EXHIBIT 99
FOR IMMEDIATE RELEASE
Date: January 23, 1997 Contact: Ting Chang, Vice President
Investor Relations
(413) 748-8271
SIS BANCORP ANNOUNCES 1996 RESULTS, STOCK REPURCHASE, AND
FIRST QUARTERLY DIVIDEND
Company Adopts Shareholder Rights Plan
Springfield, MA - January 23, 1997; 8:30 a.m., SIS Bancorp, Inc.,
(NASDAQ: SISB), the bank holding company for Springfield Institution for Savings
("SIS Bank"), reported today its financial results for the quarter and year
ended December 31, 1996. In addition, the Company declared its first quarterly
cash dividend, and announced the initiation of a share repurchase plan and the
adoption of a shareholder rights plan.
The Company reported net income of $2.5 million, or $0.45 per share
(fully diluted), and $18.2 million, or $3.26 per share (fully diluted), for the
quarter and year ended December 31, 1996. In comparison, the Company reported
net income of $7.6 million and $11.5 million, respectively, for the same periods
in 1995. The financial results for the years ended December 31, 1995 and 1996
were influenced by previously reported nonrecurring tax benefits.
On a pre-tax basis, operating earnings showed a significant increase
over the previous year. For the quarter and year ended December 31, 1996,
pre-tax earnings totaled $4.2 million and $13.9 million, respectively, as
compared to $1.7 million and $5.7 million for the quarter and year ended
December 31, 1995.
"The year, 1996, was marked by tremendous accomplishments for SIS,"
said F. William Marshall, Jr., president and chief executive officer of SIS
Bancorp. "The 1996 financial results set a new record level of earnings for the
Company with operating earnings over 140% higher than in 1995. SIS's strategic
direction is committed to growth, and these results demonstrate the Company's
success in the market and in building a strong, competitive organization," said
Marshall.
At December 31, 1996, total assets were $1.35 billion which represented
a $277.6 million or 26% increase from year end 1995. Gross loans outstanding at
December 31, 1996 totaled $625.0 million and were $51.9 million, or 9%, higher
than at December 31, 1995. The Company's strategic emphasis on commercial and
home equity lending yielded significant increases in these portfolios during the
year. From December 31, 1995, total commercial and industrial loans outstanding
increased by $38.1 million, or 32%, to $155.8 million at December 31, 1996.
Active promotions of the Company's home equity products resulted in a $36.5
million or 54% increase in home equity loans outstanding from December 31, 1995.
The growth in the commercial and home equity portfolios was partially offset by
a reduction in the residential mortgage portfolio from $263.6 million at
December 31, 1995 to $242.4 million at December 31, 1996.
Total deposits at December 31, 1996 were $969.5 million as compared to
$885.4 million at December 31, 1995. The $84.1 million increase in deposits at
December 31, 1996 can be attributed to a combination of the Company's
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competitive strategy of providing superior convenience and value, along with the
addition of 3 new branches during the year. Over 50% of the increase in total
deposits was in non-certificate account categories.
Total stockholders' equity at December 31, 1996 was $101.9 million, or
7.56% of total assets, in comparison to $81.5 million, or 7.61% of total assets,
at December 31, 1995. At December 31, 1996, the Company's Tier 1 Leverage ratio
was 7.41%; on the basis of its regulatory capital ratios, the Company qualifies
as a "well capitalized" institution.
In 1996, the Company continued to make improvements in asset quality.
Total nonperforming assets declined to $7.6 million or 0.56% of total assets at
December 31, 1996. The allowance for possible loan losses totaled $15.6 million
resulting in reserve coverage of 224% of nonperforming loans, 206% of
nonperforming assets, and 2.5% of gross loans.
Higher levels of earning assets contributed to growth in net interest
income during the quarter and year ended December 31, 1996. Net interest income
for the quarter and year ended 1996 was $11.8 million and $43.1 million,
respectively, as compared to $9.4 million and $37.4 million for the same periods
in 1995. Net interest margin for the quarter and year ended December 31, 1996
was 3.85%; in comparison, net interest margin for the quarter and year ended
December 31, 1995 was 3.81% and 4.00 %, respectively.
The provision for possible loan losses was $0.8 million for the quarter
and $3.0 million for the year ended December 31, 1996, as compared to $1.0
million and $4.4 million for the quarter and year ended December 31, 1995.
For the quarter and year ended December 31, 1996, noninterest income
totaled $3.2 million and $11.5 million, respectively, as compared to $1.7
million and $8.1 million, respectively, for the same periods in 1995. During the
year ended December 31, 1996, higher residential loan originations resulted in
increased gains on the sale of fixed rate loans to the secondary market, which
equaled $0.6 million for 1996 as compared to $0.2 million for 1995. Net gain on
sale of securities totaled $0.3 million for the year ended December 31, 1996, as
compared to a net loss of $0.9 million for the year ended December 31, 1995; the
prior year loss was associated with a restructure of the Company's investment
portfolio during the fourth quarter of 1995. Fees and other income for the year
ended 1996 totaled $10.6 million, which represented a 21% increase over the same
period in 1995. This increase resulted from the expansion of the Company's
transaction account base.
Total noninterest expense for the quarter and year ended December 31,
1996 was $10.1 million and $37.7 million, respectively, compared to $8.5 million
and $35.4 million for the same periods in 1995. Operating expenses were 7%
higher during 1996 due to investments made to promote growth and to adequately
serve the Company's increasing customer base.
For the year ended December 31, 1996, the Company had a net tax benefit
of $4.3 million as compared to a net tax benefit of $5.8 million for the year
ended December 31, 1995. During the fourth quarter of 1996, the Company's
effective tax rate was 40%, which resulted in a total income tax expense of $1.7
million; in comparison to the same quarter in 1995, the Company had a net tax
benefit of $5.9 million.
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In addition to reporting earnings, the Company declared its first
quarterly cash dividend in the amount of $0.12 per share payable on February 20,
1997 to shareholders of record as of the close of business on February 3, 1997.
Under the Company's share repurchase program as announced, the Board of
Directors has authorized the purchase of up to 286,180 shares, or up to 5% of
the common stock issued and outstanding as of December 31, 1996. The repurchased
shares will be held in treasury and be available for issuance in connection with
various employee and director benefit programs.
"Over the past two years, SIS Bancorp has demonstrated its ability to
return to a position of strength in the market and to sustain a growing level of
profitability. The Board's confidence in SIS is expressed by the declaration of
our fist quarterly dividend and the authorization of a share repurchase
program," stated Marshall. "The initiation of a dividend and a share repurchase
program should enhance shareholder value while providing sufficient capital to
accommodate future growth."
The Company also announced that the Board of Directors adopted a
shareholder rights plan (the "Rights Plan") on January 22, 1997. Under the terms
of the Rights Plan, which is of a type that has been adopted by many publicly
traded banks and thrifts, each stockholder of record as of the close of business
on February 3, 1997 will receive one right for each share of common stock held
by such stockholder to purchase, upon the occurrence of certain triggering
events, one one-hundredth of a share of preferred stock of the Company at a
purchase price of $100.00. Until and unless the rights are triggered, the rights
will be evidenced by the common stock certificates directly, and will transfer
automatically with any transfer of the common stock. The initial issuance of the
rights has no dilutive effect on the outstanding shares of the Company or the
Company's earnings, is not taxable to the Company or to the stockholders, and
does not otherwise affect the trading of the Company's shares. If the rights are
not triggered or otherwise redeemed by the Board of Directors, the rights will
expire on January 22, 2007.
SIS Bancorp, Inc. is a Massachusetts bank holding company for SIS Bank,
its sole subsidiary. Established in 1827, SIS Bank is the largest depository
institution headquartered in western Massachusetts. The Company serves its
customers through 23 retail branches located in Hampden and Hampshire Counties.
The Company services $1.0 billion in residential mortgages of which $792.4
million is serviced for others. The deposits of the Company are insured by the
FDIC in conjunction with the Deposit Insurance Fund of Massachusetts, a private
excess insurer.
SIS BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands)
December 31, December 31,
1996 1995
------------ -------------
Assets
Cash and due from banks $ 31,902 $ 30,377
Federal funds sold and interest bearing deposits 10,045 8,045
Investment securities available for sale 449,323 246,984
Investment securities held to maturity 192,174 172,793
Residential real estate loans 242,410 263,551
Commercial real estate loans 118,442 118,005
Commercial loans 155,808 117,674
Home equity loans 104,206 67,657
Consumer loans 4,132 6,196
----------- -----------
Total loans 624,998 573,083
Unearned income and fees 1,196 566
Allowance for possible loan losses (15,597) (14,986)
----------- -----------
Total loans, net 610,597 558,663
Accrued interest and dividends receivable 8,982 7,109
Investments in real estate and real estate partnerships 2,757 6,092
Foreclosed real estate, net 381 1,529
Bank premises, furniture and fixtures, net 27,106 25,706
Other assets 15,345 13,680
----------- -----------
Total assets $ 1,348,612 $ 1,070,978
=========== ===========
Liabilities and Stockholders' Equity
Deposits $ 969,517 $ 885,386
Federal Home Loan Bank advances 68,471 41,500
Securities sold under agreements to repurchase 176,577 31,101
Loans payable 2,848 5,470
Mortgage escrow 4,396 4,193
Accrued expenses and other liabilities 24,886 21,859
----------- -----------
Total liabilities 1,246,695 989,509
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 and outstanding: 5,723,600 at December 31, 1996 and 5,710,700
at December 31, 1995) 57 57
Unearned compensation (3,693) (4,937)
Additional paid-in capital 42,665 41,790
Retained earnings 60,993 42,833
Net unrealized gains (losses) on investment securities available for sale 1 ,895 1,726
----------- -----------
Total stockholders' equity 101,917 81,469
----------- -----------
Total liabilities and stockholders' equity $ 1,348,612 $ 1,070,978
=========== ===========
SIS BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands Except Per Share Amounts)
(Unaudited)
Three Months Ended Twelve Months Ended
December December December December
-------- -------- -------- --------
1996 1995 1996 1995
-------- -------- -------- --------
Interest and dividend income
Loans $ 12,711 $ 11,639 $ 48,657 $ 45,536
Investment securities available for sale 6,988 3,796 22,218 12,215
Investment securities held to maturity 3,339 2,818 12,833 10,849
Federal funds sold and interest bearing deposits 189 347 569 1,316
-------- -------- -------- --------
Total interest and dividend income 23,227 18,600 84,277 69,916
-------- -------- -------- --------
Interest expense
Deposits 8,300 8,166 32,638 30,424
Borrowings 3,096 1,024 8,535 2,132
-------- -------- -------- --------
Total interest expense 11,396 9,190 41,173 32,556
-------- -------- -------- --------
Net interest and dividend income 11,831 9,410 43,104 37,360
Less: Provision for possible loan losses 750 1,002 2,950 4,359
-------- -------- -------- --------
Net interest and dividend income after provision
for possible loan losses 11,081 8,408 40,154 33,001
Noninterest income:
Net gain (loss) on sale of loans 67 180 604 243
Net gain (loss) on sale of securities 192 (899) 256 (886)
Fees and other income 2,965 2,432 10,610 8,767
-------- -------- -------- --------
Total noninterest income 3,224 1,713 11,470 8,124
-------- -------- -------- --------
Noninterest expense:
Operating expenses:
Salaries and employee benefits 4,939 4,287 17,839 15,961
Occupancy expense of bank premises, net 904 867 3,291 3,459
Furniture and equipment expense 626 545 2,240 1,943
Other operating expenses 3,582 3,097 14,199 13,768
-------- -------- -------- --------
Total operating expenses 10,051 8,796 37,569 35,131
-------- -------- -------- --------
Foreclosed real estate expense 188 (14) 440 521
Net expense of real estate operations (102) (316) (272) (227)
-------- -------- -------- --------
Total noninterest expense 10,137 8,466 37,737 35,425
Income before income tax expense (benefit) 4,168 1,655 13,887 5,700
Income tax expense (benefit) 1,658 (5,922) (4,273) (5,759)
-------- -------- -------- --------
Net income $ 2,510 $ 7,577 $ 18,160 $ 11,459
======== ======== ======== ========
Earnings per share and pro forma earnings per
share: (1)
Primary $ 0.45 $ 1.43 $ 3.29 $ 2.21
Fully diluted $ 0.45 $ 1.43 $ 3.26 $ 2.19
Weighted average and pro forma weighted
average shares outstanding: (1)
Primary 5,585,063 5,290,930 5,522,594 5,174,037
Fully diluted 5,585,063 5,296,411 5,573,390 5,220,778
<FN>
(1) Net income per share for the three and twelve months ended December 31, 1996 and the three months ended December 31,
1995 is computed on weighted average shares outstanding for the period. Net income per share for the twelve
months ended December 31, 1995 is computed on a pro forma basis as if the conversion of the Bank from mutual to stock
form had been completed as of the beginning of the period presented.
</FN>
SIS BANCORP, INC. AND SUBSIDIARIES
SELECTED FINANCIAL RATIOS AND DATA
For the Three Months Ended
December 31,
1996 1995
------ ------
Financial Ratios:
Fully diluted earnings per share.......................................... $0.45 $1.43
Net interest margin....................................................... 3.85% 3.81%
Fee income / total average assets......................................... 0.91% 0.93%
For the Twelve Months Ended
December 31,
1996 1995
------ ------
Fully diluted earnings per share.......................................... $3.26 $2.19
Net interest margin....................................................... 3.85% 4.00%
Fee income / total average assets......................................... 0.89% 0.89%
At At
December 31, December 31,
1996 1995
------------ ------------
Asset Quality Ratios:
Nonperforming assets to total assets...................................... 0.56% 1.30%
Allowance for possible loan losses to nonperforming loans................. 223.61% 155.71%
Allowance for possible loan losses to total gross loans................... 2.50% 2.61%
Capital Ratios:
Equity to assets ratio.................................................... 7.56% 7.61%
Tier 1 leverage capital ratio............................................. 7.41% 7.57%
Tier 1 risk-based capital ratio........................................... 12.79% 12.52%
Total risk-based capital ratio............................................ 14.05% 13.77%
Book value per share (1).................................................. $18.29 $15.60
December December
1996 1995
--------- -----------
Quarter to Date Average Balance Sheet (in thousands):
Average loans............................................................. $609,106 $554,473
Average earning assets.................................................... 1,228,252 987,826
Average assets............................................................ 1,303,877 1,046,027
Average interest-bearing liabilities...................................... 1,078,452 879,425
Average equity............................................................ 96,774 73,069
<FN>
1) Calculated on the basis of 5,573,390 and 5,220,778 weighted average
shares outstanding on a fully diluted basis for the years ended December
31, 1996 and December 31, 1995.
</FN>