UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K [mark one] [ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 0-12784 WESTBANK CORPORATION Massachusetts 04-2830731 (State of Incorporation) (I.R.S. Employer ID No.) 225 Park Avenue, West Springfield Massachusetts 01090-0149 (Address of principal executive office) (Zip Code) (413) 747-1400 (Telephone Number) Securities registered pursuant to Section 12(b) of the Act: Name of each exchange Title of each class on which registered NONE NONE Securities registered pursuant to Section 12(g) of the Act: Common stock, $2.00 Par Value Preferred stock, $5.00 Par Value (Title of Class) 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 ninety days. Yes X No Based on the closing sales price on March 1, 1997 the aggregate market value of the voting stock held by nonaffiliates of the registrant was $30,575,342. The number of shares outstanding of the registrants common stock, $2.00 par value was 3,445,109 on March 1, 1997. Portions of the Annual Report to Stockholders for the year ended December 31, 1996 are incorporated by reference into Parts I and II. Portions of the Proxy Statement issued by the Corporation in connection with the Annual Meeting to be held on April 16, 1997 are incorporated by reference into Part III. WESTBANK CORPORATION INDEX TO FORM 10-K PART I Item 1 Business I - 1 Item 2 Properties I - 2 Item 3 Legal Proceedings I - 2 Item 4 Submission of Matters to a vote of Security Holders I - 2 PART II Item 5 Market for the Corporation's Common Stock and Related Stockholder Matters II - 1 Item 6 Selected Financial Data II - 1 Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations II - 1 PART III Item 8 Financial Statements and Supplementary Data III - 1 Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure III - 1 Item 10 Directors and Executive Officers of the Registrant III - 1 Item 11 Executive Compensation III - 1 Item 12 Security Ownership of Certain Beneficial Owners and Management III - 1 Item 13 Certain Relationships and Related Transactions III - 1 PART IV Item 14 Exhibits, Financial Statement Schedules and Reports on Form 8-K IV - 1 Signatures IV - 2 Exhibit Index IV - 3 WESTBANK CORPORATION, WEST SPRINGFIELD, MASSACHUSETTS PART I ITEM 1 - BUSINESS Reference is made to Page 4 of the Corporation's Annual Report to Stockholders for the year ended December 31, 1996, wherein this subject is covered. STATISTICAL DISCLOSURE BY BANK HOLDING COMPANIES The following statistical tables and accompanying text provide required financial data about the Corporation and should be read in conjunction with the Consolidated financial statements and related notes, appearing in the 1996 Annual Report to Stockholders and is incorporated herein by reference thereto: Page of Annual Report I. Distribution of Assets, Liabilities and Stockholders' Equity: Interest Rates and Interest Differential 9 Rate/Volume Analysis of Interest Margin on Earning Assets 10 II. Investment Portfolio 11, 26-28 and 37 III. Loan Portfolio 12, 28, 29 and 37 a. Types of Loans 12 b. Maturities and Sensitivities to Changes in Interest Rates 8 and 12 c. Risk Elements 13, 14 and 15 IV. Summary of Loan Loss Experience 13 and 14 V. Deposits 15, 16, 30, 37 and 38 VI. Return on Equity and Assets 16 VII. Short Term Borrowing 16, 31, 37 and 38 I - 1 ITEM 2 - PROPERTIES The Corporation's principal banking subsidiary, Park West Bank and Trust Company ("Park West") operates eleven banking offices located as follows: LOCATION OWNED LEASED TOTAL Agawam (Feeding Hills) 1 1 Chicopee 1 1 Chicopee - Supermarket 1 1 East Longmeadow 1 1 East Longmeadow - Supermarket 1 1 Holyoke 1 1 West Springfield 2 1 3 Westfield 1 1 Westfield - Supermarket 1 1 TOTAL 5 6 11 All general banking offices except the one in Holyoke have drive-in facilities. Twenty-four hour automated teller machines are located in the three West Springfield branches, one each in Agawam, Chicopee, East Longmeadow, Westfield and the Banks three supermarket branches. Title to the properties described as owned in the foregoing table is held by the Bank with warranty deed with no material encumbrances. Park West owns, with no material encumbrances, land adjacent to the main office which is available for parking, and also through a subsidiary, owns one other property consisting of land, also used as a parking lot adjacent to the main office. The Corporation also owns the property on which its former Operations Center was located and is presently leased. In addition, the Bank holds other real estate as a result of foreclosure proceedings. All of the property described as leased in the foregoing table is leased directly from independent parties. Management considers the terms and conditions of each of the existing leases to be in the aggregate favorable to the Bank. ITEM 3 - LEGAL PROCEEDINGS Certain litigation is pending against the Corporation and the Bank. Management, after consultation with legal counsel, does not anticipate that any liability arising out of such litigation will have a material effect on the Corporation's Financial Statements. ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS NONE I - 2 PART II ITEM 5 - MARKET FOR CORPORATION'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS Reference is made to the inside back cover of the Corporation's Annual Report to Stockholders for the year ended December 31, 1996, wherein this subject is covered. Information Concerning Forward-Looking Statements. Westbank has made and may make in the future forward looking statements concerning future performance, including but not limited to future earnings, and events or conditions which may affect such future performance. These forward looking statements are based upon management's expectations and belief concerning possible future developments and the potential effect of such future developments on Westbank. There is no assurance that such future developments will be in accordance with management's expectations and belief or that the effect of any future developments on Westbank will be those anticipated by Westbank management. All assumptions that form the basis of any forward looking statements regarding future performance, as well as events or conditions which may affect such future performance, are based on factors that are beyond Westbank's ability to control or predict with precision, including future market conditions and the behavior of other market participants. Among the factors that could cause actual results to differ materially from such forward looking statements are the following: 1. The status of the economy in general, as well as in Westbank's prime market area, Western Massachusetts; 2. The recovery of the real estate market in Western Massachusetts; 3. Competition in Westbank's prime market area from other banks, especially in light of continued consolidation in the New England banking industry. 4. Any changes in federal and state bank regulatory requirements; 5. Changes in interest rates; and 6. The cost and other effects of unanticipated legal and administrative cases and proceedings, settlements and investigations. While Westbank periodically reassesses material trends and uncertainties affecting the Corporation's performance in connection with is preparation of management's discussion and analysis of results of operations and financial condition contained in its quarterly and annual reports, Westbank does not intend to review or revise any particular forward looking statement in light of future events. ITEM 6 - SELECTED FINANCIAL DATA Reference is made to page 5 of the Corporation's Annual Report to Stockholders for the year ended December 31, 1996, wherein this subject is covered. ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Reference is made to pages 6 through 18 of the Corporation's Annual Report to Stockholders for the year ended December 31, 1996, wherein this subject is covered. II - 1 PART III ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Reference is made to pages 20 through 39 of the Corporation's Annual Report to Stockholders for the year ended December 31, 1996, wherein this subject is covered. ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE NONE ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Reference is made to pages 3 through 6, of the Corporation's Proxy Statement to Stockholders for the 1997 Annual Meeting scheduled for April 16, 1997, wherein this subject is covered. ITEM 11 - EXECUTIVE COMPENSATION References is made to pages 8 through 12, of the Corporation's Proxy Statement to Stockholders for the 1997 Annual Meeting scheduled for April 16, 1997, wherein this subject is covered. ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Reference is made to pages 6 and 7, of the Corporation's Proxy Statement to Stockholders for the 1997 Annual Meeting scheduled for April 16, 1997, wherein this subject is covered. ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Reference is made to pages 6 through 15, of the Corporation's Proxy Statement to Stockholders for the 1997 Annual Meeting scheduled for April 16, 1997, wherein this subject is covered under the caption "Beneficial Ownership of Stock and Executive Compensation - Miscellaneous". III - 1 PART IV ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K The following documents are filed as a part of this report: 1. Financial Statements The following financial statements are incorporated in this Annual Report on Form 10-K by reference to the Corporation's Annual Report to Stockholders for the year ended December 31, 1996: WESTBANK CORPORATION Page of Annual Report Independent Auditors' Reports 19 Consolidated Balance Sheets at December 31, 1996 and 1995 20 Consolidated Statements of Income for the years ended December 31, 1996, 1995 and 1994 21 Consolidated Statement of Stockholders' Equity from January 1, 1994, to December 31, 1996 22 Consolidated Statements of Cash Flows for the years ended December 31, 1996, 1995 and 1994 23 Notes to Consolidated Financial Statements 24 - 39 A current report on Form 8-K Reporting other Events was filed by the Registrant on: NONE 2. Financial Statement Schedules Financial Statement Schedules are omitted because they are inapplicable or not required. 3. Exhibits See accompanying Exhibit Index. IV - 1 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. WESTBANK CORPORATION By: "/s/ Donald R. Chase" Donald R. Chase, President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons in the capacities and on the dates indicated. Signature Title Date President and Chief "/s/ Donald R. Chase" Executive Officer and Director March 19, 1997 Donald R. Chase Chairman of the Board "/s/ Alfred C. Whitaker" and Director March 19, 1997 Alfred C. Whitaker Treasurer and Chief Financial "/s/ John M. Lilly" Officer March 19, 1997 John M. Lilly "/s/ Roland O. Archambault" Director March 19, 1997 Roland O. Archambault "/s/ Mark A. Beauregard" Director March 19, 1997 Mark A. Beauregard "/s/ David R. Chamberland" Director March 19, 1997 David R. Chamberland "/s/ John E. Fitzgerald" Director March 19, 1997 John E. Fitzgerald "/s/ Leroy F. Jarrett" Director March 19, 1997 Leroy F. Jarrett Vice Chairman of the Board "/s/ Ernest N. Laflamme, Jr." and Director March 19, 1997 Ernest N. Laflamme, Jr. "/s/ Russell Mawdsley" Director March 19, 1997 Russell Mawdsley "/s/ Paul J. McKenna" Director March 19, 1997 Paul J. McKenna "/s/ Robert J. Perlak" Corporate Clerk and Director March 19, 1997 Robert J. Perlak Director March 19, 1997 James E. Tremble IV - 2 EXHIBIT INDEX Page No. 3. Articles of Organization, as amended ** (a) Articles of Organization, as amended * (b) By-Laws, as amended * 10.1 Employment Contract dated October 1, 1986, between William A. Franks, Jr. and Westbank Corporation *** 10.12 Termination Agreement dated February 20, 1987, between Donald R. Chase and Park West Bank and Trust Company *** 10.14 Termination Agreement dated February 20, 1987, between Stanley F. Osowski and CCB, Inc. *** 10.15 1985 Incentive Stock Option Plan for Key Employees * 10.16 1995 Directors Stock Option Plan **** 10.17 1996 Stock Incentive Plan ***** 13. 1995 Annual Report to Stockholders ARS (IFC 1-36 IBC) 21. Subsidiaries of Registrant TO BE INCLUDED 27. Financial Data Schedule TO BE INCLUDED * Incorporated by reference to identically numbered exhibits contained in Registrant's Annual Report on Form 10-K for the year ended December 31, 1988 ** Incorporated by reference to identically numbered exhibits contained in Registrant's Annual Report on Form 10-K for the year ended December 31, 1987 *** Incorporated by reference to identically numbered exhibits contained in Registrant's Annual Report on Form 10-K for the year ended December 31, 1986 **** Incorporated by reference to identically numbered exhibits contained in Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 ***** Incorporated by reference to identically numbered exhibits contained in Registrant's 1996 Proxy Statement IV - 3