-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NQ8u4jeqgUxCQ2CzTIIpKyTnWVQNXR2KLZDe+xZGjNCgiOJ/9T/mc6ogzyyXlz4z cjGtIhaezGuEFksKbWrsPw== 0000908737-97-000505.txt : 19971117 0000908737-97-000505.hdr.sgml : 19971117 ACCESSION NUMBER: 0000908737-97-000505 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971114 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SIS BANCORP INC CENTRAL INDEX KEY: 0001013049 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTIONS, NOT FEDERALLY CHARTERED [6036] IRS NUMBER: 043303264 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-20809 FILM NUMBER: 97718173 BUSINESS ADDRESS: STREET 1: P O BOX 3034 STREET 2: 1441 MAIN STREET CITY: SPRINGFIELD STATE: MA ZIP: 01102-3034 BUSINESS PHONE: 4137488000 MAIL ADDRESS: STREET 1: 1441 MAIN STREET CITY: SPRINGFIELD STATE: MA ZIP: 01102 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended 09/30/97 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ___________ Commission file number: 000-20809 SIS BANCORP, INC. (Exact Name of Issuer as Specified in its Charter) Massachusetts 04-3303264 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) SIS BANCORP, INC. 1441 Main Street Springfield, Massachusetts 01102 (Address of Principal Executive Offices) (Zip Code) (413) 748-8000 (Issuers Telephone Number, Including Area Code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ____ Indicate the number of shares outstanding of the registrant's common stock, as of the latest practicable date: 5,580,842 shares as of November 3, 1997. CAUTIONARY STATEMENT FOR PURPOSES OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 This Report contains certain "forward-looking statements" including statements concerning plans, objectives, future events or performance and assumptions and other statements which are other than statements of historical fact. SIS Bancorp, Inc. and its subsidiaries (the "Company") wish to caution readers that the following important factors, among others, may have affected and could in the future affect the Company's actual results and could cause the Company's actual results for subsequent periods to differ materially from those expressed in any forward-looking statement made by or on behalf of the Company herein: (i) the effect of changes in laws and regulations, including federal and state banking laws and regulations, with which the Company must comply, and the associated costs of compliance with such laws and regulations either currently or in the future as applicable; (ii) the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies as well as by the Financial Accounting Standards Board; (iii) the effect on the Company's competitive position within its market area of the increasing consolidation within the banking and financial services industries, including the increased competition from larger regional and out-of-state banking organizations as well as nonbank providers of various financial services; (iv) the effect of unforeseen changes in interest rates; and (v) the effect of changes in the business cycle and downturns in the local, regional or national economies. SIS BANCORP, INC. AND SUBSIDIARIES FORM 10-Q INDEX PAGE NO. PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Condensed Consolidated Statement of Operations for the three and nine months ended September 30, 1997 and 1996................. 1 Condensed Consolidated Statement of Financial Condition at September 30, 1997 and December 31, 1996............................. 2 Condensed Consolidated Statement of Cash Flows for the nine months ended September 30, 1997 and 1996........................... 3 Condensed Consolidated Statement of Changes in Stockholders' Equity for the nine months ended September 30, 1997 and 1996 .................. 5 Notes to the Unaudited Financial Statements............................. 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations .............. 8 PART II OTHER INFORMATION Item 1. Legal Proceedings............................................... 28 Item 2. Changes in Securities........................................... 28 Item 3. Default upon Senior Securities.................................. 28 Item 4. Submission of Matters to a Vote of Security Holders............. 28 Item 5. Other Information............................................... 28 Item 6. Exhibits and Reports on Form 8-K................................ 28 SIGNATURES.............................................................. 29
SIS BANCORP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Dollars In Thousands Except Per Share Amounts) (Unaudited) (Unaudited) Three Months Ended Nine Months Ended --------------------------------- ------------------------------ September 30, September 30, September 30, September 30, 1997 1996 1997 1996 -------------- ------------- ------------- ------------- Interest and dividend income: Loans $ 13,958 $ 12,472 $ 40,285 $ 35,946 Investment securities available for sale 8,019 5,934 24,105 15,230 Investment securities held to maturity 3,169 3,279 9,849 9,494 Federal funds sold and short term investments 357 121 716 380 -------- -------- -------- -------- Total interest and dividend income 25,503 21,806 74,955 61,050 -------- -------- -------- -------- Interest expense: Deposits 8,735 8,270 25,614 24,338 Borrowings 4,258 2,291 11,782 5,439 -------- -------- -------- -------- Total interest expense 12,993 10,561 37,396 29,777 -------- -------- -------- -------- Net interest and dividend income 12,510 11,245 37,559 31,273 Less: Provision for possible loan losses 402 750 1,203 2,200 -------- -------- -------- -------- Net interest and dividend income after provision for possible loan losses 12,108 10,495 36,356 29,073 Noninterest income: Net gain on sale of loans 136 105 328 537 Net gain on sale of securities 10 62 21 64 Fees and other income 3,157 2,761 8,533 7,645 -------- -------- -------- -------- Total noninterest income 3,303 2,928 8,882 8,246 -------- -------- -------- -------- Noninterest expense: Operating expenses: Salaries and employee benefits 4,971 4,408 14,631 12,900 Occupancy expense of bank premises, net 982 810 2,885 2,387 Furniture and equipment expense 565 558 1,596 1,614 Other operating expenses 3,751 3,846 10,992 10,617 -------- -------- -------- -------- Total operating expenses 10,269 9,622 30,104 27,518 -------- -------- -------- -------- Foreclosed real estate expense 90 29 58 252 Net (income) expense of real estate operations (63) (8) 416 (170) -------- -------- -------- -------- Total noninterest expense 10,296 9,643 30,578 27,600 Income before income tax expense (benefit) 5,115 3,780 14,660 9,719 Income tax expense (benefit) 1,946 (6,421) 5,731 (5,931) -------- -------- -------- -------- Net income $ 3,169 $ 10,201 $ 8,929 $ 15,650 ======== ======== ======== ======== Earnings per share: Primary $ 0.57 $ 1.85 $ 1.60 $ 2.86 Fully diluted $ 0.57 $ 1.84 $ 1.58 $ 2.82 Weighted average shares outstanding: Primary 5,521,785 5,511,554 5,584,339 5,475,422 Fully diluted 5,559,872 5,556,512 5,647,024 5,543,980 See accompanying Notes to the Unaudited Financial Statements
1
SIS BANCORP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET (Dollars In Thousands Except Share Amounts) (Unaudited) September 30, December 31, 1997 1996 -------------- ----------- ASSETS Cash and due from banks $ 34,464 $ 31,902 Federal funds sold and short-term investments 6,692 10,045 Investment securities available for sale 502,868 449,323 Investment securities held to maturity (fair value: $182,537 at September 30, 1997 and $191,617 at December 31, 1996) 182,320 192,174 Loans receivable, net of allowance for possible losses ($18,393 at September 30, 1997 and $15,597 at December 31, 1996) 670,056 610,597 Accrued interest and dividends receivable 9,517 8,982 Investments in real estate and real estate partnerships 2,666 2,757 Foreclosed real estate, net 199 381 Bank premises, furniture and fixtures, net 28,244 27,106 Other assets 15,991 15,345 ----------- ----------- Total assets $ 1,453,017 $ 1,348,612 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Deposits $ 1,021,613 $ 969,517 Federal Home Loan Bank advances 134,297 68,471 Securities sold under agreements to repurchase 148,888 176,577 Loans payable 2,670 2,848 Mortgage escrow deposits 6,543 4,396 Accrued expenses and other liabilities 32,048 24,886 ----------- ----------- Total liabilities 1,346,059 1,246,695 ----------- ----------- Commitments and contingent liabilities -- -- Stockholders' equity: Preferred stock ($.01 par value; 5,000,000 shares authorized; no shares issued and outstanding) -- -- Common stock ($.01 par value; 25,000,000 shares authorized; shares issued: 5,727,242 at September 30, 1997 and 5,723,600 at December 31, 1996; outstanding: 5,580,842 at September 30, 1997 and 5,723,600 at December 31, 1996) 57 57 Unearned compensation (3,036) (3,693) Additional paid-in capital 43,218 42,665 Retained earnings 67,901 60,993 Net unrealized gain on investment securities available for sale 2,678 1,895 Treasury stock, at cost (146,400 shares at September 30, 1997) (3,860) -- ----------- ----------- Total stockholders' equity 106,958 101,917 ----------- ----------- Total liabilities and stockholders' equity $ 1,453,017 $ 1,348,612 =========== =========== See accompanying Notes to the Unaudited Financial Statements
2
SIS BANCORP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Dollars In Thousands) (Unaudited) Nine Months Ended September 30, ------------------------ 1997 1996 ---------- ---------- Cash Flows From Operating Activities Net income $ 8,929 $ 15,650 Adjustments to reconcile net income to net cash provided by/ (used for) operating activities Provision for possible loan losses 1,203 2,200 Depreciation 2,275 2,271 Amortization of premium on investment securities, net 1,836 1,585 ESOP and restricted stock expenses 1,375 1,104 Investment security gains -- (64) Income from equity investment in partnerships 6 (47) Gain on sale of loans (328) (537) Disbursements for mortgage loans held for sale (42,571) (65,258) Receipts from mortgage loans held for sale 42,898 65,795 Loss on sale of fixed assets and real estate -- 343 Changes in other assets and other liabilities: Increase in other assets, net (1,937) (8,501) Increase in accrued expenses and other liabilities 7,162 3,092 --------- --------- Net cash provided by operating activities 20,848 17,633 --------- --------- Cash Flows From Investing Activities Proceeds from sales of investment securities available for sale 7,002 30,863 Proceeds from maturities and principal payments received on investment securities available for sale 117,753 90,816 Purchase of investment securities available for sale (178,248) (262,977) Proceeds from maturities and principal payments received on investment securities held to maturity 32,381 37,211 Purchase of investment securities held to maturity (22,876) (58,991) Net decrease in investments in real estate -- 475 Net increase in loans receivable (60,980) (40,489) Net decrease in foreclosed real estate 409 1,862 Proceeds from sale of loans 92 4,056 Proceeds from sale of fixed assets and leases -- 267 Purchase of fixed assets (3,328) (2,029) --------- --------- Net cash used for investing activities (107,795) (198,936) --------- --------- See accompanying Notes to the Unaudited Financial Statements
3
SIS BANCORP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (continued) (Dollars In Thousands) (Unaudited) Nine Months Ended September 30, ----------------------- 1997 1996 ---------- --------- Cash Flows from Financing Activities Net increase in deposits 52,096 68,746 Net increase in borrowings 37,959 124,288 Net increase in mortgagors' escrow deposits 2,147 2,101 Net proceeds from exercise of stock options 168 -- Repurchase of common stock (4,193) -- Cash dividends paid (2,021) -- -------- -------- Net cash provided by financing activities 86,156 195,135 -------- -------- Increase in cash and cash equivalents (791) 13,832 Cash and cash equivalents, beginning of period 41,947 38,422 -------- -------- Cash and cash equivalents, end of period $ 41,156 $ 52,254 ======== ======== Supplemental disclosures of cash flow information: Cash paid during the period for interest to depositors and interest on debt $ 36,528 $ 29,861 Income taxes paid $ 2,172 $ 438 Non-cash investing activities: Transfers to foreclosed real estate, net $ 227 $ 845 See accompanying Notes to the Unaudited Financial Statements
4 SIS BANCORP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY For The Nine Months Ended September 30, 1997 and 1996 (Dollars In Thousands) Net unrealized gain (loss) on investment Additional securities Treasury Common Unearned Paid-In Retained available Stock Stock Compensation Capital Earnings for sale at Cost Total ------- --------- --------- --------- --------- ------- --------- Balance at December 31, 1996 $ 57 $ (3,693) $ 42,665 $ 60,033 $ 1,895 $ - $ 101,917 Net income - - - 8,929 - - 8,929 Cash dividends declared ($0.38 per share) - - - (2,021) - - (2,021) Issuance of common stock in connection with employee and non-employee directors benefit programs - (98) (67) - - 333 168 Decrease in unearned compensation - 755 620 - - - 1,375 Change in unrealized gain on investment securities available for sale - - - - 783 - 783 Treasury stock purchased - - - - - (4,193) (4,193) ------- --------- --------- --------- --------- ------- --------- Balance at September 30, 1997 $ 57 $ (3,036) $ 43,218 $ 67,901 $ 2,678 $(3,860) $ 106,958 ======= ========= ========= ========= ========= ======= ========= Balance at December 31, 1995 $ 57 $ (4,937) $ 41,790 $ 42,833 $ 1,726 $ - $ 81,469 Net income - - - 15,650 - - 15,650 Issuance of common stock in connection with employee and non-employee directors benefit programs - (315) 297 - - - (18) Decrease in unearned compensation - 970 382 - - - 1,352 Change in unrealized gain on investment securities available for sale - - - - (1,393) - (1,393) ------- --------- --------- --------- --------- ------- --------- Balance at September 30, 1996 $ 57 $ (4,282) $ 42,469 $ 58,483 $ 333 $ - $ 97,060 ======= ========= ========= ========= ========= ======= ========= See accompanying Notes to the Unaudited Financial Statements
5 SIS BANCORP, INC. AND SUBSIDIARIES NOTES TO THE UNAUDITED FINANCIAL STATEMENTS (Dollars in thousands except per share amounts) 1. Holding Company Formation SIS Bancorp, Inc., a Massachusetts corporation, was organized by Springfield Institution for Savings (the "Bank") for the purpose of reorganizing the Bank into a holding company structure. The Company acquired 100% of the outstanding shares of the Bank's common stock, par value $1.00 per share, in a 1:1 exchange for shares of the Company's common stock, par value $.01 per share (the "Company Common Stock"). Upon the effectiveness of such share-for-share exchange (the "Reorganization") on June 21, 1996, the Bank became the wholly-owned subsidiary of the Company and the Bank's former stockholders became stockholders of the Company. The Reorganization was accounted for in a manner similar to a pooling of interests, and accordingly, the information included in the financial statements and their accompanying notes presents the combined results of the Bank and the Company as if the Reorganization had been effected on January 1, 1996. 2. Condensed Consolidated Financial Statements The Condensed Consolidated Financial Statements of the Company included herein are unaudited, and in the opinion of management all adjustments, consisting only of normal recurring adjustments necessary for a fair presentation of the financial condition, results of operations and cash flows, as of and for the periods covered herein, have been made. Certain information and note disclosures normally included in Condensed Consolidated Financial Statements have been omitted as they are included in the most recent Securities and Exchange Commission ("SEC") Form 10-K and accompanying Notes to the Financial Statements (the "Form 10-K") filed by the Company for the year ended December 31, 1996. Management believes that the disclosures contained herein are adequate to make a fair presentation. These unaudited condensed consolidated financial statements should be read in conjunction with the Form 10-K. The results for the three and nine month interim periods covered hereby are not necessarily indicative of the operating results for a full year. 3. New Accounting Pronouncements Effective January 1, 1997, the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 125 "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities", that provides accounting and reporting standards which require that after a transfer of financial assets, an entity recognizes the financial and servicing assets it controls and the liabilities it has incurred, derecognizes financial assets when control has been surrendered, and derecognizes liabilities when extinguished. In addition to setting requirements regarding the initial recording and subsequent accounting for assets, liabilities and derivatives acquired in transfers of financial assets, this Statement requires that debtors reclassify financial assets pledged as collateral and that secured parties recognize those assets and their obligation to return them in certain circumstances in which the secured party has taken control of those assets. SFAS 125 is effective prospectively for transfers and servicing of financial assets and extinguishments of liabilities occurring after December 31, 1996 and for collateral related matters on January 1, 1998. The adoption of this statement did not have a material affect on the Company's financial position as of September 30, 1997 or on the results of its operations for the three and nine month periods then ended. In February of 1997 the Financial Accounting Standards Board issued SFAS 128, "Earnings Per Share". SFAS 128 establishes standards for computing and presenting earnings per share ("EPS") and applies to entities with publicly held common stock or potential common stock. This statement simplifies the standards for computing EPS previously found in APB Opinion No. 15, "Earnings Per Share," and makes them comparable to international EPS standards. It replaces the presentation of primary EPS with a presentation of basic EPS. It also requires dual presentation of basic and diluted EPS on the face of the income statement for all entities with complex capital structures and requires reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. SFAS 128 will be effective for financial statements issued after December 15, 1997, and will be adopted by the Company in its December 31, 1997 financial statements. If SFAS 128 had been effective during the first nine months of 1997, pro forma basic EPS for the three and nine months ended September 30, 1997 would have been $0.61 and $1.71, respectively. Pro forma diluted EPS for the three and nine months ended September 30, 1997 would have been $0.58 and $1.60, respectively. In June 1997, the Financial Accounting Standards Board issued SFAS 131, "Disclosures about Segments of an Enterprise and Related Information" which establishes standards for the way that public business enterprises report 6 financial and descriptive information about its reportable operating segments in annual financial statements and requires that those enterprises report selected information about operating segments in interim financial reports issued to shareholders. SFAS 131 defines reportable operating segments as components of an enterprise about which separate financial information is available that is evaluated regularly by management in deciding how to allocate resources in assessing performance. The statement is effective for financial statements for periods beginning after December 15, 1997. Management of the Company does not believe that the adoption of SFAS 131 will have a material impact on its financial statements. 4. Dividend Policy The Company paid cash dividends in the amount of $0.12, $0.12 and $0.14 per share on February 20, 1997, May 23, 1997 and August 21, 1997, respectively. On October 22, 1997 the Company declared a dividend of $0.14 per share payable on November 21, 1997 to shareholders of record as of the close of business on November 4, 1997. 5. Divestment Related Charges The Company has certain subsidiaries that are engaged in various real estate investments, directly or in joint ventures with unaffiliated partners. In accordance with the Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA"), the Company has terminated its real estate development activities and is in the process of selling its remaining real estate investments. In the first quarter of 1997, the Company established a reserve of $1.0 million relating to the divestment of its real estate investment and brokerage subsidiaries, Colebrook Inc. and subsidiaries ("Colebrook"). This amount is included in net expense of real estate operations in the September 30, 1997 Condensed Consolidated Statement of Operations. The $1.0 million reserve consists of $0.7 million in severance and benefit accruals and $0.3 million for other expenses. As of September 30, 1997, no amounts have been paid relating to the divestiture. This divestment is scheduled to be completed by March 31, 1998. 6. Agreement and Plan of Merger On August 18, 1997, the Company and Glastonbury Bank & Trust Company ("GBT") signed a definitive Agreement and Plan of Reorganization and on September 12, 1997 the parties signed a related Agreement and Plan of Merger, under which the Company would acquire all of the outstanding shares of GBT (the "Merger"). GBT is a Connecticut commercial bank that provides a variety of deposit, loan and investments services to small and medium-sized businesses and consumers. As a result of the Merger, GBT will become a wholly owned subsidiary of the Company. The transaction will be accounted for as a pooling of interests and is structured as a tax-free exchange of 0.74 of a share of the Company's common stock for each of GBT's 1,829,920 shares of common stock. The Merger is scheduled to be completed by year end 1997, and is subject to approval of the shareholders of the Company and GBT as well as various regulatory agencies. As of November 10, 1997 the Federal Reserve Bank of Boston and the Federal Deposit Insurance Corporation notified the Company that they had no objections to the notifications filed by the Company to acquire GBT. While the Company does not anticipate any undue delays in receiving the remaining regulatory approvals, as of November 10, 1997 the Company had not yet received the approvals of the Massachusetts Board of Bank Incorporation and the Connecticut Department of Banking. 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION (DOLLARS IN THOUSANDS) Overview SIS Bancorp, Inc., a Massachusetts corporation (the "Company"), was organized by Springfield Institution for Savings (the "Bank") for the purpose of reorganizing the Bank into a holding company structure ("the Reorganization"). Upon the effectiveness of the Reorganization, the Bank became the wholly-owned subsidiary of the Company and the Bank's former stockholders became stockholders of the Company. Substantially all of the Company's operations are conducted through the Bank. The Bank provides a wide variety of financial services which include retail and commercial banking, residential mortgage origination and servicing, and commercial and consumer lending. The Bank's revenues are derived principally from interest payments on its loan portfolios and mortgage-backed and other investment securities. The Bank's primary sources of funds are deposits, borrowings and principal and interest payments on loans and mortgage-backed securities. On August 18, 1997, the Company and Glastonbury Bank & Trust Company ("GBT") signed a definitive Agreement and Plan of Reorganization and on September 12, 1997 the parties signed a related Agreement and Plan of Merger, under which the Company would acquire all of the outstanding shares of GBT (the "Merger"). GBT is a Connecticut commercial bank that provides a variety of deposit, loan and investments services to small and medium-sized businesses and consumers. As a result of the Merger, GBT will become a wholly owned subsidiary of the Company. The transaction will be accounted for as a pooling of interests and is structured as a tax-free exchange of 0.74 of a share of the Company's common stock for each of GBT's 1,829,920 shares of common stock. The Merger is scheduled to be completed by year end 1997, and is subject to approval of the shareholders of the Company and GBT as well as various regulatory agencies. As of November 10, 1997 the Federal Reserve Bank of Boston and the Federal Deposit Insurance Corporation notified the Company that they had no objections to the notifications filed by the Company to acquire GBT. While the Company does not anticipate any undue delays in receiving the remaining regulatory approvals, as of November 10, 1997 the Company had not yet received the approvals of the Massachusetts Board of Bank Incorporation and the Connecticut Department of Banking. The Company has conducted a review of its computer systems to identify those areas that could be affected by the "Year 2000" issue (i.e., that current computer programs use only two digits to identify a year in the date field and cannot reflect a change in the century) and is developing an implementation plan to resolve the issue. A timely resolution of the Year 2000 issue depends largely upon the expertise and advice of outside vendors and consultants retained by the Company to both modify existing software and develop new software to address current deficiencies. The Company is not aware of any obstacles or issues that are presently anticipated in connection with the resolution of the Year 2000 issue that are likely to cause significant operational problems or are otherwise expected to have a material adverse effect on the Company's financial condition or future results of operations. Results of Operations for the Three Months Ended September 30, 1997 and September 30, 1996 The Company reported net income of $3.2 million, or $0.57 per share fully diluted for the three months ended September 30, 1997 as compared to net income of $10.2 million, or $1.84 per share fully diluted for the same period last year. In 1996 financial results for the quarter were affected by two non-recurring tax events totaling $8.0 million. Excluding the impact of these tax items, the Company experienced an increase in pre-tax operating earnings primarily attributable to increased net interest income and noninterest income as well as lower provisions for possible loan losses, partially offset by higher noninterest expense and income tax expense. Net Interest Income Net interest income represents the difference between income on interest-earning assets and expense on interest-bearing liabilities. Net interest income is affected by the mix and volume of assets and liabilities, and the movement and level of interest rates. The Company invests in certain assets that have preferential tax treatment. In order to present yields on a comparable basis, net interest income is presented on a fully taxable equivalent basis for purposes of yield and margin analysis. The following table sets forth, for the period indicated, average balances, interest income and expense, and yields earned or rates paid on the major categories of assets and liabilities. Non-accrual loans have been included in the 8 appropriate average balance loan category, but unpaid interest on non-accrual loans has not been included for purposes of determining interest income. In addition, investment securities available for sale are reflected at amortized cost.
Three Months Ended September 30, ------------------------------------------------------------------------------------------ 1997 1996 --------------------------------------------- ---------------------------------------- Average Average Average Average Yield/ Balance Interest (1) Yield/Cost (1) Balance Interest (1) Cost(1) -------------- --------------- --------------- -------------- ------------ ---------- (Dollars In Thousands) Interest-earning assets: Fed funds sold and short-term investments $ 26,011 $ 357 5.37% $ 9,029 $ 122 5.29% Investment securities held to maturity 180,931 3,169 7.01% 193,415 3,279 6.78% Investment securities available for sale 484,878 8,082 6.67% 353,556 5,975 6.76% Residential real estate loans 235,559 4,766 8.09% 241,064 4,764 7.90% Commercial real estate loans 120,172 2,606 8.67% 119,211 2,596 8.71% Commercial loans 178,298 3,836 8.42% 139,128 3,053 8.59% Home equity loans 128,779 2,587 7.97% 87,201 1,834 8.37% Consumer loans 4,534 163 14.38% 4,373 225 20.58% ----------- --------- ------ ----------- -------- ------ Total interest-earning assets 1,359,162 25,566 7.52% 1,146,977 21,848 7.62% Allowance for loan losses (17,550) (15,195) Non-interest-earning assets 93,694 86,001 ----------- ----------- Total assets $ 1,435,306 $ 25,566 $ 1,217,783 $ 21,848 =========== ========= =========== ======== Interest-bearing liabilities: Deposits Savings accounts $ 206,050 $ 1,165 2.24% $ 196,741 1,236 2.50% NOW accounts (2) 28,284 73 1.02% 56,639 156 1.10% Money manager accounts (2) 31,572 85 1.07% - - 0.00% Money market accounts 206,880 1,736 3.33% 208,641 1,740 3.32% Time deposit accounts 426,855 5,676 5.28% 389,219 5,137 5.25% ----------- --------- ------ ----------- -------- ------ Total interest-bearing deposits 899,641 8,735 3.85% 851,240 8,269 3.86% Borrowed funds 283,242 4,258 5.88% 162,513 2,292 5.52% ----------- --------- ------ ----------- -------- ------ Total interest-bearing liabilities 1,182,883 12,993 4.36% 1,013,753 10,561 4.14% Non-interest-bearing liabilities 150,676 115,809 ----------- ----------- Total liabilities 1,333,559 1,129,562 Total stockholders' equity 101,747 88,221 ----------- ----------- Total liabilities and stockholders' equity $ 1,435,306 $ 12,993 $ 1,217,783 $ 10,561 =========== ========= =========== ======== Net interest income/spread $ 12,573 3.16% $ 11,287 3.48% ========= ====== ======== ====== Net interest margin as a % of interest- earning assets 3.70% 3.94% ====== ====== Tax equivalent adjustment $ 63 $ 42 --------- -------- Net interest income/spread per Condensed Consolidated Statement of Operations $ 12,510 $ 11,245 ========= ======== (1) On a fully taxable equivalent basis. Calculated using a Federal income tax rate of 34% for 1997 and 1996. (2) During July 1997, the Company implemented a program which converted certain NOW accounts to money manager accounts. This program has no effect on the Company's depositors, but has provided additional investable funds to the Company by substantially reducing the reserve balances required to be maintained at the Federal Reserve Bank of Boston.
Net interest income on a fully taxable equivalent basis for the three months ended September 30, 1997 was $12.6 million compared to $11.3 million for the three months ended September 30, 1996, an increase of $1.3 million or 11.4%. This increase was primarily the result of higher levels of interest earning assets partially offset by a decrease of 24 basis points in the net interest margin to 3.70% for the three months ended September 30, 1997 from 3.94% reported for the same period last year. Total interest income was $25.6 million on a fully taxable equivalent basis for the three months ended September 30, 1997, an increase of $3.7 million or 17.0% from the same period last year primarily due to an increase in average interest-earning assets. Average interest-earning assets totaled $1.4 billion in the third quarter of 1997 compared to $1.1 billion in the third quarter of 1996, an increase of $212.2 million or 18.5%. Total investments increased $118.8 million and were funded by higher deposit levels and borrowed funds. Total loans increased $76.4 million as the Company continued to focus on the commercial and home equity market segments, which grew by $39.2 million or 28.2% and $41.6 million or 47.7%, respectively. Residential real estate loan balances declined $5.5 million or 2.3% for 9 the three months ended September 30, 1997, reflecting amortization and prepayments of the existing loan portfolio partially offset by adjustable rate mortgage production. The Company originates long-term fixed rate mortgages for sale in the secondary market and generally holds adjustable rate mortgages in the Company's loan portfolio. Total interest expense was $13.0 million for the three months ended September 30, 1997 compared to $10.6 million during the same period in 1996, an increase of $2.4 million or 23.0%. This increase is attributable to increases in interest-bearing deposits and borrowed funds. Average interest-bearing deposits totaled $899.6 million for the quarter ended September 30, 1997 compared to $851.2 million for the same period in 1996, an increase of $48.4 million or 5.7%. This growth occurred primarily in time deposits which increased $37.6 million largely due to growth in corporate jumbo CD balances. Borrowed funds averaged $283.2 million for the three months ended September 30, 1997 compared to $162.5 million for the same period in 1996 reflecting the use of Federal Home Loan Bank ("FHLB") advances and repurchase agreements to leverage a portion of the Company's capital as well as the match funding of certain fixed rate commercial loans. The following table presents the changes in net interest income (on a fully taxable equivalent basis) resulting from changes in interest rates or changes in the volume of interest-earning assets and interest-bearing liabilities during the periods indicated. Changes which are attributable to both rate and volume have been allocated evenly between the change in rate and volume components. Three months ended September 30, 1997 versus 1996 -------------------------------- Increase (Decrease) Due to -------------------------------- Volume Rate Net ----------- -------- --------- Interest-earning assets: Federal funds sold and interest bearing deposits $ 231 $ 4 $ 235 Investment securities held to maturity (215) 105 (110) Investment securities available for sale 2,204 (98) 2,106 Residential real estate loans (110) 112 2 Commercial real estate loans 21 (11) 10 Commercial loans 851 (68) 783 Home equity loans 855 (102) 753 Consumer loans 7 (69) (62) ------- ------- ------- Total interest-earning assets 3,844 (126) 3,718 ------- ------- ------- Interest-bearing liabilities: Deposits: Savings accounts 56 (127) (71) NOW accounts (76) (7) (83) Money manager account 42 43 85 Money market accounts (15) 11 (4) Time deposit accounts 499 40 539 ------- ------- ------- Total deposits 506 (40) 466 Borrowed funds 1,759 207 1,966 ------- ------- ------- Total interest-bearing liabilities 2,265 167 2,432 ------- ------- ------- Change in net interest income $ 1,579 $ (293) $ 1,286 ======= ======= ======= Provision for Possible Loan Losses The Company's provision for possible loan losses was $0.4 million for the third quarter of 1997 compared to $0.8 million in the third quarter of 1996. The provision for possible loan losses is based upon management's judgment of the amount necessary to maintain the allowance for possible loan losses at a level which is considered adequate. 10 Non-interest Income Non-interest income is composed of fee income for bank services and gains or losses from the sale of assets. The components of non-interest income for the periods presented are as follows: Three months ended September 30, ----------------------------- 1997 1996 ----------- ----------- Net gain on sale of loans $ 136 $ 105 Net gain on sale of securities 10 62 Loan charges and fees 764 943 Deposit related fees 1,801 1,592 Other charges and fees 592 226 ------ ------ $3,303 $2,928 ====== ====== Non-interest income totaled $3.3 million for the third quarter of 1997 compared to $2.9 million for the same period in 1996, an increase of $0.4 million or 12.8%. Deposit related fees increased $0.2 million due to fees associated with the Company's larger non-interest bearing deposit base. Other charges and fees are up $0.4 million due to a recovery of $0.2 million paid by the Massachusetts Thrift Fund for Economic Development, Inc. and $0.1 million from fees associated with Business Manager, a commercial cash management product introduced by the Company in 1997, which involves the funding and management of accounts receivable for small-to-medium sized business customers. Loan charges and fees declined $0.2 million reflecting a decline in commercial loan prepayment fees. Non-interest Expense Salaries and Benefits Expense Salaries and benefits expense totaled $5.0 million for the third quarter of 1997 compared to $4.4 million for the same period in 1996, an increase of $0.6 million reflecting standard wage increases as well as increased staffing related to new branch openings and branch related support. Occupancy Expense of Bank Premises Occupancy expense of bank premises totaled $1.0 million for the third quarter 1997 compared to $0.8 million for the same period in 1996, an increase of $0.2 million. This increase is primarily due to costs associated with the expansion of the retail branch network which includes the opening of five new branches and the addition of three stand alone ATMs since January 1, 1996. 11 Other Operating Expense The components of other operating expense for the periods presented are as follows: Three months ended September 30, ----------------------------- 1997 1996 ----------- ----------- Marketing $ 421 $ 694 Insurance 126 93 Professional services 711 854 Outside processing 1,220 1,035 Other 1,273 1,170 ------ ------ $3,751 $3,846 ====== ====== Other operating expenses totaled $3.8 million for both the third quarters of 1997 and 1996. The $0.3 million decrease in marketing expense reflects a television advertising campaign in 1996 directed towards the Company's consumer strategy. Professional services expense decreased $0.1 million, primarily due to lower levels of legal, consulting, and audit and accounting expenses. Outside processing expense increased $0.2 million, reflecting higher transaction and account volume resulting from the Company s consumer strategy. Foreclosed Real Estate Expense Foreclosed real estate expense reflects losses on sales, writedowns and net operating results of foreclosed properties. These expenses remained relatively flat for the three months ended September 30, 1997 compared to the same period last year. Net Expense of Real Estate Operations The Company's real estate investment and brokerage subsidiary, Colebrook Inc. and its subsidiaries ("Colebrook"), engages in various real estate investments, directly or in joint ventures with unaffiliated partners. In accordance with the Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA"), the Company has terminated its real estate development activities and is in the process of selling its remaining real estate investments. Net expense of real estate operations of $(0.1) million and zero for the three months ended September 30, 1997 and September 30, 1996, respectively, reflect normal operating results. Income Taxes For the three months ended September 30, 1997 the Company recorded income tax expense of $1.9 million compared with an income tax benefit of $6.4 million for the three months ended September 30, 1996. The tax benefit recorded in the third quarter 1996 was influenced by two non-recurring tax events totaling $8.0 million. Exclusive of these events the increase in income tax expense is attributable to a 35.3% increase in pre-tax earnings. 12 Results of Operations for the Nine Months Ended September 30, 1997 and September 30, 1996 The Company reported net income of $8.9 million, or $1.58 per share fully diluted for the nine months ended September 30, 1997 as compared to net income of $15.7 million, or $2.82 per share fully diluted for the same period last year. Net income in 1996 was positively impacted by two non-recurring tax benefits totaling $8.0 million. Excluding the impact of these tax items, the Company experienced an increase in pre-tax operating earnings primarily attributable to increased net interest income as well as lower provisions for possible loan losses, partially offset by higher noninterest expenses and income tax expense. Net Interest Income Net interest income represents the difference between income on interest-earning assets and expense on interest-bearing liabilities. Net interest income is affected by the mix and volume of assets and liabilities, and the movement and level of interest rates. The Company invests in certain assets that have preferential tax treatment. In order to present yields on a comparable basis, net interest income is presented on a fully taxable equivalent basis for purposes of yield and margin analysis. The following table sets forth, for the period indicated, average balances, interest income and expense, and yields earned or rates paid on the major categories of assets and liabilities. Non-accrual loans have been included in the appropriate average balance loan category, but unpaid interest on non-accrual loans has not been included for purposes of determining interest income. In addition, investment securities available for sale are reflected at amortized cost. 13
Nine Months Ended September 30, --------------------------------------------------------------------------------------- 1997 1996 --------------------------------------------- ---------------------------------------- Average Average Average Yield/ Average Yield/ Balance Interest (1) Cost (1) Balance Interest (1) Cost (1) ---------------- -------------- ----------- --------------- -------------- -------- (Dollars In Thousands) Interest-earning assets: Fed funds sold and short-term investments $ 17,812 $ 716 5.30% $ 9,404 $ 380 5.31% Investment securities held to maturity 188,102 9,849 6.98% 186,354 9,494 6.79% Investment securities available for sale 478,910 24,323 6.77% 312,169 15,318 6.54% Residential real estate loans 236,184 14,242 8.04% 246,932 14,557 7.86% Commercial real estate loans 116,200 7,625 8.75% 119,139 7,613 8.52% Commercial loans 172,794 11,173 8.53% 126,587 8,386 8.70% Home equity loans 116,389 6,903 7.93% 77,748 4,911 8.44% Consumer loans 4,445 426 12.78% 6,103 479 10.48% ------------- --------- ------ ------------- -------- ------ Total interest-earning assets 1,330,836 75,257 7.54% 1,084,436 61,138 7.52% Allowance for loan losses (16,633) (15,255) Non-interest-earning assets 92,059 83,851 ------------- ------------- Total assets $ 1,406,262 $ 75,257 $ 1,153,032 $ 61,138 ============= ========= ============= ======== Interest-bearing liabilities: Deposits Savings accounts $ 203,728 $ 3,424 2.25% $ 193,874 $ 3,631 2.50% NOW accounts (2) 48,405 365 1.01% 56,101 485 1.15% Money manager accounts (2) 10,640 85 1.07% - - - Money market accounts 205,972 5,116 3.32% 206,425 5,137 3.32% Time deposit accounts 423,703 16,623 5.25% 377,253 15,085 5.34% ------------- --------- ------ ------------- -------- ------ Total interest-bearing deposits 892,448 25,613 3.84% 833,653 24,338 3.90% Borrowed funds 271,801 11,782 5.72% 129,272 5,439 5.53% ------------- --------- ------ ------------- -------- ------ Total interest-bearing liabilities 1,164,249 37,395 4.29% 962,925 29,777 4.13% Non-interest-bearing liabilities 141,045 106,574 ------------- ------------- Total liabilities 1,305,294 1,069,499 Total stockholders' equity 100,968 83,533 ------------- ------------- Total liabilities and stockholders' equity $ 1,406,262 $ 37,395 $ 1,153,032 $ 29,777 ============= ========= ============= ======== Net interest income/spread $ 37,862 3.25% $ 31,361 3.39% ========= ====== ======== ====== Net interest margin as a % of interest- earning assets 3.79% 3.86% ====== ====== Tax equivalent adjustment $ 303 $ 88 --------- -------- Net interest income/spread per Condensed Consolidated Statement of Operations $ 37,559 $ 31,273 ========= ======== (1) On a fully taxable equivalent basis. Calculated using a Federal income tax rate of 34% for 1997 and 1996. (2) During July 1997, the Company implemented a program which converted certain NOW accounts to money manager accounts. This program has no effect on the Company's depositors, but has provided additional investable funds to the Company by substantially reducing the reserve balances required to be maintained at the Federal Reserve Bank of Boston.
Net interest income on a fully taxable equivalent basis for the nine months ended September 30, 1997 was $37.9 million compared to $31.4 million for the nine months ended September 30, 1997, an increase of $6.5 million or 20.7%. This increase was primarily the result of higher levels of interest earning assets partially offset by a decrease of 7 basis points in the net interest margin to 3.79% for the period ended September 30, 1997 from 3.86% reported for the same period last year. Total interest income was $75.3 million on a fully taxable equivalent basis for the nine months ended September 30, 1997, an increase of $14.1 million or 23.1% from the same period last year primarily due to an increase in average interest-earning assets. Average interest-earning assets totaled $1.3 billion for the nine months ended September 30, 1997 compared to $1.1 billion for the same period in 1996, an increase of $246.4 million or 22.7%. Total investments increased $168.5 million and were funded by higher deposit levels and borrowed funds. Total loans increased $69.5 million as the Company continued to focus on the commercial and home equity market segments, which grew by $46.2 million or 36.5% and $38.6 million or 49.7%, respectively. Residential real estate loan balances declined $10.7 million or 4.4% for the nine months ended September 30, 1997, reflecting amortization and prepayments of the existing loan portfolio partially offset by adjustable rate mortgage production. The Company originates long-term fixed rate mortgages for sale in the secondary market and generally holds adjustable rate mortgages in the Company's loan portfolio. 14 Total interest expense was $37.4 million for the nine months ended September 30, 1997 compared to $29.8 million during the same period in 1996, an increase of $7.6 million or 25.6%. This increase is attributable to increases in interest-bearing deposits and borrowed funds. Average interest-bearing deposits totaled $892.4 million for the nine months ended September 30, 1997 compared to $833.7 million for the same period in 1996, an increase of $58.8 million or 7.1%. This growth occurred primarily in time deposits which increased $46.5 million largely attributable to the introduction of new CD products as well as growth in the corporate jumbo CD portfolio. Borrowed funds averaged $271.8 million for the nine months ended September 30, 1997 compared to $129.3 million for the same period in 1996 reflecting the use of FHLB advances and repurchase agreements to leverage a portion of the Company's capital as well as the match funding of certain fixed rate commercial loans. The following table presents the changes in net interest income (on a fully taxable equivalent basis) resulting from changes in interest rates or changes in the volume of interest-earning assets and interest-bearing liabilities during the periods indicated. Changes which are attributable to both rate and volume have been allocated evenly between the change in rate and volume components. Nine Months Ended September 30, 1997 versus 1996 --------------------------------- Increase (Decrease) Due to --------------------------------- Volume Rate Net ----------- --------- --------- (Dollars In Thousands) Interest-earning assets: Federal funds sold and short term investments $ 339 $ (3) $ 336 Investment securities held to maturity 90 265 355 Investment securities available for sale 8,325 680 9,005 Residential real estate loans (641) 326 (315) Commercial real estate loans (190) 202 12 Commercial loans 3,025 (238) 2,787 Home equity loans 2,366 (374) 1,992 Consumer loans (145) 92 (53) -------- -------- -------- Total interest-earning assets 13,169 950 14,119 -------- -------- -------- Interest-bearing liabilities: Deposits: Savings accounts 175 (382) (207) NOW accounts (62) (58) (120) Money manager accounts 42 43 85 Money market accounts (11) (10) (21) Time deposit accounts 1,840 (302) 1,538 -------- -------- -------- Total deposits 1,984 (709) 1,275 Borrowed funds 6,087 256 6,343 -------- -------- -------- Total interest-bearing liabilities 8,071 (453) 7,618 -------- -------- -------- Change in net interest income $ 5,098 $ 1,403 $ 6,501 ======== ======== ======== Provision for Possible Loan Losses The Company's provision for possible loan losses was $1.2 million for the nine months ended September 30, 1997 compared to $2.2 million for the same period in 1996. The provision for possible loan losses is based upon management's judgment of the amount necessary to maintain the allowance for possible loan losses at a level which is considered adequate. 15 Non-interest Income Non-interest income is composed of fee income for bank services and gains or losses from the sale of assets. The components of non-interest income for the periods presented are as follows: Nine months ended September 30, ------------------------ 1997 1996 --------- -------- Net gain on sale of loans $ 328 $ 537 Net gain on sale of securities 21 64 Loan charges and fees 2,145 2,404 Deposit related fees 5,095 4,539 Other charges and fees 1,293 702 ------ ------ $8,882 $8,246 ====== ====== Non-interest income totaled $8.9 million for the nine months ended September 30, 1997 compared to $8.2 million for the same period in 1996, an increase of $0.6 million or 7.7%. Deposit fees grew $0.6 million due to fees associated with the Company's larger non-interest bearing deposit base. Other charges and fees increased $0.5 million due to $0.2 million in fees associated with the Business Manager, a commercial cash management product introduced by the Company in 1997, a recovery of $0.2 million paid by the Massachusetts Thrift Fund for Economic Development, Inc., and a $0.1 million increase in fees earned in sales of non-deposit investment products. Loan charges and fees decreased $0.3 million due to lower mortgage servicing fees and commercial loan prepayment fees. Net gain on sale of loans decreased $0.2 million due to lower production and sale of fixed rate single family residential mortgage loans. Non-interest Expense Salaries and Benefits Expense Salaries and benefits expense totaled $14.6 million for the nine months ended September 30, 1997 compared to $12.9 million for the same period in 1996, an increase of $1.7 million reflecting standard wage increases, higher Employee Stock Ownership Plan ("ESOP") expenses resulting from an increase in the Company's stock price and additional staffing related to new branch openings and branch related support. Occupancy Expense of Bank Premises Occupancy expense of bank premises totaled $2.9 million for the nine months ended September 30, 1997 compared to $2.4 million for the same period in 1996, an increase of $0.5 million. This increase is primarily due to costs associated with the expansion of the retail branch network which includes the opening of five new branches and the addition of three stand alone ATMs since January 1, 1996. 16 Other Operating Expense The components of other operating expense for the periods presented are as follows: Nine months ended September 30, ------------------------ 1997 1996 --------- -------- Marketing $ 1,418 $ 1,446 Insurance 396 287 Professional services 2,067 2,344 Outside processing 3,497 3,090 Other 3,614 3,450 ------- ------- $10,992 $10,617 ======= ======= Other operating expenses totaled $11.0 million for the nine months ended September 30, 1997 compared to $10.6 million for the same period in 1996, an increase of $0.4 million. Outside processing expense grew $0.4 million, reflecting higher transaction and account volume resulting from the Company's consumer strategy. Professional services expense declined $0.3 million, primarily due to lower levels of legal, consulting, and audit and accounting expenses. Insurance expense was up $0.1 million due to higher FDIC insurance premiums. Foreclosed Real Estate Expense Foreclosed real estate expense reflects losses on sales, writedowns and net operating results of foreclosed properties. These expenses were $0.1 million for the nine months ended September 30, 1997 compared to $0.3 million for the same period in 1996. This $0.2 million decrease reflects increased gains on the sale of foreclosed properties during the nine months ended September 30, 1997 as compared to the same period last year. Net Expense of Real Estate Operations The Company has certain subsidiaries that are engaged in various real estate investments, directly or in joint ventures with unaffiliated partners. In accordance with FDICIA, the Company has terminated its real estate development activities and is in the process of selling its remaining real estate investments. Net expense of real estate operations was $0.4 million for the nine months ended September 30, 1997, an increase of $0.6 million compared to the same period in 1996. In the first quarter of 1997, the Company established a reserve of $1.0 million relating to the divestment of Colebrook which was partially offset by a $0.6 million gain on the sale of a real estate property. The $1.0 million reserve consists of $0.7 million in severance and benefit accruals and $0.3 million for other expenses. As of September 30, 1997, no amounts have been paid relating to the divestiture. This divestment is scheduled to be completed by March 31, 1998. Income Taxes For the nine months ended September 30, 1997 the Company recorded income tax expense of $5.7 million compared with an income tax benefit of $5.9 million for the nine months ended September 30, 1996. The tax benefit recorded in 1996 was impacted by two non-recurring tax events totaling $8.0 million. Exclusive of these events the increase in income tax expense is attributable to a $4.9 million or 50.8% increase in pre-tax earnings. 17 Balance Sheet Analysis - Comparison Of September 30, 1997 To December 31, 1996 Total assets increased from $1.3 billion at December 31, 1996 to $1.5 billion at September 30, 1997. This increase primarily reflects growth in loans and investments funded through an increase in deposits and wholesale borrowings. Investments The Company's investment portfolio increased $43.7 million from $641.5 million at December 31, 1996 to $685.2 million at September 30, 1997. The Company engages in investment activities for both investment and liquidity purposes. The Company maintains an investment securities portfolio which consists primarily of U.S. Government and Agency securities, corporate obligations, asset-backed securities, collateralized mortgage obligations, FHLB stock, and marketable equity securities. Other short-term investments held by the Company periodically include interest-bearing deposits and federal funds sold. The Company also maintains a mortgage-backed securities portfolio consisting of securities issued and guaranteed by the Federal National Mortgage Association ("FNMA") and the Federal Home Loan Mortgage Company ("FHLMC") in addition to publicly traded mortgage-backed securities issued by private financial intermediaries which are rated "AA" or higher by rating agencies of national prominence. Securities which the Company has the intent and ability to hold until maturity are classified as held-to-maturity and are carried at amortized cost, while those securities which have been identified as assets that may be sold prior to maturity or assets for which there is not a positive intent to hold to maturity are classified as available-for-sale and are carried at fair value, with unrealized gains and losses excluded from earnings and reported net of tax as a separate component of stockholders' equity The table below sets forth certain information regarding the amortized cost and fair value of the Company's investment portfolio at the dates indicated.
September 30, 1997 ----------------------------------------------------------------- Available for Sale Held to Maturity ---------------------------- ----------------------------- (Dollars In Thousands) Amortized Amortized Cost Fair Value Cost Fair Value ---------- ---------- ---------- ---------- U.S. Government and Agency obligations $ 11,310 $ 11,322 $ -- $ -- Collateralized mortgage obligations 26,523 26,565 -- -- Mortgage-backed securities 436,938 440,417 134,237 134,365 Asset-backed securities -- -- 47,883 47,972 Other bonds and short term obligations -- -- 200 200 Other securities 23,878 24,564 -- -- -------- -------- -------- -------- Total $498,649 $502,868 $182,320 $182,537 ======== ======== ======== ======== December 31, 1996 ----------------------------------------------------------------- Available for Sale Held to Maturity ---------------------------- ----------------------------- (Dollars In Thousands) Amortized Amortized Cost Fair Value Cost Fair Value ---------- ---------- ---------- ---------- U.S. Government and Agency obligations $ 29,901 $ 29,943 $ -- $ -- Collateralized mortgage obligations 28,965 29,007 -- -- Mortgage-backed securities 371,921 374,218 149,856 149,252 Asset-backed securities -- -- 42,118 42,165 Other bonds and short term obligations 1,681 1,681 200 200 Other securities 14,276 14,474 -- -- -------- -------- -------- -------- Total $446,744 $449,323 $192,174 $191,617 ======== ======== ======== ========
18 Loan Portfolio Composition Gross loans comprised $686.3 million or 47.2% of total assets as of September 30, 1997. The following table sets forth information concerning the Company's loan portfolio in dollar amounts and percentages, by type of loan at September 30, 1997 and at December 31, 1996.
September 30, 1997 December 31, 1996 --------------------------- ------------------------- Percent of Percent of Amount Total Amount Total ----------- ----------- ---------- ---------- (Dollars In Thousands) Residential real estate loans $237,623 34.62% $242,410 38.79% Commercial real estate loans 121,355 17.68% 118,442 18.95% Commercial loans 189,440 27.60% 155,808 24.93% Home equity loans 133,049 19.39% 104,206 16.67% Consumer loans 4,841 0.71% 4,132 0.66% -------- ------ -------- ------ Total loans receivable, gross 686,308 100.00% 624,998 100.00% -------- ------ -------- ------ Less: Unearned income and fees (2,141) (1,196) Allowance for loan losses 18,393 15,597 -------- -------- Total loans receivable, net $670,056 $610,597 ======== ========
The Company continues to actively originate loans secured by first mortgages on one to four family residences, and offers a variety of fixed and adjustable rate mortgage loan products. The Company originates long-term fixed rate mortgages for sale in the secondary market and generally holds adjustable rate mortgages in the Company's loan portfolio. During the nine months ended September 30, 1997, the Company experienced an increase in prepayments in its adjustable rate mortgage portfolio. These prepayments offset new originations and resulted in a $4.8 million decrease in residential real estate balances between December 31, 1996 and September 30, 1997. During the nine months ended September 30, 1997, commercial loan balances increased $33.6 million, reflecting the Company's continued focus on lending activities in the local business market. During this same period commercial real estate loan balances increased $2.9 million primarily due to new originations, partially offset by prepayments. Home equity loans outstanding have increased $28.8 million since December 31, 1996. Management attributes this increase to the active promotion of these products. Non-performing Assets Non-performing assets totaled $4.9 million as of September 30, 1997 compared to $7.6 million as of December 31, 1996, a decrease of $2.7 million or 35.8%. 19 The following table sets forth information regarding the components of non-performing assets for the periods presented: September 30, December 31, 1997 1996 --------------- --------------- (Dollars In Thousands) Non-accrual loans (1): Residential real estate loans $1,703 $1,287 Commercial real estate loans 899 4,428 Commercial loans 1,368 674 Home equity loans 81 157 Consumer loans 7 1 ------ ------ Total non-accrual loans 4,058 6,547 ------ ------ Loans past due 90 days still accruing (2) 121 428 ------ ------ Total non-performing loans 4,179 6,975 Foreclosed real estate (3) 199 381 Restructured loans on accrual status (4) 475 198 ------ ------ Total non-performing assets $4,853 $7,554 ====== ====== Total non-performing loans to total gross loans 0.61% 1.12% Total non-performing assets to total assets 0.33% 0.56% Allowance for possible losses to non-performing loans 440.13% 223.61% (1) Non-accrual loans are loans that are contractually past due in excess of 90 days, for which the Company has stopped the accrual of interest, or loans which are not past due but on which the Compamy has stopped the accrual of interest based on management's assessment of the circumstances surrounding these loans. (2) Accruing loans past due 90 days or more are loans which have not been placed on non-accrual status as, in management's opinion, the collection of the loan, in full, is not in doubt. (3) Foreclosed real estate includes OREO, defined as real estate acquired through foreclosure or acceptance of a deed in lieu of foreclosure. The Company carries foreclosed real estate at the lower of cost or net realizable value, which approximates fair value less estimated selling costs. (4) Restructured loans are loans for which concessions, including reduction of interest rates or deferral of interest or principal payments, have been granted due to the borrower's financial condition. Restructured loans on non-accrual status are reported in the non-accrual loan category. Restructured loans on accrual status are those loans that have complied with terms of a restructuring agreement for a satisfactory period (generally six months). 20 The principal amount of non-performing loans aggregated $4.2 million at September 30, 1997 compared to $7.0 million at December 31, 1996. Interest income that would have been recorded if the loans had been performing in accordance with their original terms aggregated $0.4 million and $0.7 million for the nine months ended September 30, 1997 and 1996, respectively. Interest income recorded on these loans for the nine months ended September 30, 1997 and 1996 was $0.3 million and $0.6 million, respectively The principal amount of restructured loans aggregated $0.5 million at September 30, 1997 compared to $0.2 million at December 31, 1996. Interest income that would have been recorded if the loans had been performing within their original terms aggregated $33 thousand and $15 thousand for the periods ended September 30, 1997 and 1996, respectively. Interest income recorded on these loans amounted to $33 thousand and $2 thousand for the nine months ended September 30, 1997 and 1996, respectively. Watch List Loans The Company maintains a "watch list" of loans, which represents performing loans that have potential weaknesses that require Management's attention. These potential weaknesses may stem from a variety of factors including, among other things, economic or market conditions, adverse conditions in the obligor's operations or financial condition weaknesses. Watch list loans totaled $9.1 million and $18.1 million at September 30, 1997 and December 31, 1996, respectively. Classified Loans The Company's Credit Grade Policy (the "Policy") provides for the classification of loans considered to be lesser quality as "substandard", "doubtful", or "loss" loans. A loan is considered substandard under the Company's Policy if it is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Substandard loans include those characterized by the "distinct possibility" that the Company will sustain "some loss" if the deficiencies are not corrected. Loans classified as doubtful, of which the Company has none, have all of the weaknesses inherent in those classified as substandard with the added characteristic that the weaknesses present make "collection or liquidation in full" on the basis of currently existing facts, conditions and values, "improbable." Loans characterized as loss, of which the Company has none, are those considered "uncollectible" and of such little value that their continuance as bankable assets is not warranted. Classified loans, all of which are categorized substandard, totaled $5.5 million and $7.6 million at September 30, 1997 and December 31, 1996, respectively. Included in these amounts are $4.1 million and $6.5 million of loans which have been reported as non-performing assets at September 30, 1997 and December 31, 1996, respectively. Allowance for Possible Loan Losses The allowance for possible loan losses reflects an amount that, in management's judgment, is adequate to provide for potential losses in the loan portfolio. In addition, examinations of the adequacy of the loan loss reserve are conducted periodically by various regulatory agencies. The allowance for possible loan losses at September 30, 1997 was $18.4 million, compared to $14.9 million at September 30, 1996 reflecting both reduced provisions and charge-offs and increased recoveries during the 1997 period. The activity in the allowance for possible loan losses for the nine months ended September 30, 1997 and 1996 was as follows: 21
Nine Months Ended September 30, -------------------------- 1997 1996 ---------- ---------- (Dollars In Thousands) Balance, beginning of period $ 15,597 $ 14,986 Provision for loan losses 1,203 2,200 Charge-offs: Residential real estate loans (195) (755) Commercial real estate loans (721) (2,255) Commercial loans (387) (355) Home equity loans (113) (190) Consumer loans (196) (61) -------- -------- Total charge-offs (1,612) (3,616) Recoveries: Residential real estate loans 1 594 Commercial real estate loans 2,821 1,036 Commercial loans 272 163 Home equity loans 80 98 Consumer loans 31 27 -------- -------- Total recoveries 3,205 1,918 -------- -------- Net recoveries/(charge-offs) 1,593 (1,698) Balance, end of period $ 18,393 $ 15,488 ======== ======== Ratio of net loan recoveries/(charge-offs) during the period to average loans outstanding during the period 0.25% (0.29%) Ratio of allowance for possible loan losses to total loans at the end of the period 2.68% 2.55% Ratio of allowance for possible loan losses to non-performing loans at the end of the period 440.13% 249.65%
In August 1997, the Company received payment of $3.0 million in full satisfaction of a commercial real estate loan with a net book balance of $1.1 million. Accordingly, $1.9 million was recorded as a recovery to the allowance for possible loan losses. At September 30, 1997, the recorded investment in loans that are considered impaired under SFAS 114 "Accounting by Creditors for Impairment of a Loan" was $3.7 million. Included in this amount is $1.0 million of impaired loans for which the related SFAS 114 allowance is $0.3 million and $2.7 million of impaired loans for which the SFAS 114 allowance is zero. The average recorded investment in impaired loans during the three and nine months ended September 30, 1997 was approximately $7.9 million and $8.7 million, respectively. For the three and nine month periods ended September 30, 1997, the Company recognized interest income on these impaired loans of $0.2 million and $0.5 million, respectively. 22 The following table shows the allocation of the allowance for possible loan losses to the various types of loans as well as the percentage of allowance for possible loan losses in each category to total allowance for possible loan loss.
September 30, 1997 December 31, 1996 -------------------------------------- ------------------------------------ % of % of Total Total Allowance for Allowance for Amount Loan Losses Amount Loan Losses --------- ------------- --------- ------------- Residential real estate loans $ 2,842 15.45% $ 1,540 9.87% Commercial real estate loans 5,542 30.13% 5,808 37.24% Commercial loans 6,875 37.38% 6,711 43.03% Home equity loans 2,391 13.00% 1,207 7.74% Consumer loans 743 4.04% 331 2.12% ------- ------ ------- ------ Total allowance for possible loan losses $18,393 100.00% $15,597 100.00% ======= ====== ======= ======
Deposit Distribution The principal source of funds for the Company are deposits from local consumers and businesses. There were no brokered deposits at September 30, 1997. The Company's deposits consist of demand and NOW accounts, passbook and statement savings accounts, money market accounts and time deposits. Total deposits were $1.0 billion at September 30, 1997 compared to $969.5 million at December 31, 1996, an increase of $52.1 million or 5.4%. This growth occurred primarily in demand deposits, savings accounts and time deposits. Demand deposits and savings accounts increased $18.7 million and $8.6 million, respectively, as customers continue to take advantage of free checking and savings accounts offered as a result of the Company's consumer deposit strategy to attract and retain core deposits, which provide the Company with a lower cost source of funds. The $23.7 million growth in time deposits is primarily attributable to the introduction of new consumer CD products and growth in corporate jumbo CD balances. 23 The following table presents the composition of deposits at the dates indicated:
September 30, 1997 December 31, 1996 --------------------------- ------------------------- Percent of Percent of Amount Total Amount Total ----------- ----------- ---------- ---------- (Dollars In Thousands) Demand deposits $ 119,220 11.67% $100,527 10.37% NOW accounts (1) 25,736 2.52% 57,980 5.98% Money manager accounts (1) 37,718 3.69% -- -- Savings accounts 203,986 19.97% 195,418 20.16% Money market accounts 205,135 20.08% 209,523 21.61% Time deposits 429,818 42.07% 406,069 41.88% ---------- ------ ---------- ------ Total deposits $1,021,613 100.00% $ 969,517 100.00% ========== ====== ========== ====== (1) During July 1997, the Company implemented a program which converted certain Now accounts to money manager accounts. This program has no effect on the Company's depositors, but has provided additional investable funds to the Company by substantially reducing the reserve balances required to be maintained at the Federal Reserve Bank of Boston.
Borrowings Borrowings consist of FHLB advances, securities sold under agreements to repurchase, and loans payable related to the Company's ESOP. The Company generally uses borrowings to fund loan growth and to leverage a portion of its capital position. Borrowings increased $38.0 million from $247.9 million at December 31, 1996 to $285.9 million at September 30, 1997 reflecting a portion of the funding for the growth in loans and investments. Regulatory Capital The Company is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material adverse effect on the Company's financial statements. Under applicable capital adequacy requirements the Company must meet specific minimum capital requirements that involve quantitative measures of the Company's assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Company's capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Quantitative measures established by regulation to ensure capital adequacy require both the Company and the Bank to maintain minimum amounts and ratios (set forth in the table below) of total and Tier 1 capital to risk-weighted assets and Tier 1 capital to average assets. As of September 30, 1997 both the Company and the Bank exceed all capital adequacy requirements to which they are subject and qualify as "well capitalized" under applicable regulations of the Board of Governors of the Federal Reserve System and the FDIC. 24 The Company's and Bank's actual capital amounts and ratios are presented in the table. No deductions were made from capital for interest-rate risk.
Minimum Minimum Requirements Requirements For Capital To Qualify As Actual Adequacy Purposes Well Capitalized ------------------- ------------------- ------------------- Amount Ratio Amount Ratio Amount Ratio -------- ------- -------- ------- --------- ------ As of September 30, 1997: Tier I Capital (to Average Assets) Company $102,169 7.1% $ 57,412 4.0% N/A Bank $100,047 7.0% $ 57,346 4.0% $ 71,682 5.0% Tier I Capital (to Risk Weighted Assets) Company $102,169 11.8% $ 34,592 4.0% $ 51,888 6.0% Bank $100,047 11.6% $ 34,545 4.0% $ 51,818 6.0% Total Capital (to Risk Weighted Assets) Company $113,058 13.1% $ 69,184 8.0% $ 86,480 10.0% Bank $110,936 12.9% $ 69,090 8.0% $ 86,363 10.0% As of December 31, 1996: Tier I Capital (to Average Assets) Company $ 96,317 7.4% $ 52,007 4.0% N/A Bank $ 95,816 7.4% $ 51,999 4.0% $ 64,999 5.0% Tier I Capital (to Risk Weighted Assets) Company $ 96,317 12.8% $ 30,118 4.0% $ 45,177 6.0% Bank $ 95,816 12.7% $ 30,110 4.0% $ 45,165 6.0% Total Capital (to Risk Weighted Assets) Company $105,804 14.1% $ 60,236 8.0% $ 75,296 10.0% Bank $105,300 14.0% $ 60,220 8.0% $ 75,275 10.0%
Interest Rate Risk Management Using management's estimates of asset prepayments and core deposit decay in its computation, the Company estimates that its cumulative one-year gap position was liability sensitive by $14.1 million or 0.97% of total assets at September 30, 1997. The following table sets forth the amounts of assets and liabilities outstanding at September 30, 1997, which are anticipated by the Company to mature or reprice in each of the future time periods shown using certain assumptions based on its historical experience, the current interest rate environment, and other data available to management. Management believes that these assumptions approximate actual experience and considers such assumptions reasonable, however, the interest rate sensitivity of the Company's assets and liabilities could vary substantially if different assumptions were used or actual experience differs from the assumptions used. Management periodically reviews and, when appropriate, changes assumptions used in creating this table. 25
GAP Position At September 30, 1997 ---------------------------------------------------------------------------------- More than six Less than months less six months than one year 1 - 5 Years Over 5 Yrs TOTAL ------------- --------------- ------------- ------------- ----------- (Dollars In Thousands) Assets: Federal funds sold and interest bearing deposits $ 6,692 $ -- $ -- $ -- $ 6,692 Investment securities 315,171 146,524 200,693 22,800 685,188 Residential real estate loans 63,010 52,043 108,204 13,020 236,277 Commercial real estate loans 28,350 17,607 65,985 8,537 120,479 Commercial loans 74,112 9,423 91,791 13,226 188,552 Home equity loans 103,788 1,696 17,260 11,513 134,257 Consumer loans 4,443 35 125 223 4,826 Other assets -- -- -- 76,746 76,746 ---------- ---------- ---------- ---------- ---------- Total assets $ 595,566 $ 227,328 $ 484,058 $ 146,065 $1,453,017 ========== ========== ========== ========== ========== Liabilities & stockholders' equity: Savings accounts $ 30,598 $ 30,598 142,790 $ -- $ 203,986 NOW accounts 9,518 9,518 44,418 -- 63,454 Money market accounts 62,652 61,064 81,419 -- 205,135 Time deposits 249,620 104,311 75,887 -- 429,818 Borrowed funds 167,487 64,018 54,350 -- 285,855 Other liabilities & stockholders' equity 23,818 23,818 71,452 145,681 264,769 ---------- ---------- ---------- ---------- ---------- Total liabilities & stockholders' equity $ 543,693 $ 293,327 $ 470,316 $ 145,681 $1,453,017 ========== ========== ========== ========== ========== Period GAP position $ 51,873 $ (65,999) $ 13,742 $ 384 Net period GAP as a percentage of total assets 3.57% (4.54%) (0.95%) 0.03% Cumulative GAP $ 51,873 $ (14,126) $ (384) - Cumulative GAP as a percentage of total assets 3.57% (0.97%) (0.03%) - Cumulative GAP as a percentage of total interest-earning assets 3.77% (1.03%) (0.03%) - Cumulative interest-earning assets as a percentage of cumulative interest-bearing 114.56% 104.25% 109.99% - liabilities
For purposes of the above interest sensitivity analysis: Residential loans held for sale at September 30, 1997 totaling $9.4 million are in the less than six month interest sensitivity period. Fixed rate assets are scheduled by contractual maturity and adjustable rate assets are scheduled by their next repricing date. In both cases, assets that have prepayment optionality are adjusted for the Company's estimate of prepayments. Loans do not include non-accrual loans of $4.1 million. Loans do not include the allowance for loan loss of $18.4 million. In certain deposit categories where there is no contractual maturity, Management assumed the sensitivity characteristics listed below based on the current interest rate environment and the Company's historical experience. Management reviews these assumptions on a quarterly basis and may modify them as circumstances dictate. - Savings accounts are assumed to decay at an annual rate of 30%. - NOW accounts are assumed to decay at an annual rate of 30%. - Money market accounts are assumed to decay at an annual rate of 60%. - Non-interest bearing accounts of $119.2 million are included in other liabilities and are assumed to decay at an annual rate of 40%. 26 Certain shortcomings are inherent in the method of analysis presented in the foregoing table. For example, while certain assets and liabilities may have similar contractual maturities or periods to repricing, they may react in different ways to changes in market interest rates. Further, in the event of a change in interest rates, prepayment and early withdrawal levels would likely deviate significantly from those assumed in calculating the table. Additionally, certain assets, such as adjustable rate mortgages, have features which restrict changes in interest rates on a short-term basis and over the life of the asset. Finally, the ability of borrowers to service their adjustable rate mortgages may decrease in the event of an interest rate increase. The Company also utilizes income simulation modeling in measuring its interest rate risk and managing its interest rate sensitivity. Income simulation not only considers the impact of changing market interest rates on forecasted net interest income, but also takes into consideration other factors such as yield curve relationships, the volume and mix of assets and liabilities, customer preferences and general market conditions. Liquidity Liquidity measures the ability of the Company to meet its maturing obligations and existing commitments, to withstand fluctuations in deposit levels, to fund its operations and to provide for customer credit needs. If the Company requires funds beyond its ability to generate them internally, it has additional borrowing capacity with the FHLB and collateral eligible for repurchase agreements. Because the Company has a stable retail deposit base, management believes that significant borrowings will not be necessary to maintain its current liquidity position. Management intends to continue seeking opportunities for expansion and believes that the Company's liquidity, capital resources and borrowing capabilities are adequate for its current and intended operations. 27 Part II. OTHER INFORMATION Item 1. Legal Proceedings The Company is involved in litigation arising in the normal course of business. Management does not believe that the ultimate liabilities arising from such litigation, if any, would be material in relation to the consolidated results of operations or financial position of the Company. Item 2. Changes in Securities Not applicable Item 3. Default upon Senior Securities Not applicable Item 4. Submission of Matters to a Vote of Security Holders Not applicable Item 5. Other Information The Company has filed a Form S-3 registration statement with the Securities and Exchange Commission ("SEC") relating to the proposed sale of up to 146,400 shares out of treasury stock. This sale would occur prior to the acquisition of Glastonbury Bank & Trust Company ("GBT") and is meant to reduce the treasury shares to a level that will qualify the acquisition for pooling treatment under applicable accounting rules. The Company has also filed a Form S-4 registration statement relating to its contemplated issuance of up to 1,354,141 shares of stock to GBT shareholders in connection with the pending acquisition of GBT. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: Exhibit No. Exhibit Location (2.1) Agreement and Plan of Reorganization dated August 18, 1997 (i) relating to the acquisition by the Company of Glastonbury Bank & Trust Company (2.2) Agreement and Plan of Merger dated September 12, 1997 (ii) relating to the acquisition by the Company of Glastonbury Bank & Trust Company Locations of Exhibits if not attached hereto: (i) Incorporated by reference to Exhibit 2.1 to Form S-4 registration statement filed with the SEC on October 28, 1997. (ii) Incorporated by reference to Exhibit 2.2 to Form S-4 registration statement filed with the SEC on October 28, 1997. (b) Reports on Form 8-K (1) On August 18, 1997, a Form 8-K was filed with the SEC by the Company relating to (i) an Agreement and Plan of Reorganization entered into by the Company and Glastonbury Bank & Trust Company, which provides for the acquisition of GBT by the Company and (ii) the rescinding of the Company's stock repurchase program which had originally been authorized in January of 1997. (2) On October 22, 1997, a Form 8-K was filed with the SEC by the Company relating to the Company's 10/22/97 press release containing unaudited financial information and announcing a cash dividend for the quarter ending 9/30/97 along with information relating to the Company's previously announced acquisition of Glastonbury Bank & Trust Company. 28 SIGNATURES Under the requirements of the Securities Exchange Act of 1934, as amended, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. SIS BANCORP, INC. (Registrant) November 14, 1997 /s/ F. William Marshall, Jr. Date F. William Marshall, Jr. President and Chief Executive Officer November 14, 1997 /s/ John F. Treanor Date John F. Treanor Executive Vice President and Chief Financial Officer EX-27 2
9 This schedule contains summary financial information extracted from the unaudited financial statements of SIS Bancorp, Inc. at and for the period ended September 30, 1997 and is qualified in its entirety by reference to such financial statements. 1,000 9-Mos Dec-31-1997 Jan-01-1997 Sep-30-1997 34,464 6,692 0 0 502,868 182,320 182,537 670,056 18,393 1,453,017 1,021,613 283,185 38,591 2,670 0 0 57 106,901 1,453,017 40,285 33,954 716 74,955 25,614 37,396 37,559 1,203 21 10,992 14,660 14,660 0 0 8,929 1.60 1.58 3.79 4,058 121 475 9,060 15,597 1,612 3,205 18,393 18,393 0 0
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