Danvers Bancorp, the holding company for Danversbank, said today that strong first quarter income was offset by $2.3 million in expenses related to the bank’s impending acquisition by People’s United Bank, as well as increased salary and benefits costs.
Danvers’ first quarter net income totaled $3.2 million, down more than 25 percent from $4.3 million in the first quarter 2010. The company’s net interest income increased $2.3 million, or 10.9 percent, during the quarter compared to the same period in 2010 – a bump the company attributed to overall growth in its loan portfolio.
Non-interest expenses increased $3.8 million, or 21.7 percent, between the quarters ended March 31, 2011 and 2010, respectively. This rise was primarily because of $2.3 million in merger-related expenses and secondarily attributed to increases in salaries and employee benefits and occupancy expense as a result of additional personnel and branches related to the overall expansion of the company’s branch network, according to a statement.
Non-performing assets rose slightly compared to the fourth quarter 2010, but fell more than 21 percent compared to the first quarter 2010. Non-performing assets totaled $15.1 million in the first quarter, $14.8 million in the fourth quarter 2010 and $19.2 million in the first quarter of 2010.
On Jan. 20, the company announced that it had entered into a merger agreement with Bridgeport, Conn.-based People’s United Bank. People’s United will acquire Danvers in a 55 percent stock and 45 percent cash merger transaction valued at approximately $493 million. The company said it anticipates that the merger will close in the second quarter of 2011.
"I’m confident that this transaction will benefit Danvers Bancorp shareholders, customers and employees," said Kevin T. Bottomley, chairman, president and CEO of Danvers Bancorp. "People’s United brings substantial resources for increased lending, additional products and services and opportunities for professional development for our employees. When coupled with our highly experienced lending staff and extensive eastern Massachusetts branch network, the combined organization will be well positioned to compete."
