-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AvO/CsaDvmtdwpsjKddLJYu5j+EkaLDXi4D28O12nbZTJcOn0ndUr5yKfF1QI5/T cc3LcbEhrC/8tR4OyXMGQA== 0000796317-99-000021.txt : 19991115 0000796317-99-000021.hdr.sgml : 19991115 ACCESSION NUMBER: 0000796317-99-000021 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991112 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALLIANCE FINANCIAL CORP /NY/ CENTRAL INDEX KEY: 0000796317 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 161276885 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-15366 FILM NUMBER: 99746772 BUSINESS ADDRESS: STREET 1: 65 MAIN ST STREET 2: PO BOX 5430 CITY: CORTLAND STATE: NY ZIP: 13045-5430 BUSINESS PHONE: 6077581228 MAIL ADDRESS: STREET 1: PO BOX 5430 STREET 2: 65 MAIN STREET CITY: CORTLAND STATE: NY ZIP: 13045-5430 FORMER COMPANY: FORMER CONFORMED NAME: CORTLAND FIRST FINANCIAL CORP DATE OF NAME CHANGE: 19920703 10-Q 1 FORM 10-Q SEPTEMBER 1999 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. 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 PART 1. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS ALLIANCE FINANCIAL CORPORATION Consolidated Statements of Condition (Dollars in Thousands)
September 30, 1999 December 31, 1998 (Unaudited) (Note) 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 ========= =========
The accompanying notes are an integral part of the consolidated financial statements. ALLIANCE FINANCIAL CORPORATION Condensed Consolidated Statements of Income (Unaudited) (Dollars in Thousands)
Three Months Ended Nine Months Ended September 30, September 30, 1999 1998 1999 1998 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 ======= ======= ======= =======
The accompanying notes are an integral part of the consolidated financial statements. ALLIANCE FINANCIAL CORPORATION Consolidated Statements of Comprehensive Income (Unaudited) (Dollars in Thousands)
Three Months Ended Nine Months Ended September 30, September 30, 1999 1998 1999 1998 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
The accompanying notes are an integral part of the consolidated financial statements. ALLIANCE FINANCIAL CORPORATION Consolidated Statements of Changes in Shareholders' Equity for the Nine Months Ended September 30, 1999 (Dollars in Thousands)
Accumulated Issued Common Common Additional Other Shares Stock Paid In Retained Comprehensive Treasury Capital Earnings Income Stock Total 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 ====== ====== ======= ======== ======== =======
The accompanying notes are an integral part of the financial statements. ALLIANCE FINANCIAL CORPORATION Consolidated Statements of Cash Flows (Unaudited) (Dollars in Thousands)
Nine Months Ended September 30, 1999 1998 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
The accompanying notes are an integral part of the consolidated financial statements. 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. 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 EX-27 2 ARTICLE 9 FDS FOR 10-Q
9 0000796317 ALLIANCE FINANCIAL CORPORATION 1,000 U.S. 9-MOS DEC-31-1999 SEP-30-1999 1.000 23,584 0 0 0 179,364 10,519 10,519 277,212 3,337 503,676 422,420 26,300 4,884 0 0 0 7,282 42,790 503,676 16,764 8,399 345 25,508 9,920 10,307 15,201 725 136 12,220 5,643 5,643 0 0 4,074 1.14 1.14 4.36 787 474 0 3,065 3,001 518 129 3,337 3,337 0 0
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