##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
  Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)  OF THE
    SECURITIES EXCHANGE ACT OF 1934FOR THE FISCAL YEAR ENDED
    DECEMBER 31, 2009oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934FOR THE TRANSITION PERIOD
    FROM          TO   COMMISSION FILE NUMBER :
    000-51525
  LEGACY BANCORP, INC.
 (Exact name of registrant as
    specified in its charter)
  Delaware(State or other jurisdiction
    of
    incorporation or organization)

20-3135053(IRS Employer
    Identification No.)99 NORTH STREET
    PITTSFIELD, MASSACHUSETTS(Address of principal
    executive offices)

01201(Zip Code)   (413) 443-4421
 (Registrants telephone
    number, including area code)
  Securities registered pursuant to section 12(b) of the
    Act:
  Title of each class

Name of each exchange on which registeredCommon Stock ($0.01 par value per share)

NASDAQ Stock Market, LLC   Securities registered pursuant to section 12(g) of the
    Act:
 None
  o þ
  o þ
  þ o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. þ
    Large accelerated filer o

Accelerated filer þ

Non-accelerated filero
    (Do not check if a smaller reporting company)

Smaller Reporting company o   Rule 12b-2 o þ
    8,724,212.
  Documents
    Incorporated By Reference:
  Form 10-K.




---



##### 





TABLE OF
    CONTENTS
   
 PagePart IItem 1.


Business


2Item 1a.


Risk Factors


30Item 1b.


Unresolved Staff Comments


34Item 2.


Properties


35Item 3.


Legal proceedings


35Item 4.


(Removed and reserved)


35Part IIItem 5.


Market for registrants common equity,
    related stockholder matters and issuer purchases of equity
    securities


35Item 6.


Selected financial data


38Item 7.


Managements discussion and analysis of
    financial condition and results of operations


39Item 7a.


Quantitative and qualitative disclosures about
    market risk


48Item 8.


Financial statements and supplementary data


54Item 9.


Changes in and disagreements with accountants on
    accounting and financial disclosure


96Item 9a.


Controls and procedures


96Item 9b.


Other information


96Part IIIItem 10.


Directors, executive officers and corporate
    governance


97Item 11.


Executive compensation


97Item 12.


Security ownership of certain beneficial owners
    and management and related stockholder matters


97Item 13.


Certain relationships and related transactions,
    and director independence


97Item 14.


Principal accountant fees and services


98Part IVItem 15.


Exhibits and financial statement schedules


98Signatures


99EX-14.0 Code of EthicsEX-21.0 List of all subsidiaries of the RegistrantEX-23.0 Consent of Independent Registered Public Accounting FirmEX-31.1 Certification pursuant to Rule 13a-14(a)/15d-14(a) of J. Williar DunlaevyEX-31.2 Certification pursuant to Rule 13a-14(a)/15d-14(a) of Paul H. BruceEX-32 Certification pursuant to 18 U.S.C. Section 1350   1




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##### Table of Contents



Part I  Item 1.
    Business  Forward-Looking Statements:
  Financial Information:
  General:
  Market Area and Competition:
 2




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##### Table of Contents



3




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##### Table of Contents



Lending
    Activities
    At December 31,2009


2008


2007Amount


Percent


Amount


Percent


Amount


Percent(Dollars in thousands)Mortgage loans on real estate:Residential

$
285,618



43.12
%

$
344,235



49.15
%

$
349,772



53.17
%Commercial


263,910



39.85



246,374



35.18



212,191



32.26Home equity


69,625



10.51



63,138



9.01



56,752



8.63619,153



93.48



653,747



93.34



618,715



94.06Other loans:Commercial


31,373



4.74



34,242



4.89



27,664



4.20Consumer and other


11,791



1.78



12,386



1.77



11,421



1.7443,164



6.52



46,628



6.66



39,085



5.94Total loans


662,317



100.00
%


700,375



100.00
%


657,800



100.00
%Other Items:Net deferred loan costs


1,400







1,531







1,397Allowance for loan losses


(11,089
)






(6,642
)






(5,568
)Total Loans, net

$
652,628






$
695,264






$
653,629   At December 31,2006


2005Amount


Percent


Amount


Percent(Dollars in thousands)Mortgage loans on real estate:Residential

$
325,407



55.85
%

$
308,008



55.86
%Commercial


170,971



29.35



160,675



29.14Home equity


56,856



9.76



58,640



10.64553,234



94.96



527,323



95.64Other loans:Commercial


22,903



3.93



20,579



3.73Consumer and other


6,451



1.11



3,457



0.6329,354



5.04



24,036



4.36Total loans


582,588



100.00
%


551,359



100.00
%Other Items:Net deferred loan costs


891







361Allowance for loan losses


(4,677
)






(4,220
)Total Loans, net

$
578,802






$
547,500   General: one-to-four-family lines-of-credit,
 4




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##### Table of Contents



Residential Real Estate Loans:
      loan-to-value loan-to-value
    Commercial Real Estate Loans:
 5




---



##### Table of Contents



Home Equity
    Lines-of-Credit
    and Loans: lines-of-credit lines-of-credit lines-of-credit
  lines-of-credit one-to-four Wall Street Journal lines-of-credit
  Commercial Loans:
  Wall Street Journal
 6




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##### Table of Contents



Consumer and Other Loans:
  Loan Origination and Underwriting:
     7




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##### Table of Contents



For the Years Ended December 31,2009


2008


2007


2006


2005(Dollars in thousands)Loans at beginning of year

$
700,375


$
657,800


$
582,588


$
551,359


$
508,350Originations:Mortgage loans on real estate:Residential


95,427



73,660



75,047



55,223



86,247Commercial


45,408



69,618



69,375



50,239



52,321Home Equity


8,827



18,820



28,928



28,997



35,429149,662



162,098



173,350



134,459



173,997Other Loans:Commercial Business


10,914



17,365



18,932



17,330



10,832Consumer and other


1,193



1,496



3,037



2,183



1,61712,107



18,861



21,969



19,513



12,449Total loans originated


161,769



180,959



195,319



153,972



186,446Loans purchased


910



2,421



4,042



3,106



5,000Deduct:Principal loan repayments and prepayments


133,223



112,810



105,761



114,281



125,481Loan sales


66,949



27,416



18,170



11,405



22,342Charge-offs


565



579



218



163



614Total deductions


200,737



140,805



124,149



125,849



148,437Net increase (decrease) in loans


(38,058
)


42,575



75,212



31,229



43,009Loans at end of year

$
662,317


$
700,375


$
657,800


$
582,588


$
551,359          8




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##### Table of Contents



Maturity and Sensitivity of Loan
    Portfolio:
  Contractual MaturityDue Less Than


Due After One


Due AfterOne Year


to Five Years


Five Years


Total(Dollars in thousands)Commercial Real Estate Loans

$
40,482


$
152,828


$
51,903


$
245,213Commercial Construction loans


8,012



4,927



5,758



18,697Sub-total:
    Total Commercial Real Estate Loans

$
48,494


$
157,755


$
57,661


$
263,910Residential Construction Loans










4,110



4,110Total

$
48,494


$
157,755


$
61,771


$
268,020     Loan
    Quality
  General:
  Delinquent Loans:
  Other Real Estate Owned:
 9




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##### Table of Contents



Classification of Assets and Loan
    Review:
    Non-Performing Loans:
 10




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##### Table of Contents



At December 31,2009


2008


2007


2006


2005(Dollars in thousands)Non-accrual loans:Residential mortgage

$
4,822


$
1,190


$
499


$
483


$
479Commercial mortgage


13,942



5,777



539



179



96Commercial


743



410



386



132



250Home equity, consumer and other


71



172



108



85



78Total non-accrual loans


19,578



7,549



1,532



879



903Loans greater than 90 days delinquent and still
    accruing:Residential mortgage


















Commercial mortgage


















Commercial


















Home equity, consumer and other


















Total loans 90 days delinquent and still accruing


















Total non-performing loans

$
19,578


$
7,549


$
1,532


$
879


$
903Other real estate owned

$
1,195


$



$
185


$



$
Total non-performing assets

$
20,773


$
7,549


$
1,717


$
879


$
903Troubled debt restructurings

$
10,792


$



$



$
943


$
Ratios:Non-performing loans to total loans


2.96
%


1.08
%


0.23
%


0.15
%


0.16
%Non-performing assets to total assets


2.07
%


0.80
%


0.17
%


0.11
%


0.12
%   non-performing and/or
  Allowance for Loan Losses.
  sub-category:
 11




---



##### Table of Contents



non-classified
   12




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##### Table of Contents



At or for the Years Ended December 31,2009


2008


2007


2006


2005(Dollars in thousands)Balance at beginning of period

$
6,642


$
5,568


$
4,677


$
4,220


$
3,846Charge-offs:Mortgage loans on real estate:


(82
)


(121
)






(50
)


Other loans:Commercial


(265
)


(198
)


(104
)


(19
)


(506
)Consumer and other


(218
)


(260
)


(114
)


(94
)


(108
)Total other loans


(483
)


(458
)


(218
)


(113
)


(614
)Total charge-offs


(565
)


(579
)


(218
)


(163
)


(614
)Recoveries:Mortgage loans on real estate


1



89







10



Other loans:Commercial


48



15



15



316



66Consumer and other


80



84



43



61



81Total other loans


128



99



58



377



147Total recoveries


129



188



58



387



147Net recoveries (charge-offs)


(436
)


(391
)


(160
)


224



(467
)Provision for loan losses


4,883



1,465



1,051



233



841Balance at end of period

$
11,089


$
6,642


$
5,568


$
4,677


$
4,220Ratios:Net recoveries (charge-offs) to average loans
    outstanding  annualized


(0.06
)%


(0.06
)%


(0.03
)%


0.04
%


(0.09
)%Allowance for loan losses to non-performing loans at end of
    period


56.64
%


87.99
%


363.45
%


532.08
%


467.33
%Allowance for loan losses to total loans at end of period


1.67
%


0.95
%


0.85
%


0.80
%


0.77
%      13




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##### Table of Contents



At December 31,2009


2008


2007Percent of








Percent of








Percent ofLoans in








Loans in








Loans inEach








Each








EachAllowance


Loan


Category to


Allowance


Loan


Category to


Allowance


Loan


Category tofor Loan


Balances by


Total


for Loan


Balances by


Total


for Loan


Balances by


TotalLosses


Category


Loans


Losses


Category


Loans


Losses


Category


Loans(Dollars in thousands)Mortgage loans on real estate:Residential

$
1,112


$
285,618



43.12
%

$
980


$
344,235



49.15
%

$
946


$
349,772



53.17
%Commercial


8,852



263,910



39.85



4,550



246,374



35.18



3,688



212,191



32.26Home equity


359



69,625



10.51



286



63,138



9.01



245



56,752



8.6310,323



619,153



93.48



5,816



653,747



93.34



4,879



618,715



94.06Other loans:Commercial


579



31,373



4.74



632



34,242



4.89



507



27,664



4.20Consumer and other


187



11,791



1.78



194



12,386



1.77



182



11,421



1.74766



43,164



6.52



826



46,628



6.66



689



39,085



5.94Total

$
11,089


$
662,317



100.00
%

$
6,642


$
700,375



100.00
%

$
5,568


$
657,800



100.00
%   At December 31,2006


2005Percent of








Percent ofLoans in








Loans inEach








EachAllowance


Loan


Category to


Allowance


Loan


Category tofor Loan


Balances by


Total


for Loan


Balances by


TotalLosses


Category


Loans


Losses


Category


Loans(Dollars in thousands)Mortgage loans on real estate:Residential

$
892


$
325,407



55.85
%

$
881


$
308,008



55.86
%Commercial


3,015



170,971



29.35



2,779



160,675



29.14Home equity


249



56,856



9.76



168



58,640



10.644,156



553,234



94.96



3,828



527,323



95.64Other loans:Commercial


426



22,903



3.93



353



20,579



3.73Consumer and other


95



6,451



1.11



39



3,457



0.63521



29,354



5.04



392



24,036



4.36Total

$
4,677


$
582,588



100.00
%

$
4,220


$
551,359



100.00
%   Investment
    Activities
  General.
 14




---



##### Table of Contents



other-than-temporary Other-Than-Temporary
  Government Sponsored Enterprises (GSE).
  Municipal Bonds.
  Corporate Bonds and Other Obligations.
  Mortgage-Backed Securities (MBS).
  Marketable Equity Securities. other-than-temporarily
  Other Equity Securities and Investments.
 15




---



##### Table of Contents



At December 31, 2009


At December 31, 2008


At December 31, 2007Amortized


Fair


Amortized


Fair


Amortized


FairCost


Value


Cost


Value


Cost


Value(Dollars in thousands)Securities available for sale:Government-sponsored enterprises (GSE)

$
80,393


$
79,976


$
36,459


$
36,832


$
48,041


$
48,262Municipal bonds


17,521



17,875



15,876



15,632



9,930



9,941Corporate bonds and other obligations


1,321



1,351



363



363



1,501



1,531U.S. Government and GSE mortgage-backed securities


63,216



64,139



51,679



52,490



53,628



53,936Private issue mortgage-backed securities










28,588



21,496



11,923



11,790Total debt securities


162,451



163,341



132,965



126,813



125,023



125,460Common stock


3,239



4,085



6,314



5,544



8,100



9,084Total securities available for sale


165,690



167,426



139,279



132,357



133,123



134,544Securities held to maturity:Other bonds and obligations


97



97



97



97



97



97Restricted equity securities and other investments:Federal Home Loan Bank of Boston stock


10,932



10,932



10,932



10,932



10,722



10,722Savings Bank Life Insurance


1,709



1,709



1,709



1,709



1,709



1,709Real estate partnerships


4,397



4,397



7,360



7,360



4,773



4,773Other investments


155



155



184



184



209



209Total restricted equity securities and other investments


17,193



17,193



20,185



20,185



17,413



17,413Total securities

$
182,980


$
184,716


$
159,561


$
152,639


$
150,633


$
152,054  16




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##### Table of Contents



tax-exempt
  One Year or Less


More than One Year through Five Years


More than Five Years through Ten Years


More than Ten Years


Total SecuritiesWeighted





Weighted





Weighted





Weighted





WeightedAmortized


Average


Amortized


Average


Amortized


Average


Amortized


Average


Amortized


AverageCost


Yield


Cost


Yield


Cost


Yield


Cost


Yield


Cost


Yield(Dollars in thousands)Securities available for sale (AFS):Government-sponsored enterprises

$
6,605



2.58
%

$
46,033



1.84
%


13,435



2.89
%

$
14,320



4.61
%

$
80,393



2.57
%Municipal Bonds


1,719



3.13
%










3,070



4.15
%


12,732



4.23
%

$
17,521



4.11
%Corporate bonds and other obligations










821



3.41
%


500



6.35
%









$
1,321



4.52
%Subtotal


8,324







46,854







17,005







27,052







99,235GSE Mortgage-backed securities


















661



4.00
%


62,555



5.31
%


63,216



5.30
%Total AFS debt securities


8,324







46,854







17,666







89,607







162,451Securities held to maturity (HTM):Corporate bonds and other obligations










82



3.00
%










15



3.00
%


97



3.00
%Total HTM debt securities










82















15







97Total debt securities

$
8,324






$
46,936






$
17,666






$
89,622






$
162,548   Sources
    of Funds
  General.
  Deposits.
     17




---



##### Table of Contents



Years Ended December 31,2009


2008


2007Weighted








Weighted








WeightedAverage





Average


Average





Average


Average





AverageBalance


Percent


Rate


Balance


Percent


Rate


Balance


Percent


Rate(Dollars in thousands)Deposit type:Demand

$
67,155



10.6
%



%

$
60,444



10.2
%



%

$
50,465



9.5
%



%NOW deposits


43,527



6.9



0.40



41,378



7.0



0.53



35,333



6.7



0.65Money market deposits


65,602



10.3



1.04



58,052



9.8



2.36



53,523



10.1



3.66Regular savings


50,724



8.0



0.33



49,936



8.5



0.41



46,986



8.9



0.44Relationship Savings


123,297



19.5



1.29



121,990



20.6



2.10



101,798



19.3



3.88Total transaction accounts


350,305



55.3



0.75



331,800



56.1



1.30



288,105



54.5



2.20Certificates of deposit


282,730



44.7



2.99



259,439



43.9



3.88



240,571



45.5



4.78Total deposits

$
633,035



100.0
%


1.76
%

$
591,239



100.0
%


2.44
%

$
528,676



100.0
%


3.39
%     At December 31,2009


2008


2007(Dollars in thousands)Interest RateLess than 2%

$
81,282


$
25,591


$
2202.00%-2.99%


83,503



85,226



5,3513.00%-3.99%


91,122



106,784



38,7484.00%-4.99%


27,943



40,304



117,7865.00%-5.99%


5,462



11,936



111,251Total

$
289,312


$
269,841


$
273,356     Year Ending December 31,

After December 31,2010

2011

2012

2013

2013

Total(Dollars in thousands)Interest RateLess than 2%

$
69,415


$
11,266


$
601


$



$



$
81,2822.00%-2.99%


60,468



10,470



2,044



10,510



11



83,5033.00%-3.99%


40,554



16,054



7,762



18,720



8,032



91,1224.00%-4.99%


16,792



6,769



3,042



1,028



312



27,9435.00%-5.99%


3,141



1,999



322











5,462Total

$
190,370


$
46,558


$
13,771


$
30,258


$
8,355


$
289,312  18




---



##### Table of Contents



At December 31,2009(In thousands)Three months or less

$
30,923Over three months through six months


24,144Over six months through one year


20,524Over one year to three years


19,399Over three years


20,038Total

$
115,028   Borrowings.
  At or for the YearsEnded December 31,2009


2008


2007(Dollars in thousands)Balance at end of period

$
160,352


$
197,898


$
167,382Average balance during year

$
177,261


$
186,170


$
158,784Maximum outstanding at any month end

$
194,831


$
211,531


$
203,446Weighted average interest rate at end of year


3.81
%


4.07
%


4.60
%Weighted average interest rate during year


4.07
%


4.27
%


4.75
%     Personnel.
  Segment Reporting:
  Subsidiary
    Activities and Portfolio Management Services
   19




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##### Table of Contents



LB Funding Corporation.
  Legacy Insurance Services of the
    Berkshires.
  Legacy Securities Corporation.
  CSB Service Corporation.
  Portfolio Management Services.
  Regulation And
    Supervision
  General: Form 10-K
  Proposed
    Federal Legislation
   20




---



##### Table of Contents



Massachusetts
    Banking Laws and Supervision
        Lending Activities:
  Insurance Sales:
  Investment Activities:
  Dividends:
  Protection of Personal
    Information:
 21




---



##### Table of Contents



Parity Regulation: out-of-state
  Federal
    Regulations
  Capital Requirements.
        Standards for Safety and Soundness.
 22




---



##### Table of Contents



Investment Activities.
  Interstate Banking and Branching. out-of-state
  Prompt Corrective Regulatory Action.
     23




---



##### Table of Contents



Transaction with Affiliates and Regulation W of the
    Federal Reserve Regulations.
      Enforcement.
  Insurance of Deposit Accounts.
 24




---



##### Table of Contents



Temporary Liquidity Guarantee Program.
   25




---



##### Table of Contents



U.S. Treasurys Troubled Asset Relief Program
    Capital Purchase Program.
  Privacy Regulations.
  Community Reinvestment Act.
    Consumer Protection and Fair Lending
    Regulations.
 26




---



##### Table of Contents



The USA PATRIOT Act.
  Federal
    Reserve System
    Federal
    Home Loan Bank System
      Holding
    Company Regulation
  General:
   27




---



##### Table of Contents



Acquisition of the Company:
  Massachusetts Holding Company Regulation:
  Federal Securities Laws:
 28




---



##### Table of Contents



Taxation
  Federal taxes:
  Bad Debt Reserves:
  Distributions:
  Massachusetts Taxation:
    New York Taxation:
 29




---



##### Table of Contents



Delaware Taxation:
  Available Information: http://www.LegacyBanks.com. Form 10-K; Form 10-Q; Form 8-K;
  Item 1a.
    Risk
    Factors    Risks
    Related to Our Business
  The
    United States Economy Is In Recession.  A Prolonged
    Economic Downturn, Especially One Affecting Our Geographic
    Market Area, Could Materially Affect our Business and Financial
    Results.
  sub-prime
  The
    Federal Deposit Insurance Corporation actions to recapitalize
    the Deposit Insurance Fund.
     30




---



##### Table of Contents



If our
    Investment in the Federal Home Loan Bank of Boston is Classified
    as
    Other-Than-Temporarily
    Impaired or as Permanently Impaired, our Earnings and
    Stockholders Equity Would Decrease.
    The
    Federal Home Loan Bank of Boston Has Suspended Dividends. This
    Will Negatively Affect our Earnings.
    Lack
    of consumer confidence in financial institutions may decrease
    our level of deposits.
    Economic
    Conditions May Adversely Affect Our Liquidity.
    Future
    Legislative or Regulatory Actions Responding to Perceived
    Financial and Market Problems Could Impair Our Rights Against
    Borrowers.
   31




---



##### Table of Contents



Our
    Commercial Real Estate and Commercial Loans Expose Us to
    Increased Credit Risks, and These Risks Will Increase if We
    Succeed in Increasing These Types of Loans.
      Our
    Continuing Concentration of Loans in Our Primary Market Areas
    May Increase Our Risk.
    Financial
    Service Sector Concentration Within Our Investment
    Portfolio.
    Changes
    in Market Interest Rates Could Adversely Affect Our Financial
    Condition and Results of Operations.
   32




---



##### Table of Contents



We May
    Have Difficulty Meeting Our Branch Expansion Goals, and Our
    Branch Expansion Strategy May Not Be Accretive to
    Earnings.
    Our
    Ability to Grow May Be Limited if We Cannot Make
    Acquisitions.
    Strong
    Competition Within Our Market Area May Limit Our Growth and
    Profitability.
    We
    Operate in a Highly Regulated Environment and May Be Adversely
    Affected by Changes in Law and Regulations.
   33




---



##### Table of Contents



Legislative
    Proposals Have Been Introduced That Would Eliminate The
    Office Of Thrift Supervision, Legacy Bancorps Primary
    Federal Regulator, Which Would Require Legacy Bancorp To Become
    A Bank Holding Company.
    We
    could record future losses on our securities
    portfolio.
  other-than-temporary and/or
  Item 1b.
    Unresolved
    Staff Comments   34




---



##### Table of Contents



Item 2.
    Properties    Year Opened


Lease




Year Opened


LeaseOr Acquired


Expires




Or Acquired


ExpiresOwned:Main Office:99 North Street


2000Pittsfield, MA 01201Branch Offices:76 Park Street


1997






409 Stockbridge Road


2007Lee, MA 01238









Great Barrington, MA 0123025 Main Street


1958






Route 30 & Mill Lane


2007Lenox, MA 01240









Middleburgh, NY 121222 Holmes Road


1978






4 Elliott Place


2007Lenox, MA 01240









East Durham, NY 1242330 East Otis Road


1997






184 Broadway


2007Otis, MA 01253









Whitehall, NY 12887734 Williams Street (Land leased)


1997






Route 296
    Windham, NY 12496


2007Pittsfield, MA 01201331 State Road


2007






142 Main Street


2009North Adams, MA 01247









Haydenville, MA 01039Leased:609 Merrill Road


1971



2023
(1)

480 West Housatonic Street


2005



2010
(3)Pittsfield, MA 01201









Pittsfield, MA 01201700 Main Street


1975



2019
(1)

Route 32, Bryants Market


2007



2013Great Barrington, MA 01230









Greenville, NY 1208339 North Pearl Street


2008



2018
(2)

545 Troy-Schenectady Road


2009



2019Albany, NY 12207









Latham, NY 12110ATM Location Only:Lee Outlet Village


1995



2011Lee, MA 01238     (1)
    
    Legacy Banks has an option to renew for one additional
    5 year terms(2)
    
    Legacy Banks has an option to renew for two additional
    5 year terms(3)
    
    Five year option renewed in February 2010. Legacy Banks has an
    option to renew for one additional 5 year term  Item 3.
    Legal
    Proceedings    Item 4.
    (Removed
    and Reserved) Part II  Item 5.
    Market
    For Registrants Common Equity, Related Stockholder Matters
    And Issuer Purchases Of Equity Securities   35




---



##### Table of Contents



and/or
  For the Year Ended December 31, 20094th Quarter

3rd Quarter

2nd Quarter

1st QuarterHigh

$
11.07


$
13.46


$
12.10


$
11.21Low

$
9.40


$
10.50


$
9.29


$
7.90Dividend Declared

$
0.05


$
0.05


$
0.05


$
0.05   For the Year Ended December 31, 20084th Quarter

3rd Quarter

2nd Quarter

1st QuarterHigh

$
13.37


$
13.95


$
14.01


$
14.27Low

$
10.60


$
10.51


$
11.53


$
12.65Dividend Declared

$
0.05


$
0.05


$
0.05


$
0.05   Repurchase of Our Equity Securities:
  (d) Maximum Numberor Approximate(c) Total Number of

Dollar Value ofShares Purchased as

Shares that May YetPart of Publicly

Be Purchased Under(a) Total Number of

(b) Average Price

announced Plans or

the Plans orPeriod

Shares Purchased

Paid per Share

Programs

ProgramsOctober 1  31


12,300


$
10.19



12,300



391,695November 1  30


12,500


$
9.68



12,500



379,195December 1  31


7,350


$
9.68



7,350



371,845   Stock Repurchase Overview:
 36




---



##### Table of Contents



Stock Performance Graph: 10/25/05,
  Comparison
    Of Cumulative Return Among Legacy Bancorp,
    Peer Group Index and Broad Market Index
  
  10/25/05


12/31/05


12/31/06


12/31/07


12/31/08


12/31/09Legacy Bancorp



100.00




133.50




158.50




132.60




106.80




98.60S&P 500 Market Index



100.00




104.32




118.53




122.72




75.49




93.19SNL Thrifts



100.00




107.63




121.80




70.45




43.54




39.08    37




---



##### Table of Contents



Item 6.
    Selected
    Financial Data  Form 10-K.
  At or for the Years Ended December 31,2009


2008


2007


2006


2005(Dollars in thousands, except per share data)Selected Financial Data:Total assets

$
946,265


$
944,657


$
924,541


$
808,318


$
778,330Loans, net(1)


653,334



695,264



654,024



578,802



547,626Securities and other investments:


184,716



152,639



152,054



176,132



179,921Deposits


651,378



608,088



610,447



518,248



474,464Federal Home Loan Bank advances


160,352



197,898



167,382



127,438



145,923Repurchase agreements


6,386



5,238



4,055



5,575



4,999Total stockholders equity


121,367



124,142



133,092



149,997



146,166Nonperforming loans


19,578



7,549



1,532



879



903Selected Operating Data:Total interest and dividend income


45,818



50,327



49,357



43,915



36,978Total interest expense


18,348



22,465



25,511



20,339



15,054Net interest income


27,470



27,862



23,846



23,576



21,924Provision for loan losses


4,883



1,465



1,051



233



841Net interest income after provision for loan losses


22,587



26,397



22,795



23,343



21,083Non-interest income:Service charges and fees


4,006



4,541



4,496



4,044



4,402Gain (loss) on sales or impairment of securities, net


(10,267
)


(3,194
)


510



(1,736
)


(65
)Gain on sale of loans


860



255



270



210



236FHLB prepayment restructuring charge


















(2,351
)Gain on curtailment and termination of defined benefit plan














605



905Other


788



805



610



329



274Total non-interest income (loss)


(4,613
)


2,407



5,886



3,452



3,401Total non-interest expense


28,832



26,584



27,187



21,336



26,398Income (loss) before income taxes


(10,858
)


2,220



1,494



5,459



(1,914
)Provision for income taxes


(3,060
)


776



249



2,653



297Net income (loss)


(7,798
)


1,444



1,245



2,806



(2,211
)Earnings (loss) per share

$
(0.98
)

$
0.18


$
0.14


$
0.29



n/aDividends per share

$
0.20


$
0.20


$
0.16


$
0.12



n/a   38




---



##### Table of Contents



At or for the Years Ended December 31,2009

2008

2007

2006

2005Selected Financial Ratios and Other Data:Performance Ratios:Return (loss) on average assets(2)


(0.82
)%


0.16
%


0.15
%


0.36
%


(0.31
)%Return (loss) on average equity(3)


(6.20
)


1.11



0.88



1.92



(2.90
)Interest rate spread(4)


2.78



2.80



2.26



2.39



2.84Net interest margin(5)


3.13



3.27



3.01



3.15



3.22Efficiency ratio(6)


84.90



77.5



93.0



74.2



104.2Non-interest expense to average assets


3.04



2.89



3.23



2.70



3.56Average interest-bearing assets to interest-bearing liabilities


116.87



117.89



123.37



127.61



117.30Dividend payout ratio


N/A



111.61



113.82



40.88



n/aRegulatory Capital Ratios(7):Equity to total assets


12.8
%


13.1
%


14.4
%


18.6
%


18.8
%Average equity to average assets


13.3



14.1



16.9



18.5



10.7Total capital (bank only) to risk-weighted assets


12.3



13.0



13.9



18.9



20.0Asset Quality Ratios:Nonperforming assets to total assets


2.20
%


0.80
%


0.17
%


0.11
%


0.12
%Nonperforming loans to total loans


2.96



1.08



0.23



0.15



0.16Allowance for loan losses to nonperforming loans


56.64



87.99



363.45



532.08



467.33Allowance for loan losses to total loans


1.67



0.95



0.85



0.80



0.77Share Data:Book value per share  end of year

$
13.89


$
14.14


$
14.40


$
14.55


$
14.18Tangible book value per share  end of year


12.48



12.74



13.01



14.25



13.88Market price at year end


9.86



10.68



13.26



15.85



13.35     (1)
    
    Includes loans held for sale.(2)
    
    Net income (loss) divided by average total assets.(3)
    
    Net income (loss) divided by average total equity.(4)
    
    Net interest rate spread represents the difference between the
    weighted average yield on interest-earning assets and the
    weighted average cost of interest-bearing liabilities.(5)
    
    Net interest margin represents net interest income as a
    percentage of average interest-earning assets for the year.(6)
    
    The efficiency ratio represents non-interest expense for the
    year less expenses related to the amortization of intangibles
    divided by the sum of net interest income (before loan loss
    provision) plus non-interest income (excluding net gains or
    losses on the sale or impairment of securities).(7)
    
    All capital ratios are as of the end of the year.  Item 7.
    Managements
    Discussion And Analysis Of Financial Condition And Results Of
    Operation  General:
  Dividend:
 39




---



##### Table of Contents



Stock-based compensation:
      Options Granted in

Options Granted in

Options Granted inNovember 2006

December 2007

March 2008Fair Value

$
3.98


$
2.85


$
2.90Risk-free interest rate


4.54
%


3.88
%


3.02
%Expected dividend yield


0.75
%


1.24
%


1.13
%Expected volatility


13.53
%


15.90
%


16.44
%Expected life


6.5 years



6.5 years



6.5 years     Growth Strategy and Challenges:
   40




---



##### Table of Contents



Critical
    Accounting Policies
    Allowance for Loan Losses:
  Income Taxes:
     41




---



##### Table of Contents



Other-Than-Temporary
    Impairment: available-for-sale held-to-maturity, other-than-temporary
      Fair Values of Assets and Liabilities:
          Goodwill:
 42




---



##### Table of Contents



Comparison
    of Financial Condition at December 31, 2009 and
    December 31, 2008
  Total Assets:
  Cash and Short-term Investments:
  Securities:
  Net Loans:
  Deposits:
  Borrowed Funds:
  Stockholders Equity: available-for-sale
 43




---



##### Table of Contents



Operating
    Results Overview
  other-than-temporarily-impaired
  Net Interest Income:
  Non-Interest Expense:
  Net income: other-than-temporarily
  Comparison
    of Operating Results for the Years Ended December 31, 2009
    and 2008
  Analysis of Net Interest Income:
 44




---



##### Table of Contents



Year Ended December 31, 2009


Year Ended December 31, 2008


Year Ended December 31, 2007Average








Average








AverageOutstanding





Yield/


Outstanding





Yield/


Outstanding





Yield/Balance


Interest


Rate


Balance


Interest


Rate


Balance


Interest


Rate(Dollars in thousands)Interest-earning assets:Loans  Net(1)

$
675,661


$
38,849



5.75
%

$
676,222


$
41,944



6.20
%

$
614,567


$
40,460



6.58
%Investment securities


181,642



6,958



3.83
%


164,242



8,141



4.96
%


163,860



8,261



5.04
%Short-term investments


19,165



11



0.06
%


11,265



242



2.15
%


13,558



636



4.69
%Total interest-earning assets


876,468



45,818



5.23
%


851,729



50,327



5.91
%


791,985



49,357



6.23
%Non-interest-earning assets


73,378











67,973











50,212Total assets

$
949,846










$
919,702










$
842,197Interest-bearing liabilities:Savings deposits

$
50,724


$
170



0.34
%

$
49,936


$
203



0.41
%

$
46,986



206



0.44
%Relationship Savings


123,297



1,595



1.29
%


121,990



2,557



2.10
%


101,798



3,949



3.88
%Money market


65,602



684



1.04
%


58,052



1,371



2.36
%


53,523



1,961



3.66
%NOW accounts


43,527



173



0.40
%


41,378



218



0.53
%


35,333



230



0.65
%Certificates of deposits


282,730



8,449



2.99
%


259,439



10,072



3.88
%


240,571



11,500



4.78
%Total interest-bearing deposits


565,880



11,071



1.96
%


530,795



14,421



2.72
%


478,211



17,846



3.73
%Borrowed Funds


184,081



7,277



3.95
%


191,708



8,044



4.20
%


163,750



7,665



4.68
%Total interest-bearing liabilities


749,961



18,348



2.45
%


722,503



22,465



3.11
%


641,961



25,511



3.97
%Non-interest-bearing liabilities


74,007











67,643











58,024Total liabilities


823,968











790,146











699,985Equity


125,878











129,556











142,212Total liabilities and equity

$
949,846










$
919,702










$
842,197Net interest income





$
27,470










$
27,862










$
23,846Net interest rate spread(2)










2.78
%










2.80
%










2.26
%Net interest-earning assets(3)

$
126,507










$
129,226










$
150,024Net interest margin(4)










3.13
%










3.27
%










3.01
%Average interest-earning assets to interest-bearing liabilities










116.87
%










117.89
%










123.37
%     (1)
    
    Includes loans held for sale.(2)
    
    Net interest rate spread represents the difference between the
    yield on total average interest-earning assets and the cost of
    total average interest-bearing liabilities for the twelve months
    ended December 31, 2009, 2008 and 2007.(3)
    
    Net interest-earning assets represents total interest-earning
    assets less total interest-bearing liabilities.(4)
    
    Net interest margin represents net interest income divided by
    average total interest-earning assets. 45




---



##### Table of Contents



Year Ended December 31, 2009 vs. 2008


Year Ended December 31, 2008 vs. 2007Increase


Total


Increase


Total(Decrease) Due to


Increase


(Decrease) Due to


IncreaseVolume


Rate


(Decrease)


Volume


Rate


(Decrease)(Dollars in thousands)Interest-earning assets:Loans  Net

$
(35
)

$
(3,060
)

$
(3,095
)

$
3,496


$
(2,012
)

$
1,484Investment securities


1,028



(2,211
)


(1,183
)


20



(140
)


(120
)Short-term investments


604



(835
)


(231
)


(94
)


(300
)


(394
)Total interest-earning assets


1,597



(6,106
)


(4,509
)


3,422



(2,452
)


970Interest-bearing liabilities:Savings deposits


3



(36
)


(33
)


39



(42
)


(3
)Relationship Savings


27



(989
)


(962
)


1,059



(2,451
)


(1,392
)Money market


208



(895
)


(687
)


185



(775
)


(590
)NOW accounts


12



(57
)


(45
)


156



(168
)


(12
)Certificates of deposits


1,044



(2,667
)


(1,623
)


1,020



(2,448
)


(1,428
)Total deposits


1,294



(4,644
)


(3,350
)


2,459



(5,884
)


(3,425
)Borrowed Funds


(307
)


(460
)


(767
)


950



(571
)


379Total interest-bearing liabilities


987



(5,104
)


(4,117
)


3,409



(6,455
)


(3,046
)Change in net interest income

$
610


$
(1,002
)

$
(392
)

$
13


$
4,003


$
4,016   Net Loss:
  Net Interest Income:
  Interest Income:
  Interest Expense:
 46




---



##### Table of Contents



Provision for Loan Losses:
  Non-interest Income: other-than-temporarily-impaired
  Non-interest Expense:
  Income Taxes:
  Comparison
    of Operating Results for the Years Ended December 31, 2008
    and December 31, 2007
  Net Income:
  Net Interest Income:
  Interest Income:
 47




---



##### Table of Contents



Interest Expense:
  Provision for Loan Losses:
  Non-interest Income: other-than-temporarily
  Non-interest Expense:
  Income Taxes:
  Item 7A:
    Quantitative
    and Qualitative Disclosures about Market Risk     48




---



##### Table of Contents



Management of Credit Risk:
  Management of Market Risk:
        
    Emphasizing the origination and retention of adjustable-rate
    mortgage loans, variable rate commercial loans and variable rate
    home equity
    lines-of-credit;
    Investing in securities with relatively short maturities
    and/or
    expected average lives;
    lassifying nearly all of the investment portfolio as
    available for sale in order to provide for
    flexibility in liquidity management; and
    Lengthening liabilities such as certificates of deposits and
    Federal Home Loan Bank of Boston borrowings when appropriate.   49




---



##### Table of Contents



Percentage Change inEstimated Net InterestIncome Over 12 Months asCompared to Flat Rates500 basis point flattening increase in rates


(4.0
)%200 basis point parallel increase in rates


(3.0
)%Flat interest rates


100 basis point parallel decrease in rates


0.3
%   12-month 12-month
       50




---



##### Table of Contents



Liquidity Risk Management:
        Management of Other Risks:
   51




---



##### Table of Contents



Off-Balance
    Sheet Arrangements
    Contractual Obligations:
  December 31, 2009More thanOne Year


Three YearsOne Year


through


through


Over FiveTotal


or Less


Three Years


Five Years


Years(Dollars in Thousands)Federal Home Loan Bank of Boston advances

$
160,352


$
20,250


$
34,500


$
57,900


$
47,702Securities sold under agreements to repurchase


6,386



6,386











Operating leases


2,787



328



585



552



1,322Total contractual obligations

$
169,525


$
26,964


$
35,085


$
58,452


$
49,024   Loan Commitments :
  December 31, 2009More than


More thanOne Year


Three YearsOne Year


through


through


Over FiveTotal


or Less


Three Years


Five Years


Years(Dollars in Thousands)Commitments to grant loans(1)

$
20,996


$
20,996


$



$



$
Commercial loan
    lines-of-credit


20,707



20,707











Unused portion of home equity loans(2)


64,110



1,225



6,735



17,061



39,089Unused portion of construction loans(3)


12,600



12,600











Unused portion of overdraft


5,058















5,058lines-of-credit(4)Unused portion of personal


824















824lines-of-credit(5)Standby letters of credit(6)


3,448



3,448











Other commitments and contingencies(7)


6,514







6,514







Total loan and other commitments

$
134,257


$
58,976


$
13,249


$
17,061


$
44,971     (1)
    
    Commitments for loans are extended to customers for up to
    60 days after which they expire.(2)
    
    Unused portions of home equity loans are available to the
    borrower for up to 10 years.(3)
    
    Unused portions of residential construction loans are available
    to the borrower for up to one year. Commercial construction
    loans maturities may be longer than one year. 52




---



##### Table of Contents



(4)
    
    Unused portion of checking overdraft
    lines-of-credit
    are available to customers in good standing
    indefinitely.(5)
    
    Unused portion of personal
    lines-of-credit
    are available to customers in good standing
    indefinitely.(6)
    
    Standby letters of credit are generally available for less than
    one year.(7)
    
    Other commitments relate primarily to potential additional
    capital calls the Company is committed to contribute as part of
    its investment in certain real estate limited partnerships.  Impact of
    Inflation and Changing Prices
    Impact of
    Recent Accounting Pronouncements
   53




---



##### 



Item 8:
    Financial
    Statements And Supplemental Data  INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
 PageReport of Independent Registered Public
    Accounting Firm


55Consolidated Balance Sheets as of
    December 31, 2009 and December 31, 2008


56Consolidated Statements of Operations for the
    Years Ended December 31, 2009, 2008 and 2007


57Consolidated Statements of Changes in
    Stockholders Equity for the Years Ended December 31,
    2009, 2008 and 2007


58Consolidated Statements of Cash Flows for the
    Years Ended December 31, 2009, 2008 and 2007


59Notes to Consolidated Financial Statements


60-95   54




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM    Internal Control  Integrated Framework
        Internal Control 
    Integrated Framework )
      55




---



##### Table of Contents



LEGACY
    BANCORP, INC. AND SUBSIDIARIES
  CONSOLIDATED
    BALANCE SHEETS
 (Dollars
    in thousands, except per share amounts)
  December 31,


December 31,2009


2008ASSETSCash and due from banks

$
11,281


$
13,245Short-term investments


28,874



20,350Cash and cash equivalents


40,155



33,595Securities  available for sale


167,426



132,357Securities  held to maturity


97



97Restricted equity securities and other investments 
    at cost


17,193



20,185Loans held for sale


706



Loans, net of allowance for loan losses of $11,089in 2009 and $6,642 in 2008


652,628



695,264Premises and equipment, net


19,568



19,770Accrued interest receivable


3,306



3,633Goodwill, net


9,730



9,687Net deferred tax asset


10,202



10,023Bank-owned life insurance


16,263



15,551Foreclosed assets


1,195



Other assets


7,796



4,495$
946,265


$
944,657LIABILITIES AND STOCKHOLDERS EQUITYDeposits:Noninterest-bearing

$
75,232


$
66,545Interest-bearing


576,146



541,543Total deposits


651,378



608,088Securities sold under agreements to repurchase


6,386



5,238Federal Home Loan Bank advances


160,352



197,898Mortgagors escrow accounts


1,058



1,015Accrued expenses and other liabilities


5,724



8,276Total liabilities


824,898



820,515Commitments and contingencies (Note 12)Stockholders EquityPreferred Stock ($.01 par value, 10,000,000 shares
    authorized, none issued or outstanding)






Common Stock ($.01 par value, 40,000,000 shares
    authorized and 10,308,600 issued at December 31, 2009 and
    2008; 8,734,712 outstanding at December 31, 2009 and
    8,781,912 outstanding at December 31, 2008)


103



103Additional
    paid-in-capital


102,788



102,475Unearned compensation  ESOP


(7,322
)


(8,055
)Unearned compensation  Equity incentive plan


(2,078
)


(2,727
)Retained earnings


48,998



58,534Accumulated other comprehensive income (loss)


711



(4,722
)Treasury stock, at cost (1,573,888 shares at
    December 31, 2009 and 1,526,688 shares at
    December 31, 2008)


(21,833
)


(21,466
)Total stockholders equity


121,367



124,142$
946,265


$
944,657    56




---



##### Table of Contents



LEGACY
    BANCORP, INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
 (Dollars
    in thousands)
  Years Ended December 31,2009


2008


2007Interest and dividend income:Loans

$
38,849


$
41,944


$
40,460Securities:Taxable


6,201



6,964



7,193Tax-Exempt


656



526



282Dividends


101



651



786Short-term investments


11



242



636Total interest and dividend income


45,818



50,327



49,357Interest expense:Deposits


11,071



14,421



17,846Federal Home Loan Bank advances


7,210



7,945



7,539Other borrowed funds


67



99



126Total interest expense


18,348



22,465



25,511Net interest income


27,470



27,862



23,846Provision for loan losses


4,883



1,465



1,051Net interest income after provision for loan losses


22,587



26,397



22,795Non-interest income:Total
    other-than-temporary
    impairment losses on equity securities


(703
)


(3,020
)


Total
    other-than-temporary
    impairment losses on debt securities


(4,983
)


(530
)


Total
    other-than-temporary
    impairment losses on other investments


(3,813
)






Portion of impairment losses on debt securities recognized in
    other comprehensive loss


2,264







Net impairment losses recognized in earnings


(7,235
)


(3,550
)


Customer service fees


2,870



3,202



3,059Portfolio management fees


1,007



1,141



1,183Income from bank-owned life insurance


710



714



500Insurance, annuities and mutual fund fees


129



198



254Net gain (loss) on sales of
    available-for-sale
    securities


(3,032
)


356



510Net gain on sales of loans


860



255



270Miscellaneous


78



91



110Total non-interest income (loss)


(4,613
)


2,407



5,886Non-interest expenses:Salaries and employee benefits


13,754



14,027



16,812Occupancy and equipment


3,921



3,625



2,924Data processing


2,659



2,627



2,314Professional fees


1,083



842



1,008Advertising


1,405



1,121



884Deposit insurance


1,491



214



102Other general and administrative


4,519



4,128



3,143Total non-interest expenses


28,832



26,584



27,187Income (loss) before income taxes


(10,858
)


2,220



1,494Provision (benefit) for income taxes


(3,060
)


776



249Net income (loss)

$
(7,798
)

$
1,444


$
1,245Earnings (loss) per shareBasic

$
(0.98
)

$
0.18


$
0.14Diluted

$
(0.98
)

$
0.18


$
0.14Weighted average shares outstandingBasic


7,977,363



8,058,594



8,856,372Diluted


7,977,363



8,082,498



8,873,180    57




---



##### Table of Contents



LEGACY
    BANCORP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES
    IN STOCKHOLDERS EQUITY
    YEARS ENDED DECEMBER 31, 2009, 2008 AND 2007
    (Dollars in thousands, except per share amounts)
  AccumulatedUnearned





OtherAdditional


Unearned


Compensation 





Comprehensive





TotalCommon Stock


Paid-in


Compensation 


Equity


Retained


Income


Treasury


StockholdersShares


Amount


Capital


ESOP


Incentive Plan


Earnings


(Loss)


Stock


EquityBalance at December 31, 2006


10,308,600


$
103


$
106,094


$
(9,519
)

$
(5,375
)

$
58,863


$
(169
)

$



$
149,997Comprehensive income:Net income






















1,245











1,245Net unrealized gain on securities available for sale, net of
    reclassification adjustment and tax effects


























473







473Amortization of benefit plan gains/losses and prior service costs


























(34
)






(34
)Total comprehensive income (loss)


































1,684Cash dividends declared ($0.16 per share)






















(1,399
)










(1,399
)Common stock repurchased  Restricted stock portion of
    2006 Equity Incentive Plan (412,344 shares)


(65,844
)






(5,579
)


















(1,080
)


(6,659
)Common stock repurchased  5% Stock Repurchase Program
    announced April 2007


(515,430
)


























(7,534
)


(7,534
)Common stock repurchased  5% Stock RepurchaseProgram announced August 2007


(486,366
)


























(6,784
)


(6,784
)Stock option expense










1,121























1,121Restricted stock expense


















1,863















1,863Restricted stock granted










13







(13
)














Release of ESOP stock










71



732



















803Balance at December 31, 2007


9,240,960


$
103


$
101,720


$
(8,787
)

$
(3,525
)

$
58,709


$
270


$
(15,398
)

$
133,092Comprehensive income (loss):Net income






















1,444











1,444Net unrealized loss on securities available for sale, net of
    reclassification adjustment and tax effects


























(5,079
)






(5,079
)Amortization of benefit plan gains/losses and prior service costs


























87







87Total comprehensive income (loss)


































(3,548
)Cash dividends declared ($0.20 per share)






















(1,612
)










(1,612
)Common stock repurchased  5% Stock Repurchase Program
    announced December 2007


(462,048
)


























(6,117
)


(6,117
)Stock option expense










784























784Restricted stock expense


















840















840Restricted stock granted


3,000















(42
)


(7
)






49



Release of ESOP stock










(29
)


732



















703Balance at December 31, 2008


8,781,912


$
103


$
102,475


$
(8,055
)

$
(2,727
)

$
58,534


$
(4,722
)

$
(21,466
)

$
124,142Comprehensive income (loss):Net income (loss)






















(7,798
)










(7,798
)Net unrealized gain on securities available for sale, net of
    reclassification adjustment and tax effects


























5,296







5,296Amortization of benefit plan gains/losses and prior service costs


























137







137Total comprehensive income (loss)


































(2,365
)Cash dividends declared ($0.20 per share)






















(1,603
)










(1,603
)Common stock repurchased  5% Stock Repurchase Program
    announced March 2009


(67,250
)


























(696
)


(696
)Stock option expense










474























474Restricted stock expense


















843















843Restricted stock granted


20,050















(194
)


(135
)






329



Release of ESOP stock










(161
)


733



















572Balance at December 31, 2009


8,734,712


$
103


$
102,788


$
(7,322
)

$
(2,078
)

$
48,998


$
711


$
(21,833
)

$
121,367    58




---



##### Table of Contents



LEGACY
    BANCORP, INC.
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
 (Dollars
    in thousands)
  Years Ended December 31,2009


2008


2007Cash flows from operating activities:Net (loss) income

$
(7,798
)

$
1,444


$
1,245Adjustments to reconcile net income (loss) to net cash provided
    by operating activities:Provision for loan losses


4,883



1,465



1,051Net amortization (accretion) of securities


721



(53
)


(794
)Amortization of core deposit intangible


700



653



39Depreciation and amortization expense


1,615



1,482



1,191Loss on sales/impairment of securities, net


10,267



3,194



(510
)Gain on sales of loans, net


(860
)


(255
)


(270
)Loans originated for sale


(66,795
)


(10,345
)


(18,170
)Proceeds from sales of loans


66,949



23,730



18,045Writedown of foreclosed assets


80







Share-based compensation expense


1,317



1,624



2,984Deferred tax (benefit) provision


(3,637
)


(1,237
)


(1,348
)Employee Stock Ownership Plan expense


572



703



803Net change in:Bank-owned life insurance


(712
)


(763
)


(550
)Accrued interest receivable


327



(229
)


148Other assets


(3,716
)


(1,235
)


84Accrued expenses and other liabilities


(2,320
)


(110
)


2,358Net cash provided by operating activities


1,593



20,068



6,306Cash flows from investing activities:Activity in
    available-for-sale
    securities:Sales


56,650



56,456



7,139Maturities, prepayments and calls


71,920



43,166



115,003Purchases


(162,155
)


(108,919
)


(92,431
)Purchase of Federal Home Loan Bank stock






(210
)


(1,723
)Purchase of other investments


(895
)


(2,587
)


(1,908
)Maturities, prepayments and calls of other investments


74



25



40Loan originations and purchases, net of principal payments


36,478



(55,835
)


(75,313
)Purchases of bank-owned life insurance










(9,814
)Additions to premises and equipment


(939
)


(2,386
)


(3,245
)Net cash received in branch acquisition


9,031







64,819Net cash provided (used) by investing activities


10,164



(70,290
)


2,567Cash flows from financing activities:Net increase (decrease) in deposits


33,457



(2,359
)


15,570Net increase (decrease) in securities sold under agreements to
    repurchase


1,148



1,183



(1,520
)Repayment of Federal Home Loan Bank advances


(50,644
)


(871,460
)


(287,517
)Proceeds from Federal Home Loan Bank advances


13,098



901,976



327,461Net increase (decrease) in mortgagors escrow accounts


43



(19
)


90Repurchase of common stock


(696
)


(6,117
)


(20,977
)Payment of dividends on common stock


(1,603
)


(1,612
)


(1,399
)Net cash provided (used) by financing activities


(5,197
)


21,592



31,708Net change in cash and cash equivalents


6,560



(28,630
)


40,581Cash and cash equivalents at beginning of period


33,595



62,225



21,644Cash and cash equivalents at end of period

$
40,155


$
33,595


$
62,225Supplemental cash flow information:Interest paid on deposits

$
11,209


$
14,453


$
17,912Interest paid on Federal Home Loan Bank advances


7,427



7,933



7,382Interest paid on other borrowed funds


67



99



126Income taxes paid


1,870



1,375



1,750Non-cash activities:Real estate acquired through foreclosure


1,275







Transfers from loans to loans held for sale






12,735



    59




---



##### Table of Contents



LEGACY
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS
 Years Ended December 31, 2009, 2008 and 2007
 (Dollars in Thousands)
  1.
    SUMMARY
    OF SIGNIFICANT ACCOUNTING POLICIES  Basis
    of presentation
      Business
    Stock
    conversion
    Use of
    estimates
  other-than-temporary
  Branch
    acquisitions
   60




---



##### Table of Contents



LEGACY
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
   1.
    SUMMARY
    OF SIGNIFICANT ACCOUNTING
    POLICIES  (Continued)      Significant
    group concentrations of credit risk
    Operating
    segments
      Cash
    and cash equivalents
    Fair
    value hierarchy
       61




---



##### Table of Contents



LEGACY
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
   1.
    SUMMARY
    OF SIGNIFICANT ACCOUNTING
    POLICIES  (Continued)    Securities
      available-for-sale held-to-maturity, other-than-temporary
    Federal
    Home Loan Bank stock and other investments
       62




---



##### Table of Contents



LEGACY
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
   1.
    SUMMARY
    OF SIGNIFICANT ACCOUNTING
    POLICIES  (Continued)  Loans
    held for sale
    Loans
          Allowance
    for loan losses
      non-classified
  case-by-case
 63




---



##### Table of Contents



LEGACY
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
   1.
    SUMMARY
    OF SIGNIFICANT ACCOUNTING
    POLICIES  (Continued)        Foreclosed
    assets
    Premises
    and equipment
    Goodwill
    and other intangible assets
    Bank-owned
    life insurancet
    Transfers
    of financial assets
   64




---



##### Table of Contents



LEGACY
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
   1.
    SUMMARY
    OF SIGNIFICANT ACCOUNTING
    POLICIES  (Continued)  Income
    taxes
      Postretirement
    benefits other than pensions
    Employee
    stock ownership plan
    Share-based
    compensation plans
    Advertising
    costs
    Portfolio
    management assets
   65




---



##### Table of Contents



LEGACY
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
   1.
    SUMMARY
    OF SIGNIFICANT ACCOUNTING
    POLICIES  (Continued)  Treasury
    stock
    Earnings
    per common share
      Year Ended December 31,2009


2008


2007(Dollars in thousands except per share data)Net income (loss) applicable to common stock

$
(7,798
)

$
1,444


$
1,245Average number of shares issued


10,308,600



10,308,600



10,308,600Less: average unallocated ESOP shares


(583,872
)


(638,908
)


(693,830
)Less: average treasury shares


(1,547,362
)


(1,342,802
)


(411,851
)Less: average unvested restricted stock awards


(200,003
)


(268,296
)


(346,547
)Average number of basic shares outstanding


7,977,363



8,058,594



8,856,372Plus: dilutive unvested restricted stock awards






23,551



16,808Plus: diluted stock option shares






353



Average number of diluted shares outstanding


7,977,363



8,082,498



8,873,180Basic earnings (loss) per share

$
(0.98
)

$
0.18


$
0.14Diluted earnings (loss) per share

$
(0.98
)

$
0.18


$
0.14   Comprehensive
    income (loss)
   66




---



##### Table of Contents



LEGACY
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
   1.
    SUMMARY
    OF SIGNIFICANT ACCOUNTING
    POLICIES  (Continued)    Years Ended December 31,2009


2008


2007SecuritiesNet unrealized holding gains (losses) on available-for-sale
    (AFS) securities

$
2,204


$
(11,537
)

$
1,247Reclassification adjustment for (gains) losses on sales of AFS
    securities


3,032



(356
)


(510
)Reclassification adjustment for OTTI losses on AFS securities


5,686



3,550



Non-credit portion of OTTI on AFS securities


(2,264
)






8,658



(8,343
)


737Tax effect


(3,362
)


3,264



(264
)Net-of-tax
    amount


5,296



(5,079
)


473Directors Fee PlanAmortization of benefit plan gains/lossesand prior service costs


232



147



(57
)Tax effect


(95
)


(60
)


23Net-of-tax
    amount


137



87



(34
)$
5,433


$
(4,992
)

$
439     December 31,2009


2008SecuritiesNet unrealized holding gains (losses) on available for sale
    securities

$
1,736


$
(6,922
)Tax effects


(664
)


2,698Net-of-tax
    amount


1,072



(4,224
)Directors Fee PlanUnrecognized net actuarial loss and prior service costs


(611
)


(843
)Tax effect


250



345Net-of-tax
    amount


(361
)


(498
)$
711


$
(4,722
)     Actuarial loss

$
2Prior service cost or credit

$
145  67




---



##### Table of Contents



LEGACY
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
   1.
    SUMMARY
    OF SIGNIFICANT ACCOUNTING
    POLICIES  (Continued)  Recent
    accounting pronouncements
  FASB Accounting Standards
    Codification Codification U.S. GAAP
        other-than-temporary-impairment other-than-temporarily other-than-temporary other-than-temporary
   68




---



##### Table of Contents



LEGACY
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
   1.
    SUMMARY
    OF SIGNIFICANT ACCOUNTING
    POLICIES  (Continued)  special-purpose special-purpose
    2.
    RESTRICTIONS
    ON CASH AND AMOUNTS DUE FROM BANKS    3.
    SHORT-TERM
    INVESTMENTS    December 31,2009


2008Federal funds sold

$
21,119


$
16,278FHLB overnight deposits


7,755



4,072$
28,874


$
20,350  69




---



##### Table of Contents



LEGACY
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
   4.
    SECURITIES    December 31,2009


2008Securities available for sale, at fair value

$
167,426


$
132,357Securities held to maturity, at amortized cost


97



97Other equity securities, at cost:Federal Home Loan Bank of Boston stock


10,932



10,932Savings Bank Life Insurance Company of Massachusetts stock


1,709



1,709Non-marketable equity securities and other investments


4,552



7,544$
184,716


$
152,639     December 31, 2009Gross


GrossAmortized


Unrealized


Unrealized


FairCost


Gains


Losses


ValueSecurities Available for SaleDebt securities:Government-sponsored enterprises (GSE)

$
80,393


$
138


$
(555
)

$
79,976Municipal


17,521



398



(44
)


17,875Corporate and other


1,321



30







1,351GSE residential mortgage-backed


29,591



983



(71
)


30,503U.S. Government guaranteed residential mortgage-backed


33,625



248



(237
)


33,636Total debt securities


162,451



1,797



(907
)


163,341Marketable equity securities


3,239



889



(43
)


4,085Total securities available for sale

$
165,690


$
2,686


$
(950
)

$
167,426Securities Held to MaturityOther bonds and obligations

$
97


$



$



$
97   70




---



##### Table of Contents



LEGACY
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
   4.
    SECURITIES  (Continued)  December 31, 2008Gross


GrossAmortized


Unrealized


Unrealized


FairCost


Gains


Losses


ValueSecurities Available for SaleDebt securities:Government-sponsored enterprises (GSE)

$
36,459


$
463


$
(90
)

$
36,832Municipal


15,876



176



(420
)


15,632Corporate and other


363











363GSE residential mortgage-backed


51,679



921



(110
)


52,490Private label mortgage-backed


28,588







(7,092
)


21,496Total debt securities


132,965



1,560



(7,712
)


126,813Marketable equity securities


6,314



92



(862
)


5,544Total securities available for sale

$
139,279


$
1,652


$
(8,574
)

$
132,357Securities Held to MaturityOther bonds and obligations

$
97


$



$



$
97     Available for Sale


Held to MaturityAmortized


Fair


Amortized


FairCost


Value


Cost


ValueWithin 1 year

$
8,324


$
8,332


$



$
Over 1 year to 5 years


46,854



46,914



82



82Over 5 years to 10 years


17,005



16,984







Over 10 years


27,052



26,972



15



15Total bonds and obligations


99,235



99,202



97



97Mortgage-backed


63,216



64,139







Total debt securities

$
162,451


$
163,341


$
97


$
97      71




---



##### Table of Contents



LEGACY
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
   4.
    SECURITIES  (Continued)    Less Than Twelve Months


Over Twelve MonthsGross





GrossUnrealized


Fair


Unrealized


FairLosses


Value


Losses


ValueDecember 31, 2009:Debt securities:Government-sponsored enterprises (GSE)

$
555


$
46,751


$



$
Municipal


2



818



42



2,472GSE residential mortgage-backed


38



2,983



33



1,779U.S. Government guaranteed residential mortgage-backed


237



19,171







Total debt securities


832



69,723



75



4,251Marketable equity securities


35



472



8



226Total temporarily impaired securities

$
867


$
70,195


$
83


$
4,477December 31, 2008:Debt securities:Government-sponsored enterprises (GSE)

$
90


$
5,821


$



$
Municipal


354



6,078



66



2,551GSE residential mortgage-backed


81



5,737



29



637Private issue mortgage-backed


5,037



16,172



2,055



5,324Total debt securities


5,562



33,808



2,150



8,512Marketable equity securities


862



2,530







Total temporarily impaired securities

$
6,424


$
36,338


$
2,150


$
8,512   other-than-temporary
  other-than-temporarily
  other-than-temporarily
 72




---



##### Table of Contents



LEGACY
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
   4.
    SECURITIES  (Continued)  other-than-temporary other-than-temporary
  5.
    LOANS    December 31,2009


2008Mortgage loans on real estate:Residential

$
285,618


$
344,235Commercial


263,910



246,374Home equity


69,625



63,138619,153



653,747Other loans:Commercial


31,373



34,242Consumer and other


11,791



12,38643,164



46,628Total loans


662,317



700,375Net deferred loan costs


1,400



1,531Allowance for loan losses


(11,089
)


(6,642
)Loans, net

$
652,628


$
695,264     Years Ended December 31,2009


2008


2007Balance at beginning of year

$
6,642


$
5,568


$
4,677Provision for loan losses


4,883



1,465



1,051Recoveries


129



188



58Loans charged-off


(565
)


(579
)


(218
)Balance at end of year

$
11,089


$
6,642


$
5,568  73




---



##### Table of Contents



LEGACY
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
   5.
    LOANS  (Continued)    December 31,2009


2008


2007Impaired loans with no valuation allowance

$
10,081


$
5,771


$
810Impaired loans with a valuation allowance


22,202



4,611



1,982Total impaired loans

$
32,283


$
10,382


$
2,792Valuation allowance allocated to impaired loans

$
4,928


$
966


$
440Average investment in impaired loans

$
19,057


$
7,808


$
3,293Interest income recognized on impaired loans on a cash basis

$
107


$



$
Non-accrual loans

$
19,578


$
7,549


$
1,532         6.
    PREMISES
    AND EQUIPMENT    December 31,


Estimated2009


2008


Useful LivesPremises:Land

$
1,520


$
1,414Buildings and improvements


21,180



20,050



5-39 YearsFurniture and equipment


9,303



8,548



3-10 YearsConstruction in process


250



82832,253



30,840Accumulated depreciation and amortization


(12,685
)


(11,070
)$
19,568


$
19,770      74




---



##### Table of Contents



LEGACY
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
   7.
    GOODWILL
    AND OTHER INTANGIBLE ASSETS  Goodwill
    Year Ended December 31,2009


2008Balance at beginning of the year

$
9,687


$
9,687Acquired goodwill


43



Balance at end of year

$
9,730


$
9,687     December 31,2009


2008Gross carrying value


3,532



3,247Accumulated amortization


(1,392
)


(692
)2,140



2,555     Year Ending December 31,2010


7062011


7062012


6622013


572014


9   75




---



##### Table of Contents



LEGACY
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
   8.
    DEPOSITS    December 31,2009


2008Demand

$
75,232


$
66,545Regular savings


49,883



46,946Relationship savings


125,328



121,376Money market deposits


63,077



60,174NOW deposits


48,546



43,206Total non-certificate accounts


362,066



338,247Term certificates less than $100,000


174,284



162,739Term certificates of $100,000 or more


115,028



107,102Total certificate accounts


289,312



269,841Total deposits

$
651,378


$
608,088     AmountMaturing During the Year Ending December 31,

2009


20082009

$



$
171,5402010


190,370



68,9932011


46,558



23,1352012


13,771



3,7972013


30,258



2,3542014


8,253



5Therafter


102



17$
289,312


$
269,841     9.
    SECURITIES
    SOLD UNDER AGREEMENTS TO REPURCHASE   76




---



##### Table of Contents



LEGACY
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
   10.
    FEDERAL
    HOME LOAN BANK ADVANCES    Weighted AverageAmount


Interest RateMaturing During the Year Ending December 31,

2009


2008


2009


20082009

$



$
37,532




%


4.52
%2010


20,250



45,150



4.52



4.322011


7,500



12,500



3.46



3.592012


27,000



22,000



4.02



4.112013


32,700



17,500



3.45



3.792014


25,200



15,500



3.96



4.22Thereafter


47,702



47,716



3.64



3.63$
160,352


$
197,898



3.81
%


4.07
%     2010

$
4,5002011


2012


20,0002013


2,0002014


13,000Thereafter


47,500$
87,000     77




---



##### Table of Contents



LEGACY
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
   11.
    INCOME
    TAXES    Years Ended December 31,2009


2008


2007Current tax provision:Federal

$
507


$
1,709


$
1,395State


70



304



202577



2,013



1,597Deferred tax benefit:Federal


(4,249
)


(1,154
)


(950
)State


(797
)


(208
)


(438
)(5,046
)


(1,362
)


(1,388
)Change in valuation reserve


1,409



125



40Total provision (benefit)

$
(3,060
)

$
776


$
249     Years Ended December 31,2009


2008


2007Statutory tax rate


34.0
%


34.0
%


34.0
%Increase (decrease) resulting from:State taxes, net of federal tax benefit


4.4



2.9



(10.4
)Bank owned life insurance


2.2



(10.9
)


(11.4
)Dividends received deduction


0.2



(2.6
)


(3.4
)Change in valuation reserve


(13.0
)


5.6



2.7Tax-exempt income


1.6



(6.4
)


(5.1
)Stock based compensation plan


(1.7
)


7.8



7.9Other, net


0.5



4.6



2.4Effective tax rates


28.2
%


35.0
%


16.7
%  78




---



##### Table of Contents



LEGACY
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
   11.
    INCOME
    TAXES  (Continued)    December 31,2009


2008Deferred tax assets:Federal

$
12,615


$
10,533State


2,584



2,12915,199



12,662Valuation reserve


(3,063
)


(1,654
)12,136



11,008Deferred tax liabilities:Federal


(1,549
)


(763
)State


(385
)


(222
)(1,934
)


(985
)Net deferred tax asset

$
10,202


$
10,023     December 31,2009


2008Net unrealized loss (gain) on securities available for sale

$
(664
)

$
2,698Depreciation and amortization


64



66Deferred income


(559
)


(612
)Allowance for loan losses


4,429



2,653Employee benefit plans


3,100



2,892Capital loss carryforward


1,851



281Charitable contribution carryforward


1,866



1,936Projected benefit obligation  Directors fee plan


250



345Impairment losses


2,829



1,530Other


99



(112
)Valuation reserve


(3,063
)


(1,654
)Net deferred tax asset

$
10,202


$
10,023     December 31,2009


2008


2007Balance at beginning of year

$
1,654


$
1,529


$
1,489Reserve for charitable contribution carryforward


201



125



40Reserve for capital loss carryforward


1,208







Balance at end of year

$
3,063


$
1,654


$
1,529  79




---



##### Table of Contents



LEGACY
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
   11.
    INCOME
    TAXES  (Continued)      12.
    COMMITMENTS
    AND CONTINGENCIES    Loan
    and other financial commitments
      December 31,2009

2008Commitments to grant loans

$
20,996


$
17,474Unused funds on commercial
    lines-of-credit


20,707



19,749Unadvanced funds on home equity
    lines-of-credit


64,110



67,037Unadvanced funds on construction loans


12,600



15,479Commercial real estate partnership capital commitments


6,514



8,640Standby
    letters-of-credit
    and other commitments


9,330



6,762   lines-of-credit case-by-case lines-of-credit lines-of-credit
 80




---



##### Table of Contents



LEGACY
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
   12.
    COMMITMENTS
    AND CONTINGENCIES  (Continued)  letters-of-credit letters-of-credit letters-of-credit
  460-10-05.
  Operating
    lease commitments
    Years EndingDecember 31,

Amount2010

$
3282011


2942012


2912013


2802014


272Thereafter


1,322$
2,787     Legal
    claims
    Employment
    and change of control agreements
   81




---



##### Table of Contents



LEGACY
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
   13.
    MINIMUM
    REGULATORY CAPITAL REQUIREMENTS        Minimum To Be WellMinimum

Capitalized UnderCapital

Prompt CorrectiveActual

Requirement

Action ProvisionsAmount

Ratio

Amount

Ratio

Amount

RatioDecember 31, 2009:Total capital to risk weighted assets

$
81,484



12.3
%

$
52,824



8.0
%

$
66,030



10.0
%Tier 1 capital to risk weighted assets


72,811



11.0



26,412



4.0



39,618



6.0Tier 1 capital to average assets


72,811



8.0



36,232



4.0



45,290



5.0December 31, 2008:Total capital to risk weighted assets

$
91,400



13.0
%

$
56,082



8.0
%

$
70,102



10.0
%Tier 1 capital to risk weighted assets


84,533



12.1



28,041



4.0



42,061



6.0Tier 1 capital to average assets:


84,533



9.4



35,889



4.0



44,862



5.0  82




---



##### Table of Contents



LEGACY
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
   13.
    MINIMUM
    REGULATORY CAPITAL
    REQUIREMENTS  (Continued)    12/31/2009


12/31/2008Total stockholders equity per consolidated financial
    statements

$
121,367


$
124,142Adjustments for Bank Tier 1 capital:Holding company equity adjustment


(28,982
)


(30,187
)Net unrealized (gains) losses on available for sale securities


(1,063
)


3,090Unrecognized net actuarial loss and prior service costs


361



498Net unrealized losses on equity securities






(754
)Disallowed deferred tax assets


(6,951
)


Disallowed goodwill and intangible assets and other adjustments


(11,921
)


(12,256
)Total Bank Tier 1 capital


72,811



84,533Adjustments for total capital:Allowed unrealized (losses) gains on equity securities


380



Includable allowances for loan and commitment losses


8,293



6,867Total Bank capital per regulatory reporting

$
81,484


$
91,400     14.
    EMPLOYEE
    BENEFIT PLANS  Defined
    contribution plan
    Supplemental
    executive plans
     83




---



##### Table of Contents



LEGACY
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
   14.
    EMPLOYEE
    BENEFIT PLANS  (Continued)    Employee
    Stock Ownership plan
  15-year
    Year Ending December 31,

Amount2010


5822011


6232012


6642013


7122014


761Thereafter


4,672$
8,014       December 31,2009


2008Allocated


245,167



194,354Unallocated


549,793



604,772794,960



799,126    84




---



##### Table of Contents



LEGACY
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
   14.
    EMPLOYEE
    BENEFIT PLANS  (Continued)  Director
    fee continuation plan
    December 31,2009


2008Change in projected benefit obligation:Benefit obligation at beginning of year

$
1,719


$
1,539Interest cost


99



92Service cost


92



85Actuarial gain


(68
)


42Benefits paid


(39
)


(39
)Benefit obligation accrued at end of year


1,803



1,719Accumulated benefit obligation

$
1,697


$
1,568     December 31,2009

2008Discount rate


5.50
%


5.75
%Rates of fee increase


5.00
%


5.00
%     Years Ended December 31,2009


2008


2007Service Cost

$
92


$
85


$
78Interest Cost


99



92



78Amortization of prior service cost


145



145



145Actuarial loss


19



44



14$
355


$
366


$
315     Years Ended December 31,2009

2008

2007Discount rate


5.75
%


6.00
%


5.75
%Rates of fee increase


5.00
%


5.00
%


5.00
%   85




---



##### Table of Contents



LEGACY
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
   15.
    POSTRETIREMENT
    HEALTH AND LIFE INSURANCE BENEFITS    Years EndedDecember 31,2009


2008


2007Interest cost on projected benefits

$
38


$
39


$
36Recognized net actuarial loss


7



5



Net amortization of transition obligation and prior service cost


(1
)


(1
)


(1
)$
44


$
43


$
35     December 31,2009


2008Change in benefit obligation:Benefit obligation at beginning of year

$
661


$
656Interest cost


38



39Actuarial gain


66



29Benefits paid


(66
)


(63
)Benefit obligation at end of year

$
699


$
661     1% decrease

1% increaseEffect on total of service and interest cost components for 2009

$
(2
)

$
3Effect on the postretirement benefit obligation as of
    December 31, 2009


(41
)


46     2010


722011


702012


682013


672014


652015-2019


289   86




---



##### Table of Contents



LEGACY
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
   16.
    EQUITY
    INCENTIVE PLAN  Stock
    options
    For Options Granted inYears Ended December 31,2008

2007

2006Fair Value

$
2.90


$
2.85


$
3.98Expected dividends


1.13
%


1.24
%


0.75
%Expected term (years)


6.50



6.50



6.50Expected volatility


16.44
%


15.90
%


13.53
%Risk-free interest rate


3.02
%


3.88
%


4.54
%         WeightedWeighted


AverageAverage


Remaining


AggregateExercise Price


Contractual Term


IntrinsicShares


Per Share


(in years)


ValueOutstanding at January 1, 2009


804,280


$
15.80



8.1Granted






Forfeited or expired


(800
)


14.16Outstanding at December 31, 2009


803,480


$
15.80



7.1


$
Exercisable at December 31, 2009


305,076


$
15.91



7.1


$
    87




---



##### Table of Contents



LEGACY
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
   16.
    EQUITY
    INCENTIVE PLAN  (Continued)  Stock
    awards
      Weighted-AverageGrant-DateNonvested Shares

Shares


Fair ValueBalance at beginning of year


268,640


$
16.00Granted


20,050



9.68Vested


(69,900
)


16.01Forfeited






Balance at end of year


218,790


$
15.42     17.
    RELATED
    PARTY TRANSACTIONS      Years Ended December 31,2009


2008Balance at beginning of year

$
2,807


$
2,792Additions/change in status


1,778



288Repayments


(917
)


(273
)Balance at end of year

$
3,668


$
2,807   88




---



##### Table of Contents



LEGACY
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
   18.
    RESTRICTIONS
    ON DIVIDENDS, LOANS AND ADVANCES         19.
    FAIR
    VALUE OF ASSETS AND LIABILITIES  Determination
    of Fair Value
      Cash and cash equivalents 
  Interest-bearing deposits in banks 
  Securities available for sale 
  Federal Home Loan Bank stock 
  Restricted equity securities and other
    investments 
 89




---



##### Table of Contents



LEGACY
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
   19.
    FAIR
    VALUE OF ASSETS AND
    LIABILITIES  (Continued)  Loans receivable  one-to-four
  Deposit liabilities 
  Short-term borrowings 
  Long-term borrowings 
  Accrued interest 
  Assets
    and Liabilities Measured at Fair Value on a Recurring
    Basis
    December 31, 2009Level 1


Level 2


Level 3


Fair ValueAssetsDebt securities:Government-sponsored enterprises






79,976







79,976Municipal bonds






17,875







17,875Corporate bonds and other obligations






1,351







1,351GSE residential mortgage-backed






30,503







30,503U.S. Government guaranteed residential mortagage-backed






33,636







33,636Common stock


4,085











4,085Securities available for sale


4,085



163,341







167,426Total assets


4,085



163,341







167,426   December 31, 2008Level 1


Level 2


Level 3


Fair ValueAssetsSecurities available for sale

$
5,544


$
104,954


$
21,859


$
132,357Total assets

$
5,544


$
104,954


$
21,859


$
132,357  90




---



##### Table of Contents



LEGACY
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
   19.
    FAIR
    VALUE OF ASSETS AND
    LIABILITIES  (Continued)    AssetsSecuritiesAvailable for SaleBalance as of January 1, 2008

$
Total realized/unrealized gains (losses) included in net income


(530
)Total unrealized gains (losses) included in other comprehensive
    income


(7,092
)Purchases, sales, issuances and settlements


Transfers in and/or out of Level 3


29,481Balance as of December 31, 2008

$
21,859Total realized/unrealized gains (losses) included in net income


(2,719
)Total unrealized gains (losses) included in other comprehensive
    income


2,985Purchases, sales, issuances and settlements


(22,125
)Transfers in and/or out of Level 3


Balance as of December 31, 2009

$
Change in unrealized gains/(losses) relating to instruments
    still held at December 31, 2009

$
Change in unrealized gains/(losses) relating to instruments
    still held at December 31, 2008

$
(7,092
)   Assets
    and Liabilities Measured at Fair Value on a Non-Recurring
    Basis
  lower-of-cost-or-market
  Year EndedDecember 31, 2009December 31, 2009


TotalLevel 1


Level 2


Level 3


Gains/(Losses)AssetsImpaired loans

$



$



$
18,230


$
(3,972
)Other investments










4,397



(3,813
)Foreclosed assets










1,195



(80
)Total assets

$



$



$
23,822


$
(7,865
)   91




---



##### Table of Contents



LEGACY
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
   19.
    FAIR
    VALUE OF ASSETS AND
    LIABILITIES  (Continued)  Year EndedDecember 31, 2008December 31, 2008


TotalLevel 1


Level 2


Level 3


Gains/(Losses)AssetsImpaired loans

$



$
4,611


$



$
(652
)Total assets

$



$
4,611


$



$
(652
)         Summary
    of Fair Value of Financial Instruments
    December 31,2009

2008Carrying

Fair

Carrying

FairAmount

Value

Amount

ValueFinancial assets:Cash and cash equivalents

$
40,155


$
40,155


$
33,595


$
33,595Securities available for sale


167,426



167,426



132,357



132,357Securities held to maturity


97



97



97



97Federal Home Loan Bank of Boston stock


10,932



10,932



10,932



10,932Savings Bank Life Insurance stock


1,709



1,709



1,709



1,709Other investments


4,552



4,552



7,544



7,544Loans and loans held for sale


653,334



656,978



695,264



704,765Accrued interest receivable


3,306



3,306



3,633



3,633Financial liabilities:Deposits


651,378



656,038



608,088



613,251Repurchase agreements


6,386



6,386



5,238



5,237FHLB advances


160,352



167,331



197,898



200,836Mortgagors escrow accounts


1,058



1,058



1,015



1,015   92




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##### Table of Contents



LEGACY
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
   20.
    PARENT
    COMPANY-ONLY CONDENSED FINANCIAL STATEMENTS    BALANCE
    SHEETS
  December 31,2009


2008Cash and cash equilavents

$
3,148


$
4,534Securities at fair value


18,258



16,733Investment in common stock of Legacy Banks


92,384



93,955Investment in common stock of LB Funding Corp.


7,006



7,782Accrued interest receivable


117



125Other assets


1,797



1,218Total Assets

$
122,710


$
124,347Deferred tax liability

$
1,239


$
92Accrued expenses and other liabilties


104



113Stockholders equity


121,367



124,142Total Liabilities and Stockholders Equity

$
122,710


$
124,347   CONDENSED
    STATEMENTS OF OPERATIONS
  Years Ended December 31,2009


2008


2007Income:Dividends from Legacy Banks

$



$



$
4,000Interest on securities


888



1,019



1,370Interest on cash and short-term investments


2



96



252Gain (loss) on sales of securities


(1,603
)


41



Total Income


(713
)


1,156



5,622Operating expenses


1,052



1,022



1,024Income (loss) before income taxes and equity in undistributed
    net income of subsidiaries


(1,765
)


134



4,598Income tax provision (benefit)


(66
)


50



261Income (loss) before equity in income (loss) of subsidiaries


(1,699
)


84



4,337Equity in undistributed income (loss) of Legacy Banks


(6,432
)


1,005



(3,465
)Equity in undistributed income of LB Funding


333



355



373Net income (loss)

$
(7,798
)

$
1,444


$
1,245  93




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##### Table of Contents



LEGACY
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
   20.
    PARENT
    COMPANY-ONLY CONDENSED FINANCIAL
    STATEMENTS  (Continued)  CONDENSED
    STATEMENT OF CASH FLOWS
  Years Ended December 31,2009


2008


2007Cash flows from operating activities:Net income

$
(7,798
)

$
1,444


$
1,245Adjustments to reconcile net income (loss) to net cash(used) provided by operating activities:Net amortization (accretion) of securities


34



(67
)


(472
)(Gain) loss on sales of securities, net


1,602



(41
)


Equity in undistributed (income) loss of Legacy Banks


6,432



(1,005
)


3,465Equity in undistributed income of LB Funding Corp.


(333
)


(355
)


(373
)Share-based compensation expense


1,317



1,624



2,984Deferred tax provision (benefit)


(611
)


1,093



476Net change in:Accrued interest receivable


8



94



98Other assets


(579
)


(514
)


(702
)Accrued expenses and other liabilities


1,138



56



46Net cash (used) provided by operating activities:


1,210



2,329



6,767Cash flows from investing activities:Activities in
    available-for-sale
    securities:Sales


8,466



12,028



Maturities, prepayments and calls


12,195



16,854



49,500Purchases


(22,067
)


(23,226
)


(38,748
)Net cash provided (used) by investing activities:


(1,406
)


5,656



10,752Cash flows from financing activities:Payment of dividends on common stock


(1,603
)


(1,612
)


(1,399
)Payment of loan from LB Funding


1,109



1,109



1,108Repurchase of common stock


(696
)


(6,117
)


(20,977
)Other, net










416Net cash used by financing activities:


(1,190
)


(6,620
)


(20,852
)Net change in cash and cash equivalents


(1,386
)


1,365



(3,333
)Cash and cash equivalents at beginning of year


4,534



3,169



6,502Cash and cash equivalents at end of year

$
3,148


$
4,534


$
3,169   94




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##### Table of Contents



LEGACY
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
   21.
    QUARTERLY
    DATA (UNAUDITED)    2009


2008Fourth


Third


Second


First


Fourth


Third


Second


FirstQuarter


Quarter


Quarter


Quarter


Quarter


Quarter


Quarter


QuarterInterest and dividend income

$
10,930


$
11,364


$
11,587


$
11,937


$
12,493


$
12,618


$
12,466


$
12,750Interest expense


4,275



4,420



4,675



4,978



5,214



5,353



5,487



6,410Net interest income


6,655



6,944



6,912



6,959



7,279



7,265



6,979



6,340Provision for loan losses


2,548



101



1,506



728



890



4



346



225Non-interest income


(2,313
)


(2,204
)


198



(294
)


(705
)


532



1,428



1,152Non-interest expenses


7,135



6,970



7,650



7,077



6,339



6,835



6,746



6,664Provision (benefit) for income taxes


(1,526
)


(633
)


(553
)


(348
)


(204
)


394



401



186Net income (loss)

$
(3,815
)

$
(1,698
)

$
(1,493
)

$
(792
)

$
(451
)

$
564


$
914


$
417Basic earnings (loss) per share

$
(0.48
)

$
(0.21
)

$
(0.19
)

$
(0.10
)


(0.06
)


0.07



0.11



0.05Diluted earnings (loss) per share

$
(0.48
)

$
(0.21
)

$
(0.19
)

$
(0.10
)


(0.06
)


0.07



0.11



0.05   other-than-temporarily
  other-than-temporarily
    22.
    SUBSEQUENT
    EVENTS   95




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##### Table of Contents



Item 9.
    Changes
    In And Disagreements With Accountants On Accounting And
    Financial Disclosure    Item 9a.
    Controls
    And Procedures  Rule 13a-15(e)
  CHANGES
    IN INTERNAL CONTROL OVER FINANCIAL REPORTING
    MANAGEMENTS
    REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
    Internal Control  Integrated Framework
        Item 9b.
    Other
    Information   96




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##### Table of Contents



PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance    Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership Of Certain Beneficial Owners And Management And
    Related Stockholder Matters                  Number of SecuritiesWeighted-


Remaining Available forNumber of Securities


Average Exercise


Future Issuance Underto be Issued Upon


Price of


Equity CompensationExercise of


Outstanding


Plans (ExcludingOutstanding Options,


Options, Warrants


Securities Reflected inPlan Category

Warrants and Rights


and Rights


the First Column)Equity compensation plans approved by security holders


803,480


$
15.81



227,380Equity compensation plans not approved by security holders










Total


803,480


$
15.81



227,380   Item 13.
    Certain
    Relationships And Related Transactions, and Director
    Independence   97




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##### Table of Contents



Item 14.
    Principal
    Accountant Fees And Services   PART IV  Item 15.
    Exhibits And
    Financial Statement Schedules  Form 10-K.
 98




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##### Table of Contents



SIGNATURES    
   
        
        
        
       
      99




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##### Table of Contents



100




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##### Table of Contents



INDEX TO
    EXHIBITS
  2
.1

Amended and Restated Plan of Conversion(1)3
.1

Certificate of Incorporation of Legacy Bancorp, Inc.(1)3
.2

Bylaws of Legacy Bancorp, Inc. (as amended)(1)10
.1

Legacy Banks ESOP Trust Agreement(2)10
.2

ESOP Plan Document(2)10
.3

ESOP Loan Documents(2)10
.4.1

Employment Agreement between Legacy Banks and J. Williar
    Dunlaevy(2)10
.4.2

Employment Agreement between Legacy Banks and Michael A.
    Christopher(2)10
.4.3

Employment Agreement between Legacy Banks and Steven F. Pierce(2)10
.4.4

Employment Agreement between Legacy Banks and Stephen M.
    Conley(2)10
.4.5

Employment Agreement between Legacy Banks and Richard M.
    Sullivan(2)10
.5.1

Employment Agreement between Legacy Bancorp, Inc. and J. Williar
    Dunlaevy(2)10
.5.2

Employment Agreement between Legacy Bancorp, Inc. and Michael A.
    Christopher(2)10
.5.3

Employment Agreement between Legacy Bancorp, Inc. and Steven F.
    Pierce(2)10
.5.4

Employment Agreement between Legacy Bancorp, Inc. and Stephen M.
    Conley(2)10
.5.5

Employment Agreement between Legacy Bancorp, Inc. and Richard M.
    Sullivan(2)10
.5.6

Separation Agreement and General Release dated as of
    November 5, 2007 between Legacy Bancorp, Inc., Legacy Banks
    and Michael A. Christopher(3)10
.5.7

Separation Agreement and General Release dated as of
    December 21, 2007 between Legacy Bancorp, Inc., Legacy
    Banks and Stephen M. Conley(4)10
.5.8

Consulting Agreement dated as of November 5, 2007 between
    Legacy Bancorp, Inc., Legacy Banks and Michael A. Christopher(3)10
.5.9

Purchase Agreement by and between First Niagara Bank and Legacy
    Banks dated as of July 25, 2007(5)10
.5.10

Change In Control Agreement between Legacy Bancorp, Inc. and
    Paul H. Bruce(6)10
.5.11

Change In Control Agreement between Legacy Bancorp, Inc. and
    Kimberly A. Mathews(6)10
.5.12

Purchase Agreement by and between The Bank of Western
    Massachusetts and Legacy Banks dated as of December 15,
    2008(7)10
.5.13

Amended and Restated Employment Agreement effective as of
    November 20, 2008 by and between Legacy Bancorp, Inc.,
    Legacy Banks and J. Williar Dunlaevy(8)10
.5.14

Amended and Restated Employment Agreement effective as of
    November 20, 2008 by and between Legacy Bancorp, Inc.,
    Legacy Banks and Steven F. Pierce(8)10
.5.15

Amended and Restated Employment Agreement effective as of
    November 20, 2008 by and between Legacy Bancorp, Inc.,
    Legacy Banks and Richard M. Sullivan(8)10
.5.16

Amended and Restated Supplemental Executive Retirement Agreement
    effective as of November 20, 2008 by and between Legacy
    Bancorp, Inc., Legacy Banks and J. Williar Dunlaevy(8)10
.5.17

Employment Agreement effective as of April 1, 2010 by and
    between Legacy Bancorp, Inc., Legacy Banks and Patrick J.
    Sullivan(9)10
.11

2007 Equity Incentive Plan(3)11
.0

Statement re: Computation of Per Share Earnings is incorporated
    herein by reference to Part II, Item 8,
    Financial Statements and Supplementary Data14
.0

Code of Ethics21
.0

List of all subsidiaries of the Registrant23
.0

Consent of Independent Registered Public Accounting Firm31
.1

Certification pursuant to
    Rule 13a-14(a)/15d-14(a)
    of J. Williar Dunlaevy31
.2

Certification pursuant to
    Rule 13a-14(a)/15d-14(a)
    of Paul H. Bruce32


Certification pursuant to 18 U.S.C. Section 1350




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##### Table of Contents



(1)
    
    Incorporated by reference from the Registrants Quarterly Report
    on
    Form 10-Q
    for the Quarter Ended June 30, 2005 filed October 27,
    2005.(2)
    
    Incorporated by reference from the Registration Statement on
    Form S-1
    (No. 333-126481)
    filed July 8, 2005, as amended.(3)
    
    Incorporated by reference from the Registrants Current
    Report on
    Form 8-K
    filed November 5, 2007.(4)
    
    Incorporated by reference from the Registrants Current
    Report on
    Form 8-K
    filed December 21, 2007.(5)
    
    Incorporated by reference from the Registrants Current
    Report on
    Form 8-K
    filed July 25, 2007.(6)
    
    Incorporated by reference from the Registrants Current
    Report on
    Form 8-K
    filed October 30, 2008.(7)
    
    Incorporated by reference from the Registrants Current
    Report on
    Form 8-K
    filed December 16, 2008.(8)
    
    Incorporated by reference from the Registrants Current
    Report on
    Form 8-K
    filed November 25, 2008.(9)
    
    Incorporated by reference from the Registrants Current
    Report on
    Form 8-K
    filed March 4, 2010.