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Danvers Bancorp, Inc. (the “Company”) (NASDAQ: DNBK), the holding company for Danversbank, today reported net income of $4.9 million for the quarter ended December 31, 2010 compared to $2.6 million for the same quarter in 2009. For the year ended December 31, 2010, net income was $18.2 million compared to $5.3 million for the same period in 2009. The combination of the acquisition of Beverly National Corporation (“Beverly”), organic growth, particularly within the loan portfolio, and the overall improvement of the Company’s net interest margin resulted in a significant increase in net interest income and, to a lesser extent, an increase in non-interest income. These increases were partially offset by increased salaries and benefits expense, occupancy, other operating expenses and provision for income taxes. Most notably, net interest income for the quarter and year ended December 31, 2010 improved by $3.4 million, or 17.9%, and $26.5 million, or 44.9%, respectively, when compared to the same periods in 2009.
Compared to the quarter ended September 30, 2010, net income increased by $703,000, or 16.9%. An increase in net interest income and non-interest income were somewhat offset by increases in the provision for loan losses, non-interest expense and income taxes between the comparable periods.
On January 20, 2011, the Company announced that it had entered into an Agreement and Plan of Merger (the “Merger Agreement”) with People’s United Financial, Inc. (“People’s United”), a Delaware corporation. Pursuant to the Merger Agreement, People’s United will acquire the Company in a 55% stock and 45% cash merger transaction valued at approximately $493 million, based on the 10-day average closing price of People’s United’s common stock for the period ended January 19, 2011.
The Merger Agreement provides that the Company will be merged with and into People’s United (the “Merger”), with People’s United continuing as the surviving corporation. Simultaneously with the effective time of the Merger, the Company’s subsidiary bank, Danversbank, will be merged with and into People’s United subsidiary bank, People’s United Bank, with People’s United Bank continuing as the surviving entity. The Company anticipates that the Merger will close in the second quarter of 2011, subject to customary closing conditions and receipt of regulatory approvals.