e. Lying)

  5. Paulson
    February 8, 2011 at 8:02 pm #

    Please, folks, not too harsh on Mr. Beasley. He is entitled to his opinion. There’s no need please for name calling. All I can add is that I am a happy Legacy customer. We moved to the area two years ago and ended up with Legacy after trying a couple of other options that didn’t work out the way we wanted. Scott Schiff if Legacy has been a godscend in providing financial guidance. I’m sure there are other good places to bank, I’ve heard Pitts. Co-Operative, for example. I do find the fact that shareholders (we are in that group) received a divided. Berkshire Bank will only lend strength to the position. But we do thank Mr. Beasley for his view, though we would politely disagree.

  6. GMHeller
    February 9, 2011 at 3:35 am #

    Please note that Bruce Winn’s interesting article does not include the massive amounts of PCBs, volatile organic compounds, and other toxics that got dumped for decades into Silver Lake.
    Now mixed within the lake’s deep muddy bottom, this chemical stew is continually leaching into the surrounding area’s water table, becoming part of the Housatonic River watershed.
    The reason Silver Lake’s component of PCB super-contamination is so highly significant to the total calculus here is that even in the event Woods Pond and Housatonic River floodplain are remediated, nonetheless Silver Lake, which lies upstream, will continue to recontaminate until and unless it is also given remediation — and that means actual deep dredging to the lake bottom as opposed just to ‘capping’ the surface of the mud.
    Think of Silver Lake as an open air repository of tens of thousands of pounds of PCB’s and VOC’s slowly leaching into the surrounding water, ground and atmosphere.
    (Perhaps this would account for the high incidence of endocrine system, blood, and otherwise rare Cancers in the lake’s surrounding neighborhoods.)
    Failing to clean-up Silver Lake leaves its toxic waters to re-contaminate everywhere that effluent travels downstream.

  7. GMHeller
    February 9, 2011 at 4:53 am #

    Note the neighborhoods surrounding Silver Lake that are likely impacted by underground plumes of toxic chemicals, by chemical pollution of the surrounding ground water, and by toxins carried downwind in the evaporate coming off the lake.
    (Remember that inhaled toxins, though likely trace in amount, are nonetheless carried directly into the bloodstream and over time could have cumulative effect.)
    SEE:
    http://maps.yahoo.com/index.php#mvt=m&lat=42.452902&lon=-73.238496&zoom=15&q1=silver%20lake%2C%20pittsfield%2C%20ma

  8. Bruce Winn
    February 9, 2011 at 5:57 am #

    It’s been Berkshire Environmental Action Team’s experience that Pittsfield has little interest in protecting our groundwater. I guess like PCBs, if you can’t see something, how important can it be?

  9. San Simeon
    February 9, 2011 at 7:56 am #

    Great discussion. Silver Lake. Hadn’t thought about this. @Mr. Winn: What is the science? If Pittsfield cleaned up everything but capped Silver Lake (didn’t clean it) would it affect the other wetlands and infect again? And why oh why did the city let GE off the hook? Who can answer?

    • GMHeller
      February 9, 2011 at 11:30 am #

      GE is not exactly off the hook just yet.
      The question is whether anyone wants to do battle with GE.
      The Consent Decree can indeed be modified (it’s been modified 10 times thus far), but unless one wants a big court battle, all the parties (Mass. DEP, USEPA, City of Pittsfield, State of CT, GE, etc.) have to consent to any modification and that modification then has to be approved by the federal judge overseeing the case.

  10. 'nuff said
    February 9, 2011 at 8:29 am #

    Seems that reporting the news has become the news!

    The Planet has been in the lead in our aggressive coverage of the ……………………..

    Our coverage played a role in derailing…………………..

    The Planet adds this personal note……………………….

    Dan, stop bragging and just do what you do well, dig up the dirt!

  11. Bruce Winn
    February 9, 2011 at 11:48 am #

    Hi San Simeon. Why did the city let GE off the hook? You’d have to ask the people who agreed to the consent decree behind closed doors. As for capping Silver Lake and re-contaminating the river, here’s a link to something that includes a discussion of this. Capping isn’t a solution. It’s sweeping the PCBs under the rug.
    http://www.thebeatnews.org/01/ge-video-debunked-beat/

  12. San Simeon
    February 9, 2011 at 12:38 pm #

    @ BRuce, great thanks. I was trying to find this kind of information.

  13. James Beasely
    February 9, 2011 at 4:20 pm #

    I know there will be no tears, but because of this puff piece I am officially forever done with this site. It’s the second offense (the first being the hyping of Mrs. Vincelette’s shop, which we all hope is doing well).

    I gave this site a chance based on the argument of Valenti that the Eagle delivers too many puff pieces. Good news is worthy news, but promoting a friend’s business is not news, and spinning financials of a horribly ran bank is not news.

    Alpha Mike Foxtrot.