Danvers Bancorp, Inc. (the “Company”) (NASDAQ: DNBK), the holding company for Danversbank, today reported net income of $3.2 million for the quarter ended March 31, 2011, compared to $4.3 million for the same quarter in 2010. Increases in net interest income and non-interest income were offset by $2.3 million in expenses related to the proposed merger with People’s United Financial, Inc. (“Peoples United”) during the 2011 quarter. Also contributing to the offset in income were increased salaries and benefits expense, occupancy, other operating expenses and the provision for income taxes. Net interest income for the quarter ended March 31, 2011 improved by $2.3 million, or 10.9%, when compared to the same period in 2010.
Compared to the quarter ended December 31, 2010, net income decreased by $1.7 million, or 34.1%. Increases in net interest income and a decline in provision for loan losses and income tax expense were offset by the aforementioned merger expenses and increased salaries and benefits expense, occupancy and other operating expenses.
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, 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 approval by bank regulatory authorities and by the stockholders of the Company. People’s United’s shareholder approval is not required for the Merger.