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Title: |
Conversion Valuation Appraisal Report |
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Date: |
2005 |
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Preview shows 32KB of 147KB total |
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$59 |
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#828999 |
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CONVERSION VALUATION APPRAISAL REPORT
Legacy Bancorp, Inc.
Pittsfield, Massachusetts
As of
June 7, 2005
Prepared By:
Keller & Company, Inc.
555 Metro Place North
Suite 524
Dublin, Ohio 43017
(614) 766-1426
KELLER & COMPANY
KELLER & COMPANY, INC.
Financial Institution Consultants
Investment and Financial Advisors
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555 Metro Place North |
614-766-1426 | |
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Suite 524 |
614-766-1459 | |
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Dublin, Ohio 43017 |
July 1, 2005
Board of Directors
Legacy Banks
99 North Street
Pittsfield, Massachusetts 01202
To the Board:
We hereby submit an independent appraisal of the pro forma market value of the to-be-issued stock of Legacy Bancorp, Inc. (Corporation), which is the holding company of Legacy Banks, Pittsfield, Massachusetts (Legacy or the Bank). Such stock is to be issued in connection with the Banks application for Approval of Conversion from a state chartered mutual savings bank to a state chartered stock savings bank. This appraisal was prepared and provided to the Bank in accordance with regulatory appraisal requirements and regulations and filed with the Massachusetts Commissioner of Banks and the Federal Deposit Insurance Corporation.
Keller & Company, Inc. is an independent, financial institution consulting firm that serves both thrift institutions and banks throughout the U.S. The firm is a full-service consulting organization, as described in more detail in Exhibit A, specializing in business and strategic plans, stock valuations, conversion and reorganization appraisals, market studies and fairness opinions for thrift institutions and banks. The firm has affirmed its independence in this transaction with the preparation of its Affidavit of Independence, a copy of which is included as Exhibit C.
Our appraisal is based on the assumption that the data provided to us by Legacy and the material provided by the independent auditors, Wolf & Company, P.C., Springfield, Massachusetts, are both accurate and complete. We did not verify the financial statements provided to us, nor did we conduct independent valuations of the Banks assets and liabilities. We have also used information from other public sources, but we cannot assure the accuracy of such material.
In the preparation of this appraisal, we held discussions with the management of Legacy, with the law firm of Lord, Bissell & Brook, LLP, Chicago, Illinois, the Banks conversion counsel, and with Wolf & Company, P.C., Springfield, Massachusetts. Further, we viewed the Banks local economy and primary market area and also reviewed the Banks most recent business plan as part of our review process.
Board of Directors
July 1, 2005
Page 2
This valuation must not be considered to be a recommendation as to the purchase of stock in the Corporation, and we can provide no guarantee or assurance that any person who purchases shares of the Corporations stock will be able to later sell such shares at a price equivalent to the price designated in this appraisal.
Our valuation can be updated as required and will give consideration to any new developments in the Banks operation that have an impact on operations or financial condition. Further, we will give consideration to any changes in general market conditions and to specific changes in the market for publicly-traded thrift institutions. Based on the material impact of any such changes on the pro forma market value of the Corporation as determined by this firm, we will make necessary adjustments to the Corporations appraised value in an appraisal update.
It is our opinion that as of June 7, 2005, the pro forma market value or appraised value of the Corporation is $89,640,000 at the midpoint, including 664,000 shares or $6,640,000 of stock issued to the Legacy Banks Foundation. The pro forma valuation range of the Corporation is from a minimum of $76,194,000 to a maximum of $103,086,000, with a maximum, as adjusted, of $118,548,900, representing an offering range, net of the Foundation, of $70,550,000 at the minimum to a maximum of $95,450,000, with a maximum, as adjusted, of $109,767,500, representing 7,055,000 shares, 9,545,000 shares and 10,976,750 shares at $10 per share at the minimum, maximum, and maximum, as adjusted, respectively.
The pro forma appraised value of Legacy Bancorp, Inc., as of June 7, 2005, is $89,640,000 at the midpoint, representing 8,964,000 shares with the midpoint offering of $83,000,000 at $10.00 per share, excluding the Foundation of $6,640,000 or 664,000 shares.
Very truly yours,
KELLER & COMPANY, INC.
CONVERSION VALUATION APPRAISAL REPORT
Legacy Bancorp, Inc.
Pittsfield, Massachusetts
As Of:
June 7, 2005
TABLE OF CONTENTS
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INTRODUCTION |
1 | |||
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I. Description of Legacy Banks |
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General |
3 | |||
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Performance Overview |
6 | |||
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Income and Expense |
8 | |||
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Yields and Costs |
12 | |||
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Interest Rate Sensitivity |
13 | |||
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Lending Activities |
15 | |||
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Nonperforming Assets |
18 | |||
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Investments |
19 | |||
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Deposit Activities |
20 | |||
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Borrowings |
20 | |||
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Subsidiaries |
21 | |||
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Office Properties |
21 | |||
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Management |
21 | |||
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II. Description of Primary Market Area |
22 | |||
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III. Comparable Group Selection |
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Introduction |
26 | |||
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General Parameters |
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Merger/Acquisition |
26 | |||
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Mutual Holding Companies |
27 | |||
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Trading Exchange |
28 | |||
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IPO Date |
28 | |||
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Geographic Location |
28 | |||
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Asset Size |
29 | |||
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Balance Sheet Parameters |
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Introduction |
30 | |||
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Cash and Investments to Assets |
30 | |||
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Mortgage-Backed Securities to Assets |
31 | |||
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One- to Four-Family Loans to Assets |
31 | |||
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Total Net Loans to Assets |
31 | |||
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Total Net Loans and Mortgage-Backed Securities to Assets |
31 | |||
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Borrowed Funds to Assets |
32 | |||
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Equity to Assets |
32 | |||
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Performance Parameters |
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Introduction |
32 | |||
TABLE OF CONTENTS (cont.)
| PAGE | ||||
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III. Comparable Group Selection (cont.) |
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Performance Parameters (cont.) |
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Return on Average Assets |
33 | |||
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Return on Average Equity |
33 | |||
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Net Interest Margin |
33 | |||
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Operating Expenses to Assets |
34 | |||
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Noninterest Income to Assets |
34 | |||
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Asset Quality Parameters |
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