SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 18, 1997
SIS Bancorp, Inc.
(Exact name of registrant as specified in charter)
Massachusetts 000-20809 04-3303264
(State or other (Commission file (IRS employer
jurisdiction of number) identification no.)
incorporation)
1441 Main Street, Springfield, MA 01102
(Address of principal executive offices) (Zip code)
(413) 748-8000
Registrant's telephone number, including area code
Item 5. Other Events
On August 18, 1997, SIS Bancorp, Inc. (the "Company") entered into an
Agreement and Plan of Reorganization (the "Agreement") which provides for, among
other things, the acquisition (the "Acquisition") of Glastonbury Bank and Trust
Company ("Glastonbury") by the Company.
In connection with the Acquisition, the Board of Directors of the
Company has rescinded its prior authorization, granted in January of 1997, for
the Company to repurchase up to 286,180 shares of its common stock, effective
immediately. In the event that the Acquisition is not consummated, the Company's
Board of Directors would consider reinstating the share repurchase program.
Glastonbury's executive officers and directors, who, according to
Glastonbury's 1997 proxy statement, hold 428,037 shares of Glastonbury common
stock, or approximately 23.39% of the currently outstanding shares of
Glastonbury common stock, have agreed in a separate letter agreement to vote all
of their shares in favor of the Acquisition Merger and against any other
competing transaction.
A copy of the Company's news release relating to the Acquisition is
filed as Exhibit 99.1 to this report and is incorporated herein by reference.
The Company has scheduled a telephonic meeting with financial analysts
and others with respect to the Acquisition. Certain financial and other
information prepared for dissemination during such meeting is filed as Exhibit
99.2 to this report.
Cautionary Statements Relating to Certain Forward Looking Statements
This Current Report and the exhibits filed herewith contain certain
forward-looking statements, including, but not limited to, statements concerning
plans, objectives, future events or performance, assumptions and statements
relating to cost savings, enhanced revenues, and accretion to reported earnings
that may be realized from the Acquisition as well as other statements which are
other than statements of historical fact. The Company cautions 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.
Economic Conditions and Real Estate Risk. The Company's lending
operations are concentrated primarily in western Massachusetts and Glastonbury's
lending operations are concentrated in central Connecticut. As a result, the
financial condition and results of operations of the combined company will be
subject to the effects of changes in the business cycle and downturns in the
local, regional and national economies, as well as other general economic
conditions, particularly, conditions that may affect residential real estate and
commercial lending in the market areas specified above. In an economic downturn,
there also tends to be a run-off in
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deposits. If economic conditions in the combined company's market area
deteriorate, the combined company may not be able to originate the volume of
high quality residential mortgage loans and/or loans to small and medium-sized
businesses or achieve the level of deposits on which the forward-looking
statements are based.
The Connecticut economy and its real estate market have showed signs of
stabilization over the past two years from the recessionary levels of the early
1990's. Consequently Glastonbury's delinquencies, non-performing assets and loss
provisions improved from earlier periods. The forward-looking statements
regarding Glastonbury's results of operations assume that the Connecticut
economy and real estate market will remain stable. A worsening of current
economic conditions or a significant decline in real estate values in
Connecticut could cause actual results to vary materially from the
forward-looking statements.
Similarly, the Massachusetts economy and its real estate market showed
signs of recovery beginning in 1994 from earlier recessionary levels, and
consequently the Company's delinquencies, non-performing assets and loss
provisions improved from earlier periods. The forward-looking statements
regarding the Company's results of operations assume that the Massachusetts
economy and real estate market will remain stable. A worsening of current
economic conditions or a significant decline in real estate values in
Massachusetts could cause actual results to vary materially from the
forward-looking statements.
Interest Rate Risk. The Company and Glastonbury both realize their
income principally from the differential between the interest earned on loans
and investment securities and the interest paid on deposits and borrowings. The
net interest spreads of each organization are affected by the difference between
the repricing characteristics of their interest-earning assets and
interest-bearing liabilities. Loan and investment volumes and yields, deposits
and borrowings are also affected by market interest rates. Changes in interest
rates could cause the combined company's earnings to vary materially from the
forward-looking statements.
Operational Issues. The forward-looking statements utilize
Glastonbury's internal estimates of growth and results of operations and
generally make no provision for any possible negative effects of the
Acquisition. In addition, the forward-looking statements estimate certain cost
savings from the consolidation of various "back office" functions of the two
companies, which may not materialize or which may be delayed as a result of
difficulties in consolidating such functions. To the extent that events differ
from the assumptions, actual results of operations may vary materially from the
forward-looking statements.
The ability of the combined company to operate efficiently, at least in
the short term, will be enhanced by the ability to retain certain existing
management personnel. If the Company is not able to retain certain key
management personnel of Glastonbury, the intended consolidation of the "back
office" functions of the two companies may be more time-consuming, difficult and
expensive, and may negatively affect the predicted cost savings.
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The forward-looking statements assume that the deposit base of both the
Company and Glastonbury will remain substantially intact pending the Acquisition
and will grow at historical rates following the Acquisition. To the extent that
the change in ownership of Glastonbury or other factors result in either a
temporary or long-term loss of deposits, actual results of operations may vary
materially from the forward-looking information presented.
Competition. The Company and Glastonbury both face significant
competition in their respective markets. Increasing consolidation within the
banking and financial services industry, as well as increased competition from
larger regional and out-of-state banking organizations and nonbank providers of
various financial services, may adversely affect the combined company's ability
to meet its financial goals. Many of these large competitors have more
significant financial resources, larger market share and greater name
recognition in the market area served by the combined company than the combined
company will itself have. The existence of such competitors may make it
difficult for the combined company to achieve the financial goals reflected in
the forward-looking statements.
Laws and Regulations. The businesses of the Company and Glastonbury are
subject to federal and state regulation. Changes in laws and regulations,
including federal and state banking laws and regulations, with which the Company
and its subsidiaries must comply, and the associated costs of compliance with
such laws and regulations, could cause actual results to vary from the
forward-looking statements. Changes in accounting policies and practices, as may
be adopted by applicable regulatory agencies as well as by the Financial
Accounting Standards Board, or in the Company's post-closing organization,
compensation and benefit plans also could cause actual results to vary from the
forward-looking statements.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
99.1 News Release of the Company, dated August 18, 1997
99.2 Analyst Meeting Materials.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
SIS Bancorp, Inc. has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SIS BANCORP, INC.
Date: August 18, 1997 By:/s/ John F. Treanor
Name: John F. Treanor
Title: Executive Vice President
and Chief Financial Officer
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