Aug. 3--LENOX -- Legacy Bancorp, the parent company of Legacy Banks, has announced second quarter earnings of $914,000, an increase of 28 percent over the second quarter of 2007.

In the first six months of this year, the bank counted total net income of $1.3 million, up 9.3 percent over the first six months of 2007.

In a skittish national banking market that has largely spared local institutions, J. Williar Dunlaevy, president and CEO of Legacy, said he is pleased with the results of the past quarter.

"In spite of the difficult economic environment and the credit and banking crisis, our improved earnings, asset quality and capital position are strengths that distinguish Legacy," said Dunlaevy.

"Legacy has not participated in or invested in subprime or predatory lending," he said. "If the banking world followed fundamental community banking lending practices, there would probably not be such a severe mortgage crisis."

In July, Legacy opened a full service branch in downtown Albany.

"We have great expectations for this, our newest and 17th office," said Dunlaevy, who said the bank has received regulatory approval to open another office in Latham, N.Y., which will open late this year.

Both Legacy and Berkshire Bank have expanded into the Capital District financial services market in the past few years.

The second quarter growth this year did not quite catapult Legacy over

the $1 million mark in its total asset value: Total assets increased to $925.1 million, up $566,000, since Dec. 31, 2007.

However, the bank's overall loan portfolio grew by $29.4 million during that six-month stretch, a 4.5 percent expansion.

Commercial real estate and other loans accounted for the bulk of the lending increase, with an additional $24.2 million or 10 percent, added to the bank's portfolio.

Residential mortgages grew by $3.4 million or 1 percent of overall residential lending, since Jan. 1.

Among the residential mortgages, much of the growth was in the 30-year fixed rate loans, which the bank presently sells.

The bank's investment portfolio has increased 8.3 percent, to $12.6 million, since Jan. 1.

Cash and cash equivalents dropped nearly 70 percent, or $43.3 million, as of June 30.

During this span deposits decreased by $19.4 million, or 3.2 percent, to $591 million, which Legacy attributes to a decrease in certificates of deposit and certain money markets and savings accounts.

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Story Source: The Berkshire Eagle