UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
Commission file number 0-15366
ALLIANCE FINANCIAL CORPORATION
(Exact name of Registrant as specified in its charter)
New York 16-1276885
(State or other jurisdiction of (IRS Employer I.D. #)
incorporation or organization)
65 Main Street, Cortland, New York 13045
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (607) 756-2831
Indicate by check mark whether the Registrant (1) has filed all reports 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
The number of shares outstanding of the registrant's common stock on November 5,
1999: Common Stock, $1.00 Par Value - 3,558,011 shares.
<PAGE>
CONTENTS
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Condition as of September 30, 1999 and
December 31, 1998
Consolidated Statements of Income for the Three Months Ended
September 30, 1999 and 1998 and Nine Months Ended September 30,
1999 and 1998
Consolidated Statements of Comprehensive Income for the Three
Months Ended September 30, 1999 and 1998 and Nine Months Ended
September 30, 1999 and 1998
Consolidated Statements of Changes in Shareholders' Equity for
the Nine Months Ended September 30, 1999
Consolidated Statements of Cash Flows for the Nine Months Ended
September 30, 1999 and 1998
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of the Financial Condition
and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
<PAGE>
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ALLIANCE FINANCIAL CORPORATION
Consolidated Statements of Condition
(Dollars in Thousands)
<TABLE>
<CAPTION>
September 30, 1999 December 31, 1998
(Unaudited) (Note)
<S> <C> <C>
ASSETS
Cash and due from banks $ 23,584 $ 23,431
Federal funds sold -- 10,700
--------- ---------
Total cash and cash equivalents 23,584 34,131
Held-to-maturity investment securities 10,519 13,436
Available-for-sale investment securities 179,364 158,801
--------- ---------
Total investment securities (fair value
$189,883 & $172,288, respectively) 189,883 172,237
Total loans 278,564 255,508
Unearned income (1,352) (2,212)
Allowance for possible loan losses (3,337) (3,001)
--------- ---------
Net loans 273,875 250,295
Bank premises, furniture, and equipment 8,874 8,289
Other assets 7,460 6,753
--------- ---------
Total Assets $ 503,676 $ 471,705
========= =========
LIABILITIES
Non-interest bearing deposits $ 53,929 $ 60,534
Interest bearing deposits 368,491 353,060
--------- ---------
Total deposits 422,420 413,594
Borrowings 26,300 752
Other liabilities 4,884 6,191
--------- ---------
Total Liabilities 453,604 420,537
SHAREHOLDERS' EQUITY
Preferred stock (par value $25.00)
1,000,000 shares authorized, none issued
Common stock (par value $1.00)
10,000,000 shares authorized
3,641,035 and 3,641,178 shares issued;
3,561,011 and 3,594,954 shares outstanding,
respectively 3,641 3,641
Surplus 3,641 3,641
Undivided profits 46,056 43,864
Accumulated other comprehensive income (1,420) 1,088
Treasury stock, at cost: 80,024 shares
and 46,224 shares, respectively (1,846) (1,066)
--------- ---------
Total Shareholders' Equity 50,072 51,168
Total Liabilities & Shareholders' Equity $ 503,676 $ 471,705
========= =========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
ALLIANCE FINANCIAL CORPORATION
Condensed Consolidated Statements of Income
(Unaudited)
(Dollars in Thousands)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Interest Income:
Interest & fees on loans $ 5,740 $ 5,536 $16,764 $16,396
Interest on investment securities 2,803 2,343 8,399 7,065
Interest on federal funds sold 20 254 345 587
------- ------- ------- -------
Total Interest Income 8,563 8,133 25,508 24,048
Interest Expense:
Interest on deposits 3,304 3,377 9,920 10,019
Interest on borrowings 201 24 387 83
------- ------- ------- -------
Total Interest Expense 3,505 3,401 10,307 10,102
Net Interest Income 5,058 4,732 15,201 13,946
Provision for loan losses 250 133 725 456
------- ------- ------- -------
Net Interest Income After Provision for Losses 4,808 4,599 14,476 13,490
Other Income 1,260 1,066 3,387 2,981
------- ------- ------- -------
Total Operating Income 6,068 5,665 17,863 16,471
Other Expenses 4,074 4,158 12,220 11,929
------- ------- ------- -------
Income Before Income Taxes 1,994 1,507 5,643 4,542
Provision for income taxes 542 430 1,569 1,277
------- ------- ------- -------
Net Income $ 1,452 $ 1,077 $ 4,074 $ 3,265
======= ======= ======= =======
Net Income per Common Share/Basic and Diluted $ .41 $ .30 $ 1.14 $ .91
======= ======= ======= =======
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
ALLIANCE FINANCIAL CORPORATION
Consolidated Statements of Comprehensive Income
(Unaudited)
(Dollars in Thousands)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Net Income $1,452 $1,077 $4,074 $3,265
Other Comprehensive Income, net of taxes:
Unrealized net gain on securities:
Unrealized holding (losses) gains arising during (857) 1,022 (4,044) 940
the period
Reclassification adjustment for (gains) losses
included in net income --- (35) (136) (26)
------ ------ ------ ------
(857) 987 (4,180) 914
Income tax benefit (provision) 343 (395) 1,672 (366)
------ ------ ------ ------
Other Comprehensive (losses) income, net of tax (514) 592 (2,508) 548
------ ------ ------ ------
Comprehensive Income $ 938 $1,669 $1,566 $3,813
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
ALLIANCE FINANCIAL CORPORATION
Consolidated Statements of Changes in Shareholders' Equity
for the Nine Months Ended September 30, 1999
(Dollars in Thousands)
<TABLE>
<CAPTION>
Accumulated
Issued Common Common Additional Other
Shares Stock Paid In Retained Comprehensive Treasury
Capital Earnings Income Stock Total
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1998 3,641,178 $3,641 $3,641 $43,864 $ 1,088 $(1,066) $51,168
Net Income 4,074 4,074
Cash Dividend, $.525 per share (1,882) (1,882)
Other comprehensive losses, net of tax (2,508) (2,508)
Treasury stock purchased (780) (780)
Shares retired in lieu of fractional shares (143)
Balance at September 30, 1999 3,641,035 $3,641 $3,641 $46,056 $(1,420) $(1,846) $50,072
====== ====== ======= ======== ======== =======
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
ALLIANCE FINANCIAL CORPORATION
Consolidated Statements of Cash Flows
(Unaudited)
(Dollars in Thousands)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1999 1998
<S> <C> <C>
OPERATING ACTIVITIES
Net Income $ 4,074 $ 3,265
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses 725 456
Provision for depreciation 822 699
Realized investment security (gains) losses (136) (26)
Amortization of investment security premiums, net 843 313
Change in other assets and liabilities (337) 276
------- -------
Net Cash Provided by Operating Activities 5,991 4,983
INVESTMENT ACTIVITIES
Proceeds from maturities of investment securities, 39,465 38,593
available-for-sale
Proceeds from maturities of investment securities, 500 1,580
held-to-maturity
Purchase of investment securities, available-for-sale (75,291) (46,232)
Purchase of investment securities, held-to-maturity -- (1,455)
Proceeds from the sale of investment securities 12,793 5,355
Net increase in loans (24,305) (9,998)
Purchase of premises and equipment, net (1,407) (255)
------- -------
Net Cash Used by Investing Activities (48,245) (12,412)
FINANCING ACTIVITIES
Net increase in demand deposits, NOW & savings accounts 5,667 17,040
Net increase in time deposits 3,159 261
Net increase (decrease) in borrowings 25,548 (2,691)
Purchase of Treasury Stock (780) (86)
Cash dividends (1,887) (1,686)
------- -------
Net Cash Provided by Financing Activities 31,707 12,838
(Decrease) Increase in Cash and Cash Equivalents (10,547) 5,409
Cash and cash equivalents at beginning of year 34,131 20,989
------- -------
Cash and Cash Equivalents at End of Period $ 23,584 $ 26,398
------- -------
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest on deposits and short-term borrowings $ 10,284 $ 9,920
Income taxes 1,027 1,365
Non-Cash Investing Activities:
Decrease (increase) in net unrealized gains/losses 4,180 (914)
on available-for-sale securities
Non-Cash Financing Activities:
Dividend declared and unpaid 623 226
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
ALLIANCE FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. Basis of Presentation
The accompanying unaudited financial statements were prepared in
accordance with the instructions for Form 10Q and Regulation S-X and,
therefore, do not include information for footnotes necessary for a
complete presentation of financial condition, results of operations,
and cash flows in conformity with generally accepted accounting
principles. The following material under the heading "Management's
Discussion and Analysis of Results of Operations and Financial
Condition" is written with the presumption that the users of the
interim financial statements have read, or have access to, the latest
audited financial statements and notes thereto of the Company (as
defined below), together with Management's Discussion and Analysis of
the Results of Operations and Financial Condition as of December 31,
1998 and for the three-year period then ended. Accordingly, only
material changes in the results of operations and financial condition
are discussed in the remainder of Part I.
All adjustments (consisting of only normal recurring accruals) which,
in the opinion of management, are necessary for a fair presentation of
the financial statements have been included in the results of
operations for the three months and nine months ended September 30,
1999 and 1998. Certain reclassifications were made to the prior year's
financial statements to conform to the Company's current year
presentation.
B. Earnings Per Share
Basic earnings per share has been computed by dividing net income by
the weighted average number of common shares outstanding throughout the
three months and nine months ended September 30, 1999 and 1998, using
3,572,444 and 3,594,954 weighted average common shares outstanding for
the three months ended, and 3,587,355 and 3,596,913 weighted average
common shares outstanding for the nine months ended, respectively.
Diluted earnings per share gives effect to weighted average shares
which would be outstanding assuming the exercise of options using the
treasury stock method. For the nine months ended September 30, 1999,
the assumed exercise of options would be antidilutive.
ITEM 2. Management's Discussion and Analysis of the Financial Condition and
Results of Operations
General
- -------
Throughout this analysis, the term "the Company" refers to the consolidated
entity of Alliance Financial Corporation and its wholly-owned banking
subsidiary, Alliance Bank, N.A. Effective at the close of business on April 16,
1999, the Company merged its two banking subsidiaries, First National Bank of
Cortland and Oneida Valley National Bank under the name of Alliance Bank, N.A.
The following discussion presents material changes in the Company's results of
operations and financial condition during the three and nine months ended
September 30, 1999, which are not otherwise apparent from the consolidated
financial statements included in this report.
This discussion and analysis contains certain forward-looking statements with
respect to the financial condition, results of operations and business of
Alliance Financial Corporation and its subsidiary. These forward-looking
statements involve certain risks and uncertainties. Factors that may cause
actual results to differ materially from those contemplated by such
forward-looking statements include, among others, the following possibilities:
(1) expected cost savings from merged operations cannot be fully realized or
cannot be realized as quickly as anticipated; (2) the planned expansion into the
Syracuse market is not completed on schedule or on budget or the new branches do
not attract the expected loan and deposit customers; (3) competitive pressure in
the banking industry increases significantly; (4) costs or difficulties related
to the integration of the businesses of Cortland First and Oneida Valley are
greater than expected; (5) changes in the interest rate environment reduce
margins; (6) general economic conditions, either nationally or regionally, are
less favorable than expected, resulting in, among other things, a deterioration
in credit quality; (7) changes occur in the regulatory environment; (8) changes
occur in business conditions and inflation; (9) changes occur in the securities
markets; and (10) costs or difficulties related to the century date change
conversion (Y2K) impacting bank operations or the financial services industry
are greater than expected.
Operating results for the three and nine months ended September 30, 1999 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 1999.
Results of Operations for the Three Months Ended September 30, 1999
- -------------------------------------------------------------------
Net income was $1,452,000, or $.41 per share, for the third quarter of 1999
compared to $1,077,000, or $.30 per share, for the same period in 1998. The
$375,000 increase in net income represents a 34.8% increase over the prior year
period while the earnings per share increase of $.11 represents a 36.7%
increase. The return on average assets and return on average shareholder's
equity were 1.17% and 11.50%, respectively, for the three months ended September
30, 1999, compared to 0.94% and 8.80%, respectively, for the third quarter of
1998. During the quarter ended September 30, 1998, the Company incurred $327,000
in non-recurring merger-related expenses. Excluding these expenses from the
quarter ended September 30, 1998, 1999 third quarter net income, when compared
to the 1998 third quarter, increased $141,000, or 10.8%, with earnings per share
increasing $.05, or 13.9%. Excluding merger-related expenses, third quarter 1998
return on average assets was 1.15% and return on average equity was 10.71%.
Continuing a trend from the first two quarters of 1999, a higher level of
earning assets contributed to a $326,000, or 6.9%, increase in net interest
income when comparing the third quarter ended 1999 to the same period in 1998.
Interest and fees on loans was up $204,000, while interest on investment
securities and federal funds sold was up $226,000 when comparing the quarter
ended September 30, 1999 to the quarter ended September 30, 1998. Average total
loans for the 1999 third quarter were $269,286,000 compared to $257,494,000 in
1998, an increase of $11,792,000, or 4.6%. Growth was most significant in the
commercial loan category. Average investment securities for the quarter ended
September 30, 1999 were $43.3 million greater than the comparable 1998 period.
Yields on average earning assets declined from 7.72% as of September 30, 1998,
to 7.29% as of September 30, 1999. The Company's loan portfolio reported both a
lower mortgage portfolio yield following continued refinancings to lower market
rates, along with lower commercial loan yields resulting from loan growth in a
competitive marketplace.
Interest expense of $3,505,000 for the three month period ended September 30,
1999, compared to $3,401,000 for the same period in the prior year, was up 3.1%.
The average cost of interest bearing liabilities for the third quarter of 1999,
at 3.76%, was up 19 basis points compared to the third quarter of 1998, while at
the same time average interest bearing liabilities over the comparable periods
increased by $37,328,000.
The provision for loan loss expense for the third quarter of 1999 was $250,000,
an increase of $117,000 compared to the third quarter of 1998 with the increase
supporting the growth in loans. Net charge-offs for the three month period ended
September 30, 1999 were $173,000 compared to $57,000 for the quarter ended
September 30, 1998. Non-performing loans at 0.45% of total loans at September
30, 1999 were relatively stable, compared to 0.41% a year earlier. The allowance
for possible loan losses balance as of September 30, 1999, in the amount of
$3,337,000, increased to 1.20% of total loans compared to 1.19% a year earlier,
and 1.17% at December 31, 1998.
Non-interest income of $1,260,000 for the third quarter of 1999 was up $194,000,
or 18.2%, compared to the comparable quarter of 1998. Continued growth in trust
department income and service charges on deposit represented the majority of the
increase.
Non-interest expense declined $84,000, or 2%, for the three months ended
September 30, 1999 compared to the same period in 1998. Excluding $327,000 of
third quarter 1998 merger-related expenses previously referred to, non-interest
expense for the quarter ended September 30, 1999 increased $243,000, or 6.3%,
compared to the quarter ended September 30, 1998. Increases in supplies,
advertising, and communication expense represented the majority of the increase.
Results of Operations for the Nine Months Ended September 30, 1999
- ------------------------------------------------------------------
Net income was $4,074,000, or $1.14 per share, for the first nine months of 1999
as compared to $3,265,000, or $.91 per share, for the same period in 1998. The
$809,000 increase in net income represents a 24.8% increase over the same period
in the previous year while the earnings per share increase of $.23 represents a
25.3% increase over the comparable period. The return of average assets improved
to 1.11% from 0.97% while return on average equity improved to 10.61% from 8.81%
when comparing the nine months ended 1999 to the comparable period in 1998.
During the first nine months of 1998, the Company incurred $389,000 in
non-recurring merger-related expenses. Excluding these expenses from the 1998
operating expense total, net income for the first nine months of 1999, when
compared to the comparable period of 1998, increased $529,000, or 14.9%, with
earnings per share increasing $.14, or 14%. Excluding merger-related expenses,
return on average assets was 1.05% and return on average equity was 9.56% for
the nine months ended September 30, 1998. Although the net interest margin for
the nine months ended declined from 4.62% on September 30, 1998 to 4.36% on
September 30, 1999, a $32,886,000 increase in average earning assets in the
first nine months of 1999 as compared to the same period in 1998 contributed
substantially to a $1,255,000, or 9%, increase in net interest income. Larger
loan and investment portfolios increased interest income by $1,460,000 while at
the same time the cost of interest bearing liabilities increased only $205,000.
The Company increased its provision for loan loss expense by $269,000 in the
first nine months of 1999 compared to the comparable period in 1998 in
connection with a loan portfolio that increased by $23,056,000. Net loan losses
declined $36,000, or 8.5%, to $389,000 for the nine month period ended September
30, 1999 as compared to the same period in 1998. Non-performing assets as a
percent of total assets were 0.30% at September 30, 1999, unchanged compared to
September 30, 1998.
Non-interest income of $3,387,000 for the first nine months of 1999 was up
$406,000, or 13.6%, as compared to the first nine months of 1998. Significant
increases in trust department revenues and service charges on deposit
contributed to the growth. During the first nine months of 1999, the Company
realized gains on the sales of securities in the amount of $136,000.
Non-interest expense increased $291,000, or 2.4%, for the nine months ended
September 30, 1999 as compared to the same period in 1998. Excluding the
$389,000 merger-related expenses previously referred to, non-interest expense
for the nine months ended September 30, 1999 increased $680,000, or 5.7%,
compared to the nine months ended September 30, 1998. Advertising, supplies, and
communication expenses increased by $493,000, or 49%, compared to the first nine
months of 1998.
Financial Condition
- -------------------
Total assets increased $31,971,000, or 6.8%, to $503,676,000 at September 30,
1999 from $471,705,000 at December 31, 1998. For the nine months ended September
30, 1999, total loans net of unearned discount increased $23,916,000, or 9.4%,
to $277,212,000. A focus on commercial and indirect automobile lending during
the year has been responsible for the loan growth. Investment securities as of
September 30, 1999 in the amount of $189,883,000 were up $17,646,000, or 10.2%,
since December 31, 1998. Deposits as of September 30, 1999 increased $8,826,000,
or 2.1%, compared to year-end. During the first nine months of 1999, the Company
moved from a federal funds sold to a borrowing position with borrowings matched
against certain loans and investments. Shareholders' equity at September 30,
1999 was $50,072,000, or 9.9%, of assets. During the first nine months of 1999
the Company's retained earnings increased undivided profits by $2,192,000.
Rising market interest rates, resulting from Federal Reserve Board actions,
reduced the market value of the Company's available for sale investment
securities, thereby contributing to the decrease in the Accumulated Other
Comprehensive Income component of shareholders' equity by $2,508,000. On July
21, 1999, the Company announced that its Board of Directors authorized the
repurchase of up to 300,000 shares of its common stock, or approximately 8.3% of
the Company's outstanding common stock. As of September 30, 1999, the Company
had repurchased 33,800 shares in connection with this program.
Other Information
- -----------------
On July 19, 1999, the Company opened a downtown Syracuse, New York branch office
which is designed as a business banking center to provide banking, trust, and
investment services to business customers. The branch has limited hours for
consumer banking transactions. The Company is presently negotiating the purchase
or lease of three other Syracuse area locations suitable for additional branch
expansion scheduled for early in the year 2000.
In December 1998, the Oneida Indian Nation ("The Nation") and the U.S. Justice
Department filed motions to amend a longstanding claim against the State of New
York to include a class of 20,000 unnamed defendants who own real property in
Madison and Oneida Counties. If the motion is granted to amend the claim,
litigation could involve assets of the Company. On March 26, 1999, the United
States District Court heard arguments on the matter and has reserved its
decision pending a negotiated settlement of the matter by the State of New York
and The Nation. The Nation has indicated that the purpose of the legal action
currently being undertaken is to force the State of New York to negotiate an
equitable settlement of their claim which was ruled on by the United States
Supreme Court in favor of The Nation over 13 years ago. Management believes
that, ultimately, the State of New York will be held responsible for these
claims and this matter will be settled without adversely impacting the Company.
Impact of the Year 2000
- -----------------------
The Company has completed its testing and implementation phases of its Y2K
program and believes that it has placed into service all of the systems and
equipment necessary to reduce the Y2K risk to a minimum. In certain situations,
the Company has relied on third party information which may be inaccurate
because it is unverifiable by the Company. The Company's Business Resumption
Contingency Plan has established contingencies for all mission critical systems
along with procedures for all of the bank's operating and customer service
departments in the event of Y2K related system failures. The Company's Liquidity
Contingency Plan has evaluated its customers' year-end cash needs and is
managing its liquidity sources to meet the estimated needs. The Company
continues to monitor its commercial loan portfolio and evaluates its new
commercial loan business to insure that customers' exposure to Y2K risks will
not adversely affect the quality of the loan portfolio. The current portfolio
Y2K related risk is considered to be low. The Company is continuing a customer
Y2K awareness program throughout the balance of the year, to build and maintain
confidence in the bank's state of readiness and ability to provide service
through the date change period. The Company's Y2K plans are under continual
review by its internal auditors and regulators.
Total costs for the Y2K renovation project are expected to be approximately
$150,000. Costs have been expensed throughout 1998 and 1999 and the Company
plans to continue to expense any remaining Y2K related costs as they are
incurred.
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
The Company's market risk arises principally from interest rate risk in its
lending, deposit and borrowing activities. Management actively monitors and
manages its interest rate risk exposure using a computer simulation model that
measures the impact of changes in interest rates on its interest income. As of
September 30, 1999, an instantaneous 200 basis point increase in market interest
rates was estimated to have a negative impact of 5.8% on net interest income
over the next twelve month period, while a 200 basis point decrease in market
interest rates was estimated to have a negative impact of 0.5% on the bank's net
interest income over the same period. Computation of the prospective effects of
hypothetical interest rate changes are based on numerous assumptions, including
relative levels of market interest rates, loan prepayments and deposit rate and
mix changes, and should not be relied upon as indicative of actual results.
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
Not applicable.
ITEM 2. Changes in Securities and Use of Proceeds
Not applicable.
ITEM 3. Defaults Upon Senior Securities
Not applicable.
ITEM 4. Submission of Matters to a Vote of Securities Holders
Not applicable.
ITEM 5. Other Information
Not applicable.
ITEM 6. Exhibits and Reports on Form 8-K
a) Exhibits required by Item 601 of Regulation S-K:
Exhibit No. Description
3.1 Amended and Restated Certificate of Incorporation of the
Company (1)
3.2 Amended and Restated Bylaws of the Company (1)
27 Financial Data Schedule (2)
(1) Incorporated herein by reference to the exhibit with the
same number to the Registration Statement on Form S-4
(Registration No. 333-62623) of the Company previously filed
with the Securities and Exchange Commission (the
"Commission") on August 31, 1998, as amended.
(2) Filed herewith.
b) Reports on Form 8-K
The Company filed with the Commission on July 21, 1999 a Current
Report on Form 8-K to report the authorization by the Board of
Directors of the Company to repurchase up to an aggregate of
300,000 shares of its common stock, par value $1.00 per share.
<PAGE>
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.
ALLIANCE FINANCIAL CORPORATION
DATE November 10, 1999 /s/ David R. Alvord
----------------------- -----------------------------------
David R. Alvord, President & Co-CEO
DATE November 10, 1999 /s/ David P. Kerhsaw
---------------------- -----------------------------------
David P. Kershaw, Treasurer & CFO
<TABLE> <S> <C>
<ARTICLE> 9
<CIK> 0000796317
<NAME> ALLIANCE FINANCIAL CORPORATION
<MULTIPLIER> 1,000
<CURRENCY> U.S.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<EXCHANGE-RATE> 1.000
<CASH> 23,584
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 179,364
<INVESTMENTS-CARRYING> 10,519
<INVESTMENTS-MARKET> 10,519
<LOANS> 277,212
<ALLOWANCE> 3,337
<TOTAL-ASSETS> 503,676
<DEPOSITS> 422,420
<SHORT-TERM> 26,300
<LIABILITIES-OTHER> 4,884
<LONG-TERM> 0
0
0
<COMMON> 7,282
<OTHER-SE> 42,790
<TOTAL-LIABILITIES-AND-EQUITY> 503,676
<INTEREST-LOAN> 16,764
<INTEREST-INVEST> 8,399
<INTEREST-OTHER> 345
<INTEREST-TOTAL> 25,508
<INTEREST-DEPOSIT> 9,920
<INTEREST-EXPENSE> 10,307
<INTEREST-INCOME-NET> 15,201
<LOAN-LOSSES> 725
<SECURITIES-GAINS> 136
<EXPENSE-OTHER> 12,220
<INCOME-PRETAX> 5,643
<INCOME-PRE-EXTRAORDINARY> 5,643
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,074
<EPS-BASIC> 1.14
<EPS-DILUTED> 1.14
<YIELD-ACTUAL> 4.36
<LOANS-NON> 787
<LOANS-PAST> 474
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 3,065
<ALLOWANCE-OPEN> 3,001
<CHARGE-OFFS> 518
<RECOVERIES> 129
<ALLOWANCE-CLOSE> 3,337
<ALLOWANCE-DOMESTIC> 3,337
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
