<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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):
January 23, 1997
Investors Financial Services Corp.
(Exact name of Registrant as specified in its charter)
Delaware 0-26996 04-3279817
(State or jurisdiction (Commission File Number) (IRS Employer
of Incorporation Identification No.)
89 South Street 02205-1537
Boston, Massachusetts (Zip Code)
(Address of principal
executive offices)
Registrant's telephone number, including area code: 617 330-6700
No change since last report
(Former name or former address, if changed
since last report)
<PAGE>
Item 5. Other Events.
- ---------------------
On January 23, 1997, Investors Financial Services Corp. (the "Company")
reported its financial results for the quarter and year ended December 31, 1996
and announced that it was offering $25 million in capital securities to be
issued and sold in a private placement by Investors Capital Trust I, a statutory
business trust sponsored by the Company.
Item 7. Financial Statements and Exhibits.
- ------------------------------------------
Exhibit No. Exhibit
- ----------- -------
99.1 Press release of the Company
dated January 23, 1997
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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 hereunto duly authorized.
INVESTORS FINANCIAL SERVICES CORP.
January 27, 1997 By: /s/ Karen C. Keenan
-------------------
Karen C. Keenan
Chief Financial Officer
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EXHIBIT INDEX
Exhibit No. Description Page
- ----------- ----------- ----
99.1 Press release of the 6
Company dated
January 23, 1997
<PAGE>
EXHIBIT 99.1
------------
INVESTORS FINANCIAL SERVICES CORP.
89 South St.
Boston, MA 02111
INVESTORS FINANCIAL SERVICES CORP. YEARLY RESULTS
FOR IMMEDIATE RELEASE
CONTACT: KAREN C. KEENAN
INVESTORS FINANCIAL SERVICES CORP.
(617)330-6001
BOSTON, MA, JANUARY 23, 1997- Investors Financial Services Corp. (NASDAQ
National Market symbol: IFIN) reported financial results for the quarter and the
year ended December 31, 1996.
For the quarter ended December 31, 1996, the Company reported net income of
$2,285,000, an increase of 87 percent compared to net income of $1,225,000 for
the quarter ended December 31, 1995. Earnings per share for the fourth quarter
of 1996 were $.35 compared to $.22 (pro forma) for the comparable quarter of
last year. Pro forma earnings per share give effect to the 4,030,000 shares
issued upon the recapitalization of the Company in November 1995, but do not
give effect to the 2,300,000 shares issued in the Company's subsequent initial
public offering.
For the year ended December 31, 1996, the Company reported net income of
$7,774,000, an increase of 68 percent compared to net income of $4,617,000 for
the year ended December 31, 1995. Net income for the year ended December 31,
1995 includes a one-time gain of $1,491,000 from the assignment of the right to
service certain unit investment trust accounts. Earnings per share for the 1996
year were $1.20 compared to $1.05 (pro forma) for the same period in 1995.
Without the one-time gain referenced above, earnings per share for the year
ended December 31, 1995 were $.71 (pro forma).
Net operating revenue increased 40 percent from $14,859,000 in the fourth
quarter of 1995 to $20,848,000 in the fourth quarter of 1996, and increased 27
percent from $58,891,000 in the 1995 year to $74,576,000 in the 1996 year.
Because the Company is now able to accept client deposits that had been
historically directed to other financial institutions due to regulatory
restrictions, the Company has experienced a shift in the mix of compensation
received from its clients. Approximately $5.2 million of fee revenue earned in
1995 shifted to net interest income in 1996.
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The Company's total assets nearly tripled from $322,436,000 at December 31,
1995 to $964,462,000 at December 31, 1996 as the Company continued to increase
its liability base with client repurchase agreements and deposits which
historically had been directed to other financial institutions due to regulatory
restrictions. Total assets processed by the Company for its clients totaled
approximately $122 billion at December 31, 1996, compared to $94 billion at
December 31, 1995. Of the $28 billion net increase in assets processed from
December 31, 1995 to December 31, 1996, $7 billion of the increase reflects
assets processed for new clients. The remainder of the increase reflects growth
of assets processed through expansion of existing client relationships and
improved methods for tracking the amount of assets processed, offset in part by
the assets of clients no longer serviced by the Company.
"The fourth quarter continued an impressive year of growth for the Company,"
stated Kevin J. Sheehan, President and Chief Executive Officer of the Company.
"Since the removal of regulatory constraints in late 1995, we have been able to
capitalize on opportunities for new and expanded business offerings while
fulfilling our commitment to superior customer service. As a result, during the
past year we have seen dramatic growth in revenue, earnings and total assets,
fueled by increased demand for our service offerings from both current and new
clients. We look forward to the opportunities for continued growth in 1997."
The Company also announced plans to offer up to $25 million in capital
securities in a private placement. The 30-year capital securities will be
issued by Investors Capital Trust I, a statutory business trust sponsored by the
Company. The capital securities will not be registered under the Securities Act
of 1933 and may not be offered or sold in the United States without registration
under or an exemption from the registration requirements of the Securities Act.
The Company intends to use the proceeds of the sale of the capital securities to
support expected growth in the Company's balance sheet.
Today the Company also announced that its Board of Directors declared a
quarterly cash dividend of $.02 per share on both its Common Stock and Class A
Common Stock, an increase of $.01 per share over the 1996 quarterly dividend
rate. The dividend is payable February 14, 1997 to stockholders of record as of
January 31, 1997.
Investors Financial Services Corp. provides asset administration services for
the financial services industry through its wholly-owned subsidiary, Investors
Bank & Trust Company. The Company provides domestic and global custody,
multicurrency accounting, institutional transfer agency, performance
measurement, foreign exchange, securities lending, and mutual fund
administration services to a variety of financial asset managers, including
mutual fund complexes, investment advisors, banks and insurance companies.
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INVESTORS FINANCIAL SERVICE CORP.
CONDENSED BALANCE SHEET
(in thousands)
<TABLE>
<CAPTION>
December 31, December 31,
ASSETS: 1995 1996
------------ ------------
<S> <C> <C>
Federal funds sold and short term
investments $ 16,000 $120,000
Securities held to maturity 154,124 460,010
Securities available for sale 90,819 271,121
Loans, net of reserve 22,864 66,237
Nonearning assets 38,629 47,094
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TOTAL ASSETS $322,436 $964,462
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY:
LIABILITIES:
Interest-bearing deposits $ 85,540 $392,795
Non-interest bearing deposits 103,453 203,722
------------ ------------
Total deposits 188,993 596,517
Securities sold under repurchase
agreements 74,401 296,421
Other liabilities 5,621 9,665
------------ ------------
TOTAL LIABILITIES 269,015 902,603
Stockholders' equity 53,421 61,859
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $322,436 $964,462
============ ============
</TABLE>
INVESTORS FINANCIAL SERVICE CORP.
SELECTED FINANCIAL DATA
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Quarter Ended Year Ended
December 31 December 31
STATEMENT OF INCOME DATA: 1995 1996 1995 1996
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net interest income $ 2,636 $ 5,292 $ 6,964 $ 17,944
Noninterest income:
Asset administration and other fees 12,223 15,556 49,355 56,632
Proceeds from assignment of UIT
servicing, net - - 2,572 -
--------- --------- --------- ---------
Net operating revenue 14,859 20,848 58,891 74,576
Operating expenses 12,776 17,129 51,263 61,935
--------- --------- --------- ---------
Income before income taxes 2,083 3,719 7,628 12,641
Income taxes 858 1,434 3,011 4,867
--------- --------- --------- ---------
Net income $ 1,225 $ 2,285 $ 4,617 $ 7,774
========= ========= ========= =========
Earnings per share $0.35 $1.20
========= ========
Average shares outstanding 6,522,857 6,504,382
AVERAGE BALANCE SHEET DATA:
Interest earning assets $ 781,870 $125,942 $ 575,662
Total assets 837,856 145,183 628,893
Total deposits 502,062 115,673 377,219
Stockholders' equity 58,318 19,493 56,137
</TABLE>
