1
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, 1999
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
Identification Number)
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
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
Based on the closing sales price on March 1, 2000 the aggregate market value of
the voting stock held by nonaffiliates of the registrant was $37,923,931.
The number of shares outstanding of the registrants common stock, $2.00 par
value was 4,273,119 on March 1, 2000.
Portions of the Annual Report to Stockholders for the year ended December 31,
1999 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 19, 2000 are incorporated by reference into
Part III.
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WESTBANK CORPORATION
INDEX TO FORM 10-K
PART I
Item 1 Business I-1
Item 2 Properties I-2
Item 3 Legal Proceedings I-3
Item 4 Submission of Matters to a vote of Security Holders I-3
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 Accountant
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
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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, 1999, 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 1999
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 and 10
Rate/Volume Analysis of Interest Margin on Earning Assets 11
II. Investment Portfolio 12, 28, 29 and 39
III. Loan Portfolio 13, 29, 30 and 39
a. Types of Loans 13
b. Maturities and Sensitivities to Changes in Interest Rates 8, 9 and 13
c. Risk Elements 8, 14, 15, 16, 29 and 30
IV. Summary of Loan Loss Experience 14 and 15
V. Deposits 16, 31 and 39
VI. Return on Equity and Assets 17
VII. Short Term Borrowing 17, 31, 32 and 38
I - 1
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ITEM 2 PROPERTIES
The Corporation had two principal banking subsidiaries, Park West Bank and Trust
Company ("Park West") and Cargill Bank ("Cargill"). Park West operates thirteen
banking offices located in western Massachusetts, 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
- - - - - - - - - - - - - - - - - -----------------------------------------------------------------
Ludlow 1 1
- - - - - - - - - - - - - - - - - -----------------------------------------------------------------
Southwick 1 1
- - - - - - - - - - - - - - - - - -----------------------------------------------------------------
West Springfield 2 1 3
- - - - - - - - - - - - - - - - - -----------------------------------------------------------------
Westfield 1 1
- - - - - - - - - - - - - - - - - -----------------------------------------------------------------
Westfield - Supermarket 1 1
- - - - - - - - - - - - - - - - - -----------------------------------------------------------------
TOTAL 6 7 13
=================================================================
All banking offices except the one in Holyoke have drive-in facilities and
twenty-four hour automated teller machines.
Title to the properties described as owned in the foregoing table is held by
Park West 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, through a subsidiary, also owns one other property adjacent to
the main office consisting of land also used as a parking lot.
Cargill operates five banking offices located in northeast Connecticut, as
follows:
=================================================================
LOCATION OWNED LEASED TOTAL
- - - - - - - - - - - - - - - - - -----------------------------------------------------------------
Putnam 1 1 2
- - - - - - - - - - - - - - - - - -----------------------------------------------------------------
Woodstock 1 1
- - - - - - - - - - - - - - - - - -----------------------------------------------------------------
Quinebaug 1 1
- - - - - - - - - - - - - - - - - -----------------------------------------------------------------
Danielson 1 1
- - - - - - - - - - - - - - - - - -----------------------------------------------------------------
TOTAL 3 2 5
=================================================================
All general banking facilities have drive-in facilities and twenty-four hour
automated teller machines. Title to the properties described as owned in the
foregoing table is held by Cargill with warranty deed with no material
encumbrances.
I-2
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ITEM 3 LEGAL PROCEEDINGS
Certain litigation is pending against the Corporation and the its subsidiaries.
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-3
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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, 1999, wherein this subject is
covered.
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, 1999, 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 19 of the Corporation's Annual Report to
Stockholders for the year ended December 31, 1999, 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
primary market areas, western Massachusetts and northeastern
Connecticut;
2. The real estate market in western Massachusetts and
northeastern Connecticut;
3. Competition in Westbank's primary 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 its 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.
II-1
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PART III
ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Reference is made to Pages 20 through 42 of the Corporation's Annual Report to
Stockholders for the year ended December 31, 1999, 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 4 through 8 of the Corporation's Proxy Statement to
Stockholders for the 2000 Annual Meeting scheduled for April 19, 2000, wherein
this subject is covered.
ITEM 11 EXECUTIVE COMPENSATION
References is made to Pages 8 through 11 of the Corporation's Proxy Statement to
Stockholders for the 2000 Annual Meeting scheduled for April 19, 2000, 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 2000 Annual Meeting scheduled for April 19, 2000, wherein
this subject is covered.
ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Reference is made to Pages 6 through 13, of the Corporation's Proxy Statement to
Stockholders for the 2000 Annual Meeting scheduled for April 19, 2000, wherein
this subject is covered under the caption "Beneficial Ownership of Stock and
Executive Compensation - Miscellaneous".
III - 1
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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,
1999:
WESTBANK CORPORATION
Page of
Annual
Report
-------
Independent Auditors' Reports 43
Consolidated Balance Sheets at December 31, 1999 and 1998 20
Consolidated Statements of Income for the years ended
December 31, 1999, 1998 and 1997 21
Consolidated Statement of Stockholders' Equity from January 1, 1997,
to December 31, 1999 22
Consolidated Statements of Comprehensive Income for the years
ended December 31, 1999, 1998 and 1997 22
Consolidated Statements of Cash Flows for the years ended
December 31, 1999, 1998 and 1997 23
Notes to Consolidated Financial Statements 24 - 42
Current reports on Form 8-K Reporting other Events were 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
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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
- - - - - - - - - - - - - - - - - --------- ----- ----
/s/ Donald R. Chase President and
- - - - - - - - - - - - - - - - - ----------------------------- Chief Executive Officer and Director March 17, 2000
Donald R. Chase
/s/ Ernest N. Laflamme, Jr. Chairman of the Board
- - - - - - - - - - - - - - - - - ----------------------------- and Director March 17, 2000
Ernest N. Laflamme, Jr.
/s/ John M. Lilly Treasurer and
- - - - - - - - - - - - - - - - - ----------------------------- Chief Financial Officer March 17, 2000
John M. Lilly
/s/ Roland O. Archambault Director March 17, 2000
- - - - - - - - - - - - - - - - - -----------------------------
Roland O. Archambault
/s/ Mark A. Beauregard Director March 17, 2000
- - - - - - - - - - - - - - - - - -----------------------------
Mark A. Beauregard
/s/ David R. Chamberland Director March 17, 2000
- - - - - - - - - - - - - - - - - -----------------------------
David R. Chamberland
Director March 17, 2000
- - - - - - - - - - - - - - - - - -----------------------------
Leroy F. Jarrett
/s/ G. Wayne McCary Director March 17, 2000
- - - - - - - - - - - - - - - - - -----------------------------
G. Wayne McCary
/s/ Robert J. Perlak Corporate Clerk and Director March 17, 2000
- - - - - - - - - - - - - - - - - -----------------------------
Robert J. Perlak
/s/ George R. Sullivan Director March 17, 2000
- - - - - - - - - - - - - - - - - -----------------------------
George R. Sullivan
/s/ James E. Tremble Director March 17, 2000
- - - - - - - - - - - - - - - - - -----------------------------
James E. Tremble
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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