UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
(Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
Commission file number 0 - 12784
WESTBANK CORPORATION
(Exact name of registrant as specified in its charter)
Massachusetts 04 - 2830731
(State or other jurisdiction of inc. or org.) (I.R.S. Employer I.D. No.)
225 Park Avenue, West Springfield, Massachusetts 01090-0149
(Address of principal executive offices) (Zip Code)
(413) 747-1400
(Registrant's telephone number, including area code)
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 90 days.
YES X NO
Common stock, par value $2 per share: 3,465,952 shares
outstanding as of April 30, 1997.
<PAGE>
WESTBANK CORPORATION AND SUBSIDIARIES
INDEX
PART I - FINANCIAL INFORMATION
Page
Financial Statements
Condensed Consolidated Balance Sheets 3
Condensed Consolidated Statements of Income 4
Condensed Consolidated Statements of Stockholders' Equity 5
Condensed Consolidated Statements of Cash Flows 6
Notes to Condensed Consolidated Financial Statements 7-8
Management's Discussion and Analysis of Financial Condition and
Results of Operations 9-15
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings 16
ITEM 2. Changes in Rights of Securities Holders 16
ITEM 3. Defaults by Company on its Senior Securities 16
ITEM 4. Results of Votes on Matters Submitted to a Vote
of Security Holders 16
ITEM 5. Other Information 16
ITEM 6. Exhibits and Reports on Form 8-K 16
Signatures 17
<PAGE>
WESTBANK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(Unaudited)
(Dollar amounts in thousands) March 31, 1997 December 31, 1996
<S> <C> <C>
ASSETS
Cash and due from banks:
Non-interest bearing $ 11,397 $ 10,463
Interest bearing 66 48
Federal Funds sold 8,310 12,890
Total cash and cash equivalents 19,773 23,401
Investment securities available for sale 15,942 14,387
Investment securities held to maturity (approximate
market value of $29,483 in 1997 and
$21,357 in 1996) 29,685 21,295
Total securities 45,627 35,682
Loans $ 218,194 $ 215,207
Mortgage loans held-for-sale 5,092 5,466
Allowance for loan losses (2,424) (2,481)
Net-loans 220,862 218,192
Bank premises and equipment 4,427 4,339
Other real estate owned (OREO) - net of
allowance for losses of $195 in
1997 and $195 in 1996 403 337
Accrued interest receivable 1,796 1,636
Other assets 1,606 1,322
TOTAL ASSETS $ 294,494 $ 284,909
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Non-interest bearing $ 43,598 $ 44,715
Interest bearing 220,519 210,776
Total Deposits 264,117 255,491
Borrowed funds 8,394 8,769
Accrued interest payable 356 328
Other liabilities 1,207 576
Total Liabilities 274,074 265,164
Stockholders' Equity:
Common stock - $2 par value
Authorized - 9,000,000 shares
Issued - 3,447,124 shares in 1997 and
3,346,802 shares in 1996 6,894 6,694
Additional paid in capital 7,856 7,633
Retained earnings 5,897 5,517
Net unrealized gain/(loss) on securities available
for sale (227) (99)
Total Stockholders' Equity 20,420 19,745
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 294,494 $ 284,909
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
WESTBANK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollar amounts in thousands)
Three months ended March 31, 1997 1996
(Unaudited)
Income:
Interest and fees on loans $ 4,643 $ 4,335
Interest and dividend income
on securities 670 536
Interest on temporary investments 115 81
Total interest and dividend income 5,428 4,952
Interest expense 2,411 2,071
Net interest income 3,017 2,881
Provision for loan losses 150 140
Net interest income after provision
for loan losses 2,867 2,741
Security gains 0 112
Other non-interest income 506 492
Total non-interest income 506 604
Non-interest expenses:
Salaries and benefits 1,128 1,044
Other real estate-provision for losses 0 131
-operating expenses 8 20
Other non-interest expense 934 940
Occupancy - net 223 217
Total non-interest expense 2,293 2,352
Income before income taxes 1,080 993
Income taxes 443 429
Net Income $ 637 $ 564
Net income per share $ 0.18 $ 0.17
Weighted average shares of common
stock and common share
equivalents 3,514,102 3,351,437
See accompanying notes to condensed consolidated financial statements.
<PAGE>
WESTBANK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
YEAR ENDED DECEMBER 31, 1996 AND THREE MONTHS ENDED MARCH 31, 1997
(1997 Unaudited)
<TABLE>
(Dollar amounts in thousands)
<CAPTION>
UNREALIZED
GAIN
(LOSS) ON
COMMON STOCK ADDT'L. SECURITIES
NUMBER OF PAR PAID IN RETAINED AVAILABLE
SHARES VALUE CAPITAL EARNINGS FOR SALE TOTAL
<S> <C> <C> <C> <C> <C> <C>
BALANCE-DECEMBER 31, 1995 3,221,603 $ 6,443 $ 7,141 $ 4,053 $ 66 $ 17,703
Net income - - - 2,248 - 2,248
Cash dividends declared
(0.24 per share) - - - (784) - (784)
Shares issued:
Stock option plan 30,584 61 25 - - 86
Dividend reinvestment
and stock purchase plan 94,615 190 467 - - 657
Change in unrealized gain
(loss) on securities
available for sale - - - - (165) (165)
BALANCE-DECEMBER 31, 1996 3,346,802 6,694 7,633 5,517 (99) 19,745
Cash Dividend Declared
($0.75 per share) (257) (257)
Shares issued:
Stock Option Plan 72,243 145 43 188
Dividend Reinvestment
and Stock Purchase Plan 28,079 55 180 235
Change in unrealized gain (loss)
on securities available
for sale (128) (128)
Net income 637 637
BALANCE-MARCH 31, 1997 3,447,124 $ 6,894 $ 7,856 $ 5,897 $ (227) $ 20,420
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
WESTBANK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollar amounts in thousands)
Three months ended March 31, 1997 1996
Operating activities:
Net income $ 637 $ 564
Adjustments to reconcile net income to net cash provided by
operating activities:
Provision for loan losses 150 140
Depreciation and amortization 163 140
Provision for other real estate owned 0 131
Decrease (increase) in accrued interest receivable (160) 24
Realized gain on sale of securities 0 (112)
Realized loss on sale of other real estate owned 0 10
Decrease (increase) in other assets (284) 328
Increase in interest payable on deposits 28 16
Increase (decrease) in other liabilities 631 (227)
Net cash provided by operating activities 1,165 1,014
Investing activities:
Investments and mortgage-backed securities:
Held to maturity:
Purchases (11,481) (1,497)
Proceeds from maturities and principal payments 3,091 3,260
Available for sale:
Purchases (1,714) (1,990)
Proceeds from sales 0 3,083
Proceeds from maturities and principal payments 30 0
Purchases of premises and equipment (251) (550)
Net (increase) decrease in loans (2,886) 1,292
Proceeds from sale of other real estate owned 0 102
Net cash provided by (used in) investing activities (13,211) 3,700
Financing activities:
Net increase (decrease) in borrowings (375) 1,513
Net increase (decrease) in deposits 8,626 5,807
Proceeds from exercise of stock options
and stock purchase plan 423 166
Dividends paid (256) (193)
Net cash used by financing activities 8,418 7,293
Increase (decrease) in cash and cash equivalents (3,628) 12,007
Cash and cash equivalents at beginning of year 23,401 12,604
Cash and cash equivalents at end of year $19,773 $24,611
Cash paid during the year:
Interest on deposits and other borrowings 2,383 2,055
Income taxes 155 100
Transfers of loans to other real estate owned 66 864
Sales of other real estate owned financed by the bank 0 72
See notes to consolidated financial statements.
<PAGE>
WESTBANK CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 1997 AND MARCH 31, 1996
(Unaudited)
NOTE A - GENERAL INFORMATION
Westbank Corporation (hereinafter sometimes referred to as
"Westbank" or the "Corporation") is a registered Bank Holding
Company organized to facilitate the expansion and diversification of
the business of Park West Bank and Trust Company (hereinafter
sometimes referred to as "Park West" or the "Bank") into additional
financial services related to banking. Substantially all operating
income and net income of the Corporation are presently accounted for
by Park West.
NOTE B - CURRENT OPERATING ENVIRONMENT
The Corporation operates eleven banking offices located in Hampden
County and also operates a Trust Department providing services
normally associated with holding property in a fiduciary or agency
capacity. A full range of retail banking services are furnished to
individuals, businesses and non-profit organizations. The
Corporation's primary source of revenue is derived from providing
loans to customers, predominately located in Western Massachusetts.
The Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA") imposes significant regulatory restrictions and
requirements on banking institutions insured by the FDIC and their
holding companies. FDICIA established capital categories into which
financial institutions are placed based on capital level. Each
capital category establishes different degrees of regulatory
restrictions which can apply to a financial institution. As of
March 31, 1997, Park West's capital was at a level that placed the
Bank in the "well capitalized" category as defined by FDICIA.
FDICIA imposes a variety of other restrictions and requirements on
insured banks. These include significant regulatory reporting
requirements such as insuring that a system of risk-based deposit
insurance premiums and civil money penalties for inaccurate deposit
assessment reports exists. In addition, FDICIA imposes a system of
regulatory standards for bank and bank holding company operations,
detailed truth in savings disclosure requirements, and restrictions
on activities authorized by state law but not authorized for
national banks.
NOTE C - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial
statements for the first quarter ended March 31, 1997 and 1996 have
been prepared in accordance with generally accepted accounting
principles for interim information and with instructions for Form
10-Q. Accordingly, they do not include all of the information and
notes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating
results for the three month period ended March 31, 1997, are not
necessarily indicative of the results that may be expected for the
year ending December 31, 1997.
For further information, please refer to the Consolidated Financial
Statements and footnotes thereto included in the Westbank
Corporation's Annual Report on Form 10-K for the year ended December
31, 1996.
NOTE D - NET INCOME PER SHARE
Earnings per share were computed by dividing net income by the
weighted average number of shares of common stock outstanding and
common stock equivalent shares arising from unexercised stock
options. The weighted average of common and common stock
equivalents for the periods ended March 31, 1997 and 1996, amounted
to 3,514,102 and 3,351,437 shares, respectively.
<PAGE>
New Accounting Standard
In February, 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128 ("SFAS 128"),
"Earnings Per Share," which establishes new standards for the
computation and disclosure of earnings per share ("EPS"). The new
statement requires dual presentation of "basic" EPS and "diluted"
EPS. Basic EPS is based on the weighted average number of common
shares outstanding for the period, excluding any dilutive common
shares equivalents. Diluted EPS reflects the potential dilution
that could occur if securities or other contracts to issue common
stock were exercised or converted. The Company cannot adopt SFAS
128 until the fourth quarter of fiscal year 1997. Once adopted, all
prior period EPS data must be restated. The effect of SFAS 128, had
it been adopted beginning in fiscal year 1996, would have been to
present basic EPS that would have been greater than EPS actually
reported by $0.01 for the three months ended March 31, 1996 and by
$0.01 for the three month period ended March 31, 1997. The
presentation of diluted EPS would have been the same as EPS actually
reported for the respective periods.
NOTE E - COMMITMENTS AND CONTINGENT LIABILITIES
In the normal course of business, there are outstanding commitments
and contingent liabilities, such as, standby letters of credit and
commitments to extend credit. As of March 31, 1997 standby letters
of credit amounted to $641,000 and loan commitments were $30,118,000
and unused balances available on home equity lines of credit were
$7,859,000.
Trust Assets - Property with a book value of $106,588,000 at March
31, 1997 held for customers in a fiduciary or agency capacity, is
not included in the accompanying balance sheet since such items are
not assets of the Bank.
NOTE F - STOCKHOLDERS' EQUITY
The FDIC imposes leverage capital ratio requirements for state
non-member Banks. The Bank's leverage capital ratio as of March 31,
1997 and December 31, 1996 was 6.83% and 6.93% respectively. In
addition, the FDIC has established risk-based capital requirements
for insured institutions of, Tier 1 risk-based capital of 4.00% and
total risk-based capital of 8.00%. The Bank's risk-based capital at
March 31, 1997, for Tier 1 was 10.15% and total risk-based capital
was 11.40%, which meets the FDIC criteria for a well-capitalized
financial institution.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Changes in Financial Condition -
Total consolidated assets amounted to $294,494,000 on March 31,
1997, compared to $284,909,000 on December 31, 1996. As of March
31, 1997 and March 31, 1996, earning assets amounted to,
respectively, $277,289,000 or 94% of total assets, and $245,828,000,
or 94% of total assets. Earning assets increased during the first
three months of 1997 as a result of increases in securities, loans
and temporary funds. Deposits originated throughout the Bank's
branch system provided the funds to support the increase in earning
assets.
Changes in Results of Operations -
For the quarter ended March 31, 1997, net income totaled $637,000
compared to $564,000 for the three-month period ended March 31,
1996. Included in the results of the 1996 quarter is a gain on the
sale of securities totaling $112,000.
Non-interest expense declined during the first quarter of 1997 by
$59,000 primarily the result of a reduction in other real estate
expenses.
An overall increase in interest income and interest expense reflects
an increase in volume and interest rates on earning assets and
interest-bearing deposits. Further analysis is provided in sections
on net interest revenue and supporting schedules.
Allowance for Loan/Lease Losses and Non-Performing Assets - A slight
increase has been reflected in the provision for loan losses in the
quarter with $150,000 being provided compared to $140,000 in 1996.
Loans and leases written off against the allowance for loan/lease
losses after recoveries amounted to $207,000 for the first three
months of 1997 versus a net recovery of $69,000 for the same period
of 1996.
After giving effect to the actions described above, the allowance
for loan/lease losses at March 31, 1997 totaled $2,424,000 or 1.09%
of total loans/leases, as compared to $2,481,000 or 1.12% at
December 31, 1996.
Non-performing past due loans/leases at March 31, 1997 aggregated
$1,867,000 or 0.84% of total loans/leases compared to $2,361,000 or
1.07% at December 31, 1996. The percentage of non-performing and
past due loans/leases compared to total assets on those same dates,
respectively, amounted to 0.63% and 0.83%.
The change in non-performing loans was primarily the result of the
continued resolution of problem assets.
Other real estate owned declined during the most recent quarter by
$1,455,000 compared to the same period of 1996 and totals $403,000.
The percentage of other real estate owned to total assets as of
March 31, 1997 and March 31, 1996 amounted to 0.14% and 0.71%,
respectively.
Management has made every effort to recognize all circumstances
known at this time which could affect the collectibility of
loan/leases and has reflected these in deciding as to the provision
for loan/lease losses, the writing down of other real estate owned
and impaired loans to fair value and other loans (watch list)
monitored by management, the charge-off of loans/leases and the
balance in the allowance for loan/lease losses. Management deems
that the provision for the quarter, and the balance in the allowance
for loan/lease losses, are adequate based on results provided by the
grading system and circumstances known at this time.
<PAGE>
NET INTEREST INCOME
The Corporation's earning assets include a diverse portfolio of
earning instruments ranging from the Corporation's core business of
loan extensions to interest-bearing securities issued by federal,
state and municipal authorities. These earning assets are financed
through a combination of interest-bearing and interest-free sources.
Net interest income, the most significant component of earnings, is
the amount by which the interest generated by assets exceeds the
interest expense on liabilities. For analytical purposes, the
interest earned on tax exempt assets is adjusted to a "tax
equivalent" basis to recognize the income tax savings which
facilitates comparison between taxable and tax exempt assets.
The Corporation analyzes its performance by utilizing the concepts
of interest rate spread and net yield on earning assets. The
interest rate spread represents the difference between the yield on
earning assets and interest paid on interest-bearing liabilities.
The net yield on earning assets is the difference between the rate
of interest on earning assets and the effective rate paid on all
funds - interest-bearing liabilities, as well as, interest-free
sources (primarily demand deposits and shareholders' equity).
The balances and rates derived for the analysis of net interest
income presented on the following pages reflect the consolidated
assets and liabilities of the Corporation's principal earning
subsidiary, Park West Bank and Trust Company.
(Dollar amounts in thousands)
Quarter ended March 31, 1997 1996
Interest and divided income $5,428 $4,952
Interest expense 2,411 2,071
Net interest income $3,017 $2,881
INTEREST RATE SPREAD AND NET YIELD ON EARNING ASSETS
(Dollar amounts in thousands)
Quarter ended March 31, 1997 1996
Average Average
Balance Rate Balance Rate
Earning Assets $271,129 8.01% $238,565 8.31%
Interest-bearing
liabilities $222,621 4.33% $192,091 4.31%
Interest rate spread 3.68 4.00
Interest-free
resources used to
fund earning assets 48,508 46,474
Total Sources of Funds $271,129 3.56 $238,565 3.47
Net Yield on Earning Assets 4.45% 4.84%
<PAGE>
CHANGES IN NET INTEREST INCOME
(Dollar amounts in thousands)
QUARTER ENDED MARCH 31, 1997
(Taxable Equivalent) O V E R
QUARTER ENDED MARCH 31, 1996
CHANGE DUE TO
VOLUME RATE TOTAL
Interest Income:
Loans/Leases $490 $(182) $308
Securities 122 12 134
Federal funds 29 5 34
Total Interest Earned 641 (165) 476
Interest Expense:
Interest bearing deposits 342 4 346
Other Borrowed Funds (6) 0 (6)
Total Interest Expense $336 $ 4 $340
Net Interest Income $305 $(169) $136
Net interest earned increased to $3,017,000 in the first quarter of
1997, up $136,000 as compared with the comparable period of 1996.
Average earning assets increased by $32,564,000 during the first
quarter of 1997. The average earning base was $271,129,000 compared
to $238,565,000 in the same period last year.
OPERATING EXPENSES
The components of total operating expenses for the periods and their
percentage of gross income are as follows:
<TABLE>
(Dollar amounts in thousands)
<CAPTION>
QUARTER ENDED
3-31-97 3-31-96
Amount Percent Amount Percent
<S> <C> <C> <C> <C>
Salaries and benefits $1,128 19.01% $1,044 18.79%
Other real estate - expense 8 0.13 151 2.72
Other non-interest expense 934 15.74 940 16.92
Occupancy - net 223 3.76 217 3.90
Total Operating Expenses $2,293 38.64% $2,352 42.33%
</TABLE>
<PAGE>
COMPONENTS RATIOS
03/31/97 12/31/96
Ratio of "Tier 1" leverage capital
to total assets at end of period 6.93% 6.93%
Regulatory risk-based capital requirements take into account the
different risk categories of banking organizations by assigning risk
weights to assets and the credit equivalent amounts of off-balance
sheet exposures.
In addition, capital is divided into two tiers. For this
Corporation, Tier 1 includes the common stockholders' equity; Tier
2, or supplementary capital, includes not only the equity, but also,
a portion of the allowance for loan losses, net unrealized
gain/(losses) on securities available for sale are not permitted to
be included for regulatory capital purposes.
The following are the Corporation's risk-based capital ratios at
March 31, 1997:
Tier 1 Capital (minimum required 4.00%) 10.50%
Tier 2 Capital (minimum required 8.00%) 11.75%
INTEREST RATE SENSITIVITY
The following table sets forth the distribution of the repricing of
the Corporation's earning assets and interest bearing liabilities as
of March 31, 1997:
(Dollar amounts in thousands)
Three Over Three Over One Over
Months Months to Year to Five
or Less One Year Five Years Years Total
Earning Assets $61,580 $39,824 $93,99 $81,891 $277,289
Interest Bearing
Liabilities 82,345 67,852 78,716 228,913
Interest Rate
Sensitivity Gap $(20,765) $(28,028) $15,278 $81,891 $ 48,376
Cumulative Interest
Rate
Sensitivity Gap $(20,765) $(48,793) $(33,515) $48,376
Interest Rate
Sensitivity
Gap Ratio (7.48)% (10.11)% 5.51% 29.53%
Cumulative Interest
Rate Sensitivity
Gap Ratio (7.48)% (17.59)% (12.08)% 17.45%
LIQUIDITY
Cash and due from banks, federal funds sold, investment securities,
mortgage-backed securities and loans available for sale, as compared
to deposits and short term liabilities, are used by the Corporation
to compute its liquidity on a daily basis. At March 31, 1997, the
Corporation's ratio of such assets to total deposits and borrowed
funds was 23.47%.
PROVISION AND ALLOWANCE FOR LOAN/LEASE LOSSES
(Dollar amounts in thousands)
Quarter ended March 31, 1997 1996
Balance at beginning of period $ 2,481 $ 3,707
Provision charged to expense 150 140
2,631 3,847
Less Charge-offs:
Loans secured by real estate 84 182
Commercial and industrial loans 131 14
Consumer loans 14 27
229 223
Add-Recoveries:
Loans secured by real estate 19 283
Commercial and industrial loans 1 1
Consumer loans 2 7
Lease financing receivables 0 1
22 292
Net charge-offs (recoveries) 207 (69)
Balance at end of period $ 2,424 $ 3,916
Net Charge-offs (recoveries) to:
Average loans/leases .09% (.03)%
Loans/leases at end of period .09% (.04)%
Allowance for loan/lease losses 8.54% (1.76)%
Allowance for loan/lease losses
as a percentage of:
Average loans/leases 1.09% 1.97%
Loans/leases at end of period 1.09% 2.01%
The approach the Corporation uses in determining the adequacy of the
Allowance for Loan/Lease Losses is the combination of a target
reserve and a general reserve allocation. Quarterly, based on an
internal review of the Loan Portfolio, the Corporation identifies
required reserve allocations targeted to recognized problem loans
that, in the opinion of management, have potential loss exposure or
questions relative to the depth of the collateral on these same
loans. In addition, the Corporation allocates a general reserve
against the remainder of the Loan Portfolio.
<PAGE>
NON-ACCRUAL, PAST DUE AND RESTRUCTURED LOANS
<TABLE>
<CAPTION>
(Dollar amounts in thousands)
03-31-97 12-31-96 09-30-96 06-30-96 03-31-96
<S> <C> <C> <C> <C> <C>
Non-Accrual Loans:
Loans secured by real estate $1,377 $1,697 $1,910 $2,116 $3,172
Construction/Land development 78 4 10 19 464
Commercial and Industrial Loans 238 372 750 856 838
Consumer Loans 14 6 1 1 7
1,707 2,079 2,671 2,992 4,481
Loans Contractually
past due 90 days or more
still accruing:
Loans secured by real estate 70 274 33 0 145
Commercial and Industrial Loans 76 0 6 43 20
Consumer Loans 14 8 0 0 20
160 282 39 43 185
Restructured Loans 0 0 0 78 437
Total non-accrual, past
due and restructured
loans $1,867 $2,361 $2,710 $3,113 $5,103
Non-accrual, past due and
restructured loans
as a percentage of total
loans 0.84% 1.07% 1.26% 1.48% 2.61%
Allowance for loan
losses as a percentage of
non accrual, past due and
restructured loans 129.83% 105.08% 99.09% 85.03% 76.74%
OTHER REAL ESTATE
Other real estate owned - net $403 $337 $793 $1,303 $1,858
Total non-performing assets $2,270 $2,698 $3,503 $4,416 $6,961
Non-performing assets as a
percentage of total assets 0.77% 0.95% 1.24% 1.64% 2.66%
</TABLE>
<PAGE>
WESTBANK CORPORATION AND SUBSIDIARIES
QUARTER TO DATE AVERAGE BALANCES
INTEREST EARNED - INTEREST EXPENSE
<TABLE>
<CAPTION>
(Dollar amounts in thousands)
Three months ended March 31, 1997 1996
Balance Interest Rate Balance Interest Rate
<S> <C> <C> <C> <C> <C> <C>
Federal Funds sold and
temporary investments $8,712 $115 5.28% $6,556 $81 4.94%
Securities 40,619 670 6.60 33,242 536 6.45
Loans/leases 221,798 4,643 8.37 198,767 4,335 8.73
Total earning assets 271,129 $5,428 8.01 238,565 $4,952 8.31
Loan/lease loss allowance (2,537) (3,809)
All other assets 17,493 18,837
TOTAL ASSETS $286,085 $253,593
LIABILITIES AND EQUITY
Interest bearing deposits $215,071 $2,354 4.38 $183,733 $2,008 4.37
Borrowed funds 7,550 57 3.02 8,358 63 3.02
Total interest bearing
liabilities 222,621 $2,411 4.33 192,091 $2,071 4.31
Interest rate spread 3.68% 4.00%
Demand deposits 41,877 42,526
Other liabilities 1,358 1,053
Shareholders' equity 20,229 17,923
TOTAL LIABILITIES
AND EQUITY $286,085 $253,593
Net Interest Income $3,017 $2,881
Interest Earned/Earning Assets 8.01% 8.31%
Interest Expense/Earning Assets 3.56 3.47
Net Yield on Earning Assets 4.45% 4.84%
</TABLE>
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings - None
ITEM 2. Changes in Rights of Securities Holders - None
ITEM 3. Defaults by Company on its Senior Securities - None
ITEM 4. Results of Votes on Matters Submitted to a Vote of Security
Holders - None
ITEM 5. Other Events
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 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.
ITEM 6. Exhibits and Reports on Form 8 - None
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Quarterly Report to be signed on
its behalf by the undersigned thereunto duly authorized.
WESTBANK CORPORATION
/s/ Donald R. Chase
Date: May 12, 1997 Donald R. Chase
President and Chief
Executive Officer
/s/ John M. Lilly
Date: May 12, 1997 John M. Lilly
Treasurer and Chief
Financial Officer
<PAGE>
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