Exhibit 99.1
P R E S S SIS Bancorp
R E L E A S E
FOR IMMEDIATE RELEASE
Date: October 22, 1997 Contact: Ting Chang, Vice President
Investor Relations
(413) 748-8271
SIS Bancorp Reports 35% Increase In Pre-Tax Earnings
Springfield, MA - October 22, 1997, 8:30 a.m. SIS Bancorp, Inc.,
(NASDAQ: SISB), the bank holding Company for Springfield Institution for Savings
("SIS Bank"), reported net income of $3.2 million or $0.57 per share (fully
diluted) for the quarter ended September 30, 1997, and $8.9 million or $1.58 per
share (fully diluted) for the nine months ended September 30, 1997.
For the same periods in 1996, the Company reported net income of $10.2
million and $15.7 million, respectively. Net income in 1996 was positively
influenced by certain non recurring tax benefits. Excluding the impact of these
tax items, pre-tax operating earnings for the quarter and nine months ended
September 30, 1997 increased 35% and 51% respectively over 1996.
In addition to reporting earnings, the Company announced the Board of
Directors' declaration of a quarterly cash dividend payment of $0.14 per share.
The cash dividend will be payable on November 21, 1997 to holders of record as
of the close of business on November 4, 1997.
"We are very pleased to report another quarter of increased core
operating earnings," said F. William Marshall, Jr., president and chief
executive officer of SIS Bancorp. "The results for the quarter reflect our
continued ability to differentiate ourselves in western Massachusetts as the
preferred provider of financial services. As we enter new markets through the
merger with Glastonbury Bank and Trust, we remain focused on activities which
generate growth in customers and build earnings momentum. Through these ends, we
believe SIS will build long term shareholder value."
Total assets at September 30, 1997 equaled $1.5 billion, representing a
$104.4 million increase from December 31, 1996. Expansion in the Company's loan
portfolio has contributed to the growth in total assets since year end 1996. At
September 30, 1997, total gross loans were
$686.3 million, a 10% increase over year end 1996. The increase in total gross
loans is primarily due to the Company's on-going strategic emphasis on
increasing its home equity and commercial lending.
At September 30, 1997, total deposits were $1.0 billion, representing
an increase of $52.1 million or 5% from December 31, 1996. Deposit growth during
the first nine months of 1997 resulted principally from the Company's efforts to
expand its delivery systems and its on-going promotion of the convenience and
value of its products and services.
The Bank's total stockholders' equity at September 30, 1997 totaled
$107.0 million or 7.36% of total assets as compared to $101.9 million or 7.56%
of total assets at December 31, 1996. At September 30, 1997, the Bank's Tier 1
Leverage capital ratio was 7.13%; both the Company and the Bank qualify as
"well-capitalized" under applicable regulatory standards.
During the quarter, asset quality improved. Total nonperforming assets
at September 30, 1997 declined further to $4.9 million or 0.33% of total assets
and represented a $2.7 million reduction from year end 1996. The allowance for
possible loan losses totaled $18.4 million resulting in a reserve coverage ratio
of 440% of nonperforming loans, 379% of nonperforming assets, and 2.68% of total
gross loans outstanding.
For the quarter and nine months ended September 30, 1997, net interest
income was $12.5 million and $37.6 million, respectively. For comparable periods
in 1996, the Company reported net interest income of $11.2 million and $31.3
million. Higher levels of earning assets in 1997 resulted in the increase in net
interest income.
For the quarter and nine months ended September 30, 1997, provision for
possible loan losses totaled $0.4 million and $1.2 million, respectively,
compared to $0.8 million and $2.2 million for the same periods in 1996.
Noninterest income for the quarter and nine months ended September 30,
1997 was $3.3 million and $8.9 million, respectively, as compared to $2.9
million and $8.2 million over the same periods in 1996.
Total noninterest expense for the quarter and nine months ended
September 30, 1997 was $10.3 million and $30.6 million, respectively, as
compared to $9.6 million and $27.6 million for the same periods in 1996. The
increase in total operating expenses for the first nine months of 1997 reflects
costs related to the expansion of the Company's delivery systems, including new
branch locations, an expanded ATM network, and the introduction of new direct
marketing programs.
For the first nine months of 1997, the Company recorded a net expense
of real estate operations of $0.4 million as compared to net income of $0.2
million for the same period in 1996. The increased expense was attributable to
charges, recognized during the first quarter of 1997, in connection with the
Company's continuing divestment of its real estate subsidiary.
Commenting on the status of the acquisition of Glastonbury Bank and
Trust ("GBT"), Marshall indicated that the transaction is on schedule to close
by year end. Marshall further
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noted that the Company would be taking certain steps to accelerate the systems
conversions and full "back office" integration of GBT with SIS. As a result, the
combined companies anticipate taking a pre-tax charge of approximately $4.0
million in merger related expenses during the fourth quarter of 1997. Full
integration is expected to be completed before the end of the first quarter of
1998. The Company's objective is to realize, as soon as possible, the potential
synergies and future earnings related to this merger.
SIS Bancorp, Inc. is a Massachusetts bank holding company for SIS Bank,
its sole subsidiary. Established in 1827, SIS Bank serves its customers through
25 retail branches located throughout Hampden and Hampshire Counties. The Bank
services $1.0 billion in residential mortgages of which $761 million is for
others.
All inquiries may be forwarded to Ms. Ting Chang, vice president
investor relations and corporate planning, at (413) 748-8271.
This news release contains a forward looking statement regarding the
approximate pre-tax charge for merger related expenses, which SIS anticipates
incurring in connection with the acquisition of GBT. SIS cautions readers that
this forward looking statement involves certain risks and uncertainties as
further detailed in SIS' current report on Form 8-K dated October 22, 1997,
which has been filed with the Securities and Exchange Commission.
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