FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1994
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 1-6451
UJB Financial Corp.
(Exact name of registrant as specified in its charter)
New Jersey 22-1903313
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
301 Carnegie Center, P.O. Box 2066, Princeton, New Jersey 08543-2066
(Address of principal executive offices) (Zip Code)
(609) 987-3200
(Registrant's telephone number, including area code)
_______________________________________________________________________
(Former name, former address and former fiscal year, if changed since
last report).
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. [X] Yes [ ] No
As of April 30, 1994 there were 51,935,047 shares of common stock,
$1.20 par value, outstanding
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
In accordance with Instruction D., included herein as Exhibit (28)A
is UJB Financial Corp. consolidated balance sheets as of March 31,
1994, December 31, 1993 and March 31, 1993; as Exhibit (28)B is UJB
Financial Corp. consolidated statements of income for the three
months ended March 31, 1994 and 1993; and as Exhibit (28)C is UJB
Financial Corp. consolidated statements of cash flows for the three
months ended March 31, 1994 and 1993. Also included herein as
Exhibit (28)D is UJB Financial Corp. consolidated statements of
shareholders' equity as of March 31, 1994 and 1993; and as Exhibit
(28)E is UJB Financial Corp. consolidated average balance sheets
with resultant interest and rates for the three months ended March
31, 1994 and 1993.
The consolidated financial statements included herein as Exhibits
include the accounts of UJB Financial Corp. and all of its
subsidiaries (the Company). Significant intercompany transactions
have been eliminated in consolidation.
The consolidated financial statements have been prepared on an
accrual basis. For additional information and disclosures required
under generally accepted accounting principles, reference is made
to the registrant's 1993 Annual Report on Form 10-K.
The accompanying financial statements reflect in the opinion of
management, all normal, recurring adjustments necessary to present
fairly the financial position of UJB Financial Corp. and
subsidiaries, and the results of their operations and changes in
their cash flows. The financial statements presented, in all
material respects, comply with the current reporting requirements
of supervisory authorities.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Financial Condition
Total assets at March 31, 1994 were $14.2 billion, an increase of
$743.4 million or 5.5 percent from year-end 1993. Compared to
March 31, 1993, total assets increased $398.5 million or 2.9
percent.
On January 1, 1994, the company adopted Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments
in Debt and Equity Securities" (SFAS 115). This Statement changed
the accounting for certain debt and equity securities. As required
by SFAS 115, unrealized holding gains and losses on investment
securities available for sale were recorded net of taxes as a
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separate component of shareholders' equity. This amount was a $3.5
million after-tax gain ($6.5 million before taxes).
At March 31, 1994, investment securities available for sale,
reported at fair value, amounted to $1.0 billion. These securities
decreased $161.0 million or 13.9 percent from year-end 1993, and
comprised $559.2 million of U.S. Government and agency CMOs and
$441.9 million of other securities, principally whole loan CMOs.
During the three months of 1994, $3.3 million of investment
securities available for sale were sold. Total maturities were
$163.3 million during the three month period. Compared to March
31, 1993, investment securities available for sale increased $288.6
million relecting the transfer of securities from the portfolio at
December 31, 1993 in anticipation of the adoption of SFAS 115
less maturities and sales which were not reinvested during this period
Investment securities at March 31, 1994 increased $837.0 million or
34.1 percent from year-end 1993. This growth was funded by
paydowns on corporate CMOs and an increase in short-term
borrowings. The increase in the investment portfolio was the
result of $1.3 billion in purchases, principally in collateralized
mortgage obligations (CMOs), offset by maturities of $419.3 million
during the three months of 1994. Since December 31, 1993, other
securities increased $661.7 million as investment strategies were
directed toward the purchase of whole loan CMOs. Compared to March
31, 1993 the investment portfolio increased $171.4 million or 5.5
percent.
Total loans increased $124.8 million or 1.5 percent from December
31, 1993 to $8.7 billion at March 31, 1994 but were $17.0 million
or .2 percent below March 31, 1993. From December 31, 1993,
commercial loans increased $151.1 million or 3.6 percent to $4.4
billion at March 31, 1994. Mortgage loans decreased $34.4 million
or 1.4 percent from December 31, 1993 to $2.3 billion at March 31,
1994. Compared to March 31, 1993, mortgage loans increased $24.5
million or 1.1%. Instalment loans increased $8.1 million or .4
percent from December 31, 1993 to $2.0 billion. Compared to March
31, 1993 instalment loans decreased $41.4 million or 2.0%.
At the end of the first quarter of 1994, non-performing loans were
$239.9 million, or 2.75 percent of total loans. This compares to
$251.7 million, or 2.92 percent at year-end 1993, and $319.4
million, or 3.65 percent at the end of the first quarter of 1993.
In the first quarter of 1994, non-performing loans decreased by
$11.8 million from the year-end 1993 and were down $79.5 million
from March 31, 1993. This was the eleventh consecutive quarter of
decline in non-performing loans since their highest level at June
30, 1991 of $483.0 million.
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<PAGE>
The following table summarizes the trends in the components of
non-performing loans (in thousands):
<TABLE>
<CAPTION>
Mar. 31, Dec. 31, Mar. 31,
1994 1993 1993
-------- -------- ---------
<S> <C> <C> <C>
Commercial and industrial $ 46,804 $ 57,325 $ 89,972
Real estate:
Construction and development 89,148 87,402 109,066
Real estate related 103,936 106,999 120,339
-------- -------- --------
Total real estate 193,084 194,401 229,405
-------- -------- --------
Total $239,888 $251,726 $319,377
======== ======== ========
</TABLE>
At March 31, 1994, other real estate was $69.5 million, net of a
$30.2 million allowance. Since December 31, 1993, other real
estate decreased $2.8 million. Compared to March 31, 1993 these
net balances decreased $43.1 million.
The allowance for loan losses at March 31, 1994 was $239.4 million,
or 2.74 percent of loans, compared to $242.1 million, or 2.81
percent of loans at December 31, 1993 and $253.1 million or 2.89
percent of loans at March 31, 1993. The allowance for loan losses
provides coverage for 99.8 percent of non-performing loans, up from
96.2 percent at December 31, 1993 and 79.2 percent a year ago. For
the three months ended March 31, 1994, net charge offs were $21.2
million or 1.00 percent of average loans compared to $47.2 million
or 2.19 percent during the comparable period in 1993.
At March 31, 1994 total deposits were $11.4 billion, a decrease of
$33.7 million or .3 percent from December 31, 1993 compared to an
increase of $47.3 million or .4 percent from a year ago. Retail
savings and time deposits decreased $34.8 million or .4 percent
from year-end to $8.4 billion and decreased $435.6 million or 4.9
percent from March 31, 1993. Commercial certificates of deposit
$100,000 and over were $244.9 million, an increase of $18.4 million
or 8.1 percent compared to December 31, 1993 and increased $27.0
million or 12.4 percent compared to March 31, 1993. Demand
deposits decreased $17.3 million or .6 percent from year-end 1993
to $2.8 billion but increased $455.8 million or 19.6 percent from
March 31, 1993.
Other borrowed funds increased $691.7 million or 125.9 percent from
December 31, 1993 to $1.2 billion. Compared to March 31, 1993,
other borrowed funds increased $257.1 million. Other borrowed
funds increased principally to fund the growth in the investment
and loan portfolios since year-end 1993. At March 31, 1994,
long-term debt was $208.7 million, an increase of $.3 million or .1
percent from year-end 1993.Compared to March 31, 1993, long-term
debt decreased $7.4 million or 3.4 percent. This decrease reflects
the impact of principal paydowns on long term debt.
Total shareholders' equity increased $23.9 million or 2.5 percent
from December 31, 1993 to $1.0 billion. The adoption of SFAS No.
115 accounted for $3.5 million of this increase. The leverage
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ratio of the company was 7.07 percent, unchanged from December 31,
1993. At March 31, 1993, the leverage ratio was 6.82 percent.
Under the risk-based capital guidelines, the Company's Tier I
capital was 9.15 percent and total capital was 12.13 percent at
March 31, 1994, compared with 9.37 percent and 12.43 percent,
respectively, at December 31, 1993. The decline in these ratios
reflects the $743.4 million increase in assets since year-end 1993.
At March 31, 1993, the Tier I capital ratio was 8.88 percent and
total capital was 11.94 percent. The current minimum regulatory
guidelines for Tier I and total capital ratios are 4.0 percent and
8.0 percent respectively.
Results of Operations
For the first quarter of 1994, net income was $27.4 million or $.52
per share compared with net income of $20.3 million or $.39 per
share earned during the first quarter of 1993. The results for the
first quarter of 1994 were impacted by the adoption of Statement of
Financial Accounting Standards (SFAS) No. 112, "Employers'
Accounting for Postemployment Benefits", which had the effect of
reducing net income by $1.7 million or $.03 per share. The 1993
first quarter results were impacted by the adoption of SFAS 109,
"Accounting for Income Taxes". The adoption of SFAS 109 had a
favorable effect on net income of $3.8 million or $.07 per share.
Interest income on a tax-equivalent basis was $217.6 million for
the three months ended March 31, 1994, a decrease of $10.1 million
or 4.4 percent compared to the same period in 1993. The decline in
interest income for the three months was primarily due to the lower
interest rate environment when compared to the prior year.
Partially offsetting this decline were volume increases in
investment securities and investment securities available for sale
and the benefit of reduced levels of non-performing loans.
Interest earning assets averaged $12.8 billion during the first
three months of 1994 an increase of $328.7 million or 2.6 percent
over the same period in 1993.
Interest expense decreased $15.4 million or 17.7 percent for the
three months ended March 31, 1994 compared to the same period in
1993. The benefit of the lower rate environment on the cost of
retail time deposits compared to 1993 was the primary factor in the
decline in interest expense. The costs on these deposits decreased
$18.9 million or 25.9 percent. Consumer preference continued to
shift out of retail certificates of deposit toward more liquid
accounts that are generally lower-yielding. Offsetting this
decrease, interest expense on borrowed funds and commercial
certificates of deposit over $100,000 increased $3.3 million and
$.3 million, respectively. These increases were principally due to
volume increases. Total borrowed funds, including commercial paper
and long-term debt, increased $338.4 million and commercial
certificates of deposit increased $49.8 million on average compared
to the prior year period. Demand deposits averaged $2.8 billion
during the three months ended March 31, 1994, an increase of $381.6
million or 15.8 percent over the comparable period in 1993.
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<PAGE>
Net interest income on a tax-equivalent basis was $146.1 million
for the three months of 1994 compared with $140.8 million for the
three months ended March 31, 1993, an increase of $5.3 million or
3.7 percent. The net interest spread percentage on a
tax-equivalent basis (the difference between the rate earned on
average interest earning assets and the rate paid on average
interest bearing liabilities) increased to 4.00 percent for the
three months of 1994 compared with 3.93 percent during the
corresponding period in 1993. Additionally, net interest margin
(net interest income on a tax-equivalent basis as a percentage of
average interest earning assets) increased to 4.65 percent during
the three months of 1994 compared with 4.60 percent during the same
period in 1993. The increase in net interest spread and net
interest margin reflected the benefit of favorable retail deposit
repricing in a declining rate environment, the benefit of reduced
levels of non-performing loans and the favorable impact of an
increase in demand deposits.
The provision for loan losses for the quarter ended March 31, 1994
was $18.5 million compared to $25.0 million for the same period a
year earlier. This reduction in the provision for loan losses
reflects the decline in the levels of non-performing loans.
Non-interest income for the first quarter of 1994 totaled $43.8
million, a decrease of $3.4 million or 7.2 percent compared with
the first quarter of 1993. Investment securities transactions are
reflected in non-interest income. For the three months of 1994,
net gains of $1.3 million were realized compared with gains of $6.6
million in 1993. These gains were recognized as securities were
sold out of the available for sale portfolio.
For the first quarter of 1994, service charges on deposits were
$15.9 million, an increase of $1.1 million or 7.6 percent over the
prior year period. The increase in service charges was primarily
due to price increases effective in the third quarter 1993.
Service and loan fee income increased $1.4 million or 17.5 percent
compared with the quarter ended March 31, 1993 primarily due to
higher merchant credit card fees. Trust fee income increased $.2
million or 4.2 percent compared to the first quarter of 1993.
During the first quarter of 1993, other income decreased $.5
million or 3.8 percent below the same period in 1993.
Non-interest expenses in the first quarter of 1994 totaled $122.4
million, down $14.4 million, or 10.5 percent compared to a year
ago. Salaries expense decreased $.9 million or 2.0 percent during
the first quarter of 1994 compared to the first quarter of 1993.
Pension and other employee benefits for the first quarter were
$13.8 million, down $1.1 million or 7.4 percent from the first
three months of 1993.
Occupancy expense for the first quarter of 1994 increased $1.0
million or 8.3% compared to the prior year period. This increase
was principally due to higher snow removal costs as a result of
severe weather conditions. Furniture and equipment expense rose
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<PAGE>
$.9 million or 8.7 percent for the quarter ended March 31, 1994
compared to the three months ended March 31, 1993. The increase
over the prior year period resulted from increased equipment
rentals and maintenance expenses related to the installation of new
on-line equipment to support branch automation.
The FDIC insurance assessment decreased $1.3 million or 16.4
percent during the first quarter of 1994 compared to the first
quarter of 1993. This decrease reflects the impact of the reduced
assessment rates under the risk-based assessment system implemented
under the Federal Deposit Insurance Corporation Improvement Act of
1991 (FDICIA).
Other real estate expenses were $4.1 million for the first quarter
of 1994, a decrease of $10.9 or 72.9 percent from the first quarter
of 1993. Included in these amounts is a provision for losses on
other real estate and expenses related to holding and operating
foreclosed property. A provision of $2.4 million for the first
quarter was added to the allowance for other real estate. This
compares to a provision of $12.5 million for the first quarter of
1993. Expenses for operating and maintaining other real estate
amounted to $1.7 million for the first quarter of 1994 compared
with $2.4 million for the first quarter of 1993.
In January 1994, the company adopted SFAS No. 112 "Employers'
Accounting for Postemployment Benefits". This Statement
established the required accounting for benefits provided to former
and inactive employees, as well as their beneficiaries and any
covered dependents, after employment but before retirement. The
cumulative effect of the adoption of SFAS No. 112 resulted in a
negative impact on net income of $1.7 million or $.03 per share.
Liquidity
Liquidity is a measure of the ability to meet present and future
funding obligations and commitments. Bank liquidity is the ability
to meet the borrowing needs and deposit withdrawal requirements of
customers and to support asset growth. Principal sources of
liquidity are deposit generation, access to purchased funds,
maturities and repayments of loans and investment securities and
interest and fee income.
Savings and time deposits declined for the three months of 1994,
primarily in the category of retail certificates of deposits as
consumers seek yields in alternative instruments. Demand deposits
increased $455.8 million to $2.8 billion from a year ago.
Proceeds of $419.3 million and $163.3 million from maturities of
investment securities and investment securities available for sale
contributed to liquidity since year-end 1993. Borrowed funds,
which includes long-term debt and commercial paper, experienced a
$710.0 million increase since December 31, 1993 and provided
another source of liquidity. Offsetting these sources were
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<PAGE>
purchases of $1.3 billion of investment securities and an increase
of $124.8 million in loans since year-end 1993.
Additional liquidity is provided in the investments available for
sale and the investment portfolio. Scheduled maturities and
anticipated principal repayments of the total investment portfolio
including investments available for sale, will be approximately
$995.2 million throughout the balance of 1993. These portfolios
serve as a source of liquidity to meet the funding needs in periods
of loan growth.
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<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
In re UJB Financial Corp. Shareholder Litigation, United States
District Court for the District of New Jersey, Trenton, Civil Action
90-1569, Suit filed April 5 ,1990.
Reported on Form 10-K for the period ended December 31, 1993. On April
21, 1994 the court entered another consent order dismissing without
prejudice all claims against the defendant Clifford H. Coyman (the
former president and CEO of United Jersey Bank) and dismissing with
prejudice all claims against the outside director defendants (Robert L.
Boyle, Elinor J. Ferdon, Walter L. Dealtry, Fred G. Harvey, Francis J.
Mertz, Henry S. Patterson II, James A. Skidmore, Jr. and Joseph M.
Tabak.) On the same day, the court entered a consent order
conditionally certifying the matter to proceed as a class action
pursuant to Rule 23 of the Federal Rules of Civil Procedure with
respect to Counts I, II, and VI of the Complaint, on behalf of a
plaintiff class consisting of all persons who purchased UJB's common
stock during the period beginning February 1, 1988 through and
including July 18, 1990, and who allegedly sustained damages thereby.
In re Payroll Express Corporation of New York and Payroll Express
Corporation, United States Bankruptcy Court for the Southern District
of New York, Case Nos. 92-B-43149 (CB) and 92-B-43150 (CB), filed June
5, 1992.
Reported on Form 10-K for the period ended December 31, 1993.
Frederick Goldman, Inc., another customer of Payroll Express
Corporation ("Payroll"), filed a lawsuit against United Jersey Bank
(the "Bank") on March 21, 1994 entitled Frederick Goldman, Inc. v.
United Jersey Bank and National Westminster Bank New Jersey, United
States District Court for the District of New Jersey, Civil Action No.
94-1281 (ALJ). This lawsuit seeks to recover the sum of $159,726.20
from the Bank based on various causes of action.
In addition, The Trustee in Bankruptcy for Payroll filed a second
adversary proceeding against the Bank on April 22, 1994 entitled John
S. Pereira, as Chapter 11 Trustee of Payroll Express Corporation v.
United Jersey Bank, N.A., United States Bankruptcy Court for the
Southern District of New York, Adversary Proceeding No. 94/8297A. This
adversary proceeding seeks to void the Bank's liens on the collateral
securing certain loans to Payroll and recover all payments made to the
Bank ($462,487.50) within one year of the bankruptcy on the grounds
that the loan documents were executed and the loan payments were made
in violation of the provisions of the New Jersey Uniform Fraudulent
Transfer Act and/or the avoidable preference provisions of the
Bankruptcy Code.
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The annual meeting of the shareholders of UJB Financial Corp. was held
April 25, 1994.
The following is a brief description of each matter voted on at the
annual meeting:
Proposal 1 - Election of Directors.
The following incumbent Class I Directors were nominated for election
to the Board of Directors for a three year term: T.J. Dermot Dunphy,
Fred G. Harvey, Francis J. Mertz, T. Joseph Semrod. One incumbent
Class II Director, George L. Miles, Jr., was also nominated for
election to the Board of Directors for a one year term.
Proposal 2 - Increase in Authorized Common Stock.
A proposal to increase the authorized Common Stock, par value $1.20 per
share, of UJB Financial Corp. from 65 million to 130 million shares was
submitted to the shareholders for approval as required by New Jersey
law.
Proposal 3 - Independent Accountants.
Shareholders were presented with a proposal to ratify the selection of
KPMG Peat Marwick, independent certified public accountants, to audit
the consolidated financial statements of UJB Financial Corp. and its
subsidiaries for the year ending December 31, 1994.
Proposal 4 - Shareholder Proposal Relating to Cumulative Voting.
A shareholder submitted the following precatory resolution for approval
of the shareholders:
RESOLVED: That the stockholders of UJB Financial
Corporation, assembled in annual meeting in person and
by proxy, hereby request the Board of Directors to take
the steps necessary to provide for cumulative voting in
the election of directors, which means each stockholder
shall be entitled to as many votes as shall equal the
number of shares he or she owns multiplied by the
number of directors to be elected, and he or she may
cast all of such votes for a single candidate, or any
two or more of them as he or she may see fit.
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Proposal 5 - Shareholder Proposal Relating to Confidential Voting.
A shareholder submitted the following precatory resolution for approval
of the shareholders:
RESOLVED: That the shareholders request that the
Board of Directors:
Take all necessary steps to implement a system of
confidential voting whereby (a) all proxies, ballots
and voting tabulations that identify shareholders shall
be kept secret and (b) independent third parties shall
tabulate such votes.
The results of the voting at the annual meeting was as follows:
Proposal
SHARES
1 - Election of Directors FOR WITHHELD
T.J. Dermot Dunphy............. 43,538,162 1,078,409
Fred G. Harvey................. 43,497,904 1,118,667
Francis J. Mertz............... 43,520,538 1,096,033
T. Joseph Semrod............... 43,393,687 1,222,884
George L. Miles, Jr............ 43,492,355 1,124,216
SHARES
FOR AGAINST ABSTAIN
2 Increase in Authorized
Common Stock 40,906,920 3,325,330 384,321
3 Independent Accountants 43,904,701 432,121 279,749
4 Shareholder Proposal
Relating to
Cumulative Voting 6,558,461 27,661,263 1,130,475
5 Shareholders Proposal
Relating to
Confidential Voting 11,350,380 22,744,266 1,255,553
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
(10)C.(iii) Compensation Committee Interpretation of Section
5(e)(ii)(F) of the UJB Financial Corp., 1993 Incentive
Stock and Option Plan.
(11) UJB Financial Corp. computation of net income per common
share for the three months ended March 31, 1994 and 1993.
(28)A UJB Financial Corp. consolidated balance sheets as of
March 31, 1994, December 31, 1993 and March 31, 1993.
(28)B UJB Financial Corp. consolidated statements of income for
the three months ended March 31, 1994 and 1993.
(28)C UJB Financial Corp. consolidated statements of cash flows
for the three months ended March 31, 1994 and 1993.
(28)D UJB Financial Corp. consolidated statements of
shareholders' equity as of March 31, 1994 and 1993.
(28)E UJB Financial Corp. consolidated average balance sheets
with resultant interest and rates for the three months
ended March 31, 1994 and 1993
(b) Reports on Form 8-K
In a Current Report on Form 8-K, dated March 18, 1994, the Company,
under Item 5 - Other Events and Item 7 - Financial Statements and
Exhibits, reported the following:
On March 18, 1994, the Company selected portions of the 1993 Annual
Report to Shareholders, namely:
Consolidated Balance Sheets at December 31, 1993 and 1992; Consolidated
Statements of Income for the years ended December 31, 1993, 1992 and
1991; Consolidated Statements of Shareholders' Equity at December 31,
1993, 1992 and 1991; Consolidated Statements of Cash Flows for the
years ended December 31, 1993, 1992 and 1991; and Notes to Consolidated
Financial Statements.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
UJB FINANCIAL CORP.
Registrant
DATE: May 16, 1994 BY: s/WILLIAM J. HEALY
------------------
William J. Healy
Executive Vice President and Comptroller
(Chief Accounting Officer)
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EXHIBIT INDEX
Exhibit No.
(10)C.(iii) Compensation Committee Interpretation of Section
5(e)(ii)(F) of the UJB Financial Corp., 1993 Incentive
Stock and Option Plan.
(11) UJB Financial Corp. computation of net income per common
share for the three months ended March 31, 1994 and 1993.
(28)A UJB Financial Corp. consolidated balance sheets as of
March 31, 1994, December 31, 1993 and March 31, 1993.
(28)B UJB Financial Corp. consolidated statements of income for
the three months ended March 31, 1994 and 1993.
(28)C UJB Financial Corp. consolidated statements of cash flows
for the three months ended March 31, 1994 and 1993.
(28)D UJB Financial Corp. consolidated statements of
shareholders' equity as of March 31, 1994 and 1993.
(28)E UJB Financial Corp. consolidated average balance sheets
with resultant interest and rates for the three months
ended March 31, 1994 and 1993
Exhibit (10)C.(iii)
UJB FINANCIAL CORP.
(A New Jersey Business Corporation)
Unanimous Consent of Compensation Committee Members
Pursuant to Section 14A:6-7.1(5) of the New Jersey Business
Corporation Act, and Article III, Section 10 of the By-Laws of this
Corporation, the undersigned, being all of the members of the
Compensation Committee of the above-named Corporation, hereby
consent and agree that the following interpretation to the 1993
Incentive Stock and Option Plan be adopted by this Compensation
Committee, as follows:
5(e)(ii)(F) Any employee who leaves employment after the
employee has been notified that the employee's
employment will terminate under the Policy on Work
Force Adjustment will be treated as an involuntary
termination other than for cause and have three
months from the employee's going off payroll to
exercise options which were exercisable at the time
the employee goes off payroll.
This Unanimous Consent shall be filed by the Secretary with
the minutes of this Committee.
Dated: As of March 28, 1994
/s/ Robert L. Boyle /s/ T.J.Dermot Dunphy
Robert L. Boyle T.J. Dermot Dunphy
/s/ Elinor J. Ferdon /s/ Francis J. Mertz
Elinor J. Ferdon Francis J. Mertz
/s/ Henry S. Patterson II /s/ Joseph M. Tabak
Henry S. Patterson II Joseph M. Tabak
The foregoing Unanimous Consent of Directors was executed
pursuant to Section 14A:6-7.1(5) of the New Jersey Business
Corporation Act and filed with the Secretary of the Corporation on
the 28th day of March, 1994.
/s/ Richard F. Ober, Jr.
Richard F. Ober, Jr., Secretary
<TABLE>
UJB FINANCIAL CORP. Exhibit (11)
COMPUTATION OF NET INCOME PER COMMON SHARE
(dollars in thousands, except per share data)
<CAPTION>
Three Months Ended
March 31,
---------------------
1994 1993
--------- ---------
<S> <C> <C>
Average number of common
shares outstanding
(in thousands) (A) 51,772 51,019
========= =========
Net income $27,390 $20,343
less: Preferred dividends 450 450
--------- ---------
Net income available to
common shareholders (B) $26,940 $19,893
========= =========
Net income per common share (B)/(A) $0.52 $0.39
========= =========
<FN>
Note: The dilutive effect of stock options and equity contracts in 1994 and 1993 was not
material for all periods shown.
</TABLE>
<TABLE>
UJB FINANCIAL CORP. Exhibit (28)A
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
<CAPTION>
March 31, December 31, March 31,
1994 1993 1993
Assets ------------ ------------ ------------
<S> <C> <C> <C>
Cash and cash equivalents
Cash and due from banks $ 694,512 $ 720,404 $ 589,646
Federal funds sold and securities purchased under agreements to resell 15,375 99,500 169,900
------------ ------------ ------------
Total cash and cash equivalents 709,887 819,904 759,546
Interest bearing deposits with banks 37,107 19,962 6,380
Trading account securities 30,628 29,735 32,907
Investment securities available for sale 1,001,108 1,162,088 712,490
Investment securities:
U.S. Government and Federal agencies 1,452,387 1,267,613 2,166,534
States and political subdivisions 298,460 308,004 363,833
Other securities 1,542,822 881,096 591,942
------------ ------------ ------------
Total investment securities 3,293,669 2,456,713 3,122,309
Loans (net of unearned discount):
Commercial 4,386,732 4,235,631 4,386,875
Mortgage 2,343,062 2,377,440 2,318,525
Instalment 2,002,140 1,994,023 2,043,492
------------ ------------ ------------
Total loans 8,731,934 8,607,094 8,748,892
Less: Allowance for loan losses 239,449 242,104 253,086
------------ ------------ ------------
Net loans 8,492,485 8,364,990 8,495,806
Premises and equipment 165,578 167,477 169,901
Other real estate owned, net of reserve 69,462 72,275 112,601
Accrued interest receivable 75,506 71,728 79,559
Due from customers on acceptances 16,021 20,126 19,119
Other assets 262,485 225,551 244,780
------------ ------------ ------------
Total Assets $ 14,153,936 $ 13,410,549 $ 13,755,398
============ ============ ============
Liabilities and Shareholders' Equity
Deposits:
Non-interest bearing demand deposits $ 2,785,190 $ 2,802,496 $ 2,329,341
Interest bearing deposits:
Savings and time deposits 8,392,520 8,427,272 8,828,094
Commercial certificates of deposit of $100,000 and over 244,943 226,586 217,941
------------ ------------ ------------
Total deposits 11,422,653 11,456,354 11,375,376
Commercial paper 51,509 33,359 63,356
Other borrowed funds 1,241,104 549,449 984,036
Long-term debt 208,741 208,459 216,121
Accrued interest payable 27,136 22,786 40,869
Bank acceptances outstanding 16,021 20,126 19,119
Accrued expenses and other liabilities 186,777 143,942 119,138
------------ ------------ ------------
Total liabilities 13,153,941 12,434,475 12,818,015
Shareholders' equity :
Preferred stock: Authorized 4,000,000 shares without par value:
Series B: Authorized 1,200,000 shares; issued and outstanding 600,166
in 1994 and 1993, adjustable-rate cumulative, $50 stated value 30,008 30,008 30,008
Common stock par value $1.20:
Authorized 65,000,000 shares; issued and outstanding
51,873,981 at March 31, 1994, 51,631,856 at
December 31, 1993 and 51,114,539 at March 31, 1993 62,249 61,958 61,338
Surplus 388,263 384,229 374,712
Retained earnings 515,973 499,879 471,325
Net unrealized gain on investment securities available for sale 3,502 - -
------------ ------------ ------------
Total shareholders' equity 999,995 976,074 937,383
------------ ------------ ------------
Total Liabilities and Shareholders' Equity $ 14,153,936 $ 13,410,549 $ 13,755,398
============ ============ ============
Note: Certain 1993 loan balances have been restated for comparative purposes.
</TABLE>
<TABLE>
UJB FINANCIAL CORP. Exhibit (28)B
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share data)
<CAPTION>
Three Months Ended
March 31,
----------------------
1994* 1993**
---------- ----------
<S> <C> <C>
Interest Income
Interest and fees on loans $ 156,603 $ 166,019
Interest on investment securities:
taxable 37,497 40,039
tax-exempt 5,441 6,864
Interest on investment securities available for sale 13,656 9,546
Interest on Federal funds sold and securities
purchased under agreements to resell 210 551
Interest on trading account securities 257 364
Interest on deposits with banks 157 125
---------- ----------
Total interest income 213,821 223,508
Interest Expense
Interest on savings and time deposits 54,296 73,234
Interest on commercial certificates of deposit
$100,000 and over 1,872 1,589
Interest on borrowed funds 15,366 12,061
---------- ----------
Total interest expense 71,534 86,884
---------- ----------
Net interest income 142,287 136,624
Provision for loan losses 18,500 25,000
---------- ----------
Net interest income after provision for loan losses 123,787 111,624
Non-Interest Income
Service charges on deposit accounts 15,884 14,759
Service and loan fee income 9,082 7,732
Trust income 5,807 5,574
Investment securities gains 1,275 6,559
Trading account gains 79 444
Other 11,639 12,094
---------- ----------
Total non-interest income 43,766 47,162
Non-Interest Expenses
Salaries 43,735 44,620
Pension and other employee benefits 13,770 14,868
Occupancy, net 13,687 12,641
Furniture and equipment 11,782 10,843
Other real estate provision and operating expenses 4,053 14,940
FDIC insurance assessment 6,747 8,069
Advertising and public relations 2,690 2,577
Other 25,889 28,198
---------- ----------
Total non-interest expenses 122,353 136,756
---------- ----------
Income before income taxes 45,200 22,030
Federal and state income taxes 16,079 5,503
---------- ----------
Income before cumulative effect of a change in accounting principle 29,121 16,527
Cumulative effect of a change in accounting principle (1,731) 3,816
---------- ----------
Net Income $ 27,390 $ 20,343
========== ==========
Net Income Per Common Share:
Income before cumulative effect of a change in accounting principle $ 0.55 $ 0.32
Cumulative effect of a change in accounting principle (0.03) 0.07
---------- ----------
Net Income Per Common Share $ 0.52 $ 0.39
========== ==========
Average Common Shares Outstanding (in thousands) 51,772 51,019
========== ==========
<FN>
* Effective January 1994, the company adopted SFAS No.112, Accounting for Postemployment Benefits.
** Effective January 1993, the company adopted SFAS No.109, Accounting for Income Taxes.
</TABLE>
<TABLE>
UJB FINANCIAL CORP. Exhibit (28)C
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
<CAPTION>
Three Months Ended
March 31,
-----------------------
1994 1993
----------- -----------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 27,390 $ 20,343
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses and other real estate 20,860 37,500
Depreciation, amortization and accretion 7,673 6,098
Gains on sales of investment and trading account securities (1,354) (7,003)
Gains on sales of mortgages held for sale (301) (648)
Gains on the sales of other real estate owned (336) (160)
Proceeds from the sales of other real estate owned 3,812 9,718
Proceeds from the sales of mortgages held for sale 61,056 59,560
Originations of mortgages held for sale (47,289) (45,752)
Net increase in trading account securities (814) (10,502)
Increase in accrued interest receivable and other assets (39,592) (46,376)
Increase in accrued interest payable, accrued
expenses and other liabilities 43,080 35,621
----------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 74,185 58,399
----------- -----------
INVESTING ACTIVITIES
Proceeds from maturities of investment securities 419,300 138,747
Purchases of investment securities (1,259,319) (627,674)
Purchases of investment securities available for sale - (207,770)
Proceeds from maturities of investment securities available for sale 163,292 46,385
Proceeds from the sales of investment securities available for sale 4,461 336,732
Net (increase) decrease in interest bearing deposits with banks (17,145) 7,439
Proceeds from the sales of loans - 44,803
Net increase in loans (161,299) (83,297)
Purchases of premises and equipment, net (2,907) (1,581)
----------- -----------
NET CASH USED BY INVESTING ACTIVITIES (853,617) (346,216)
----------- -----------
FINANCING ACTIVITIES
Net increase (decrease) in demand and savings deposits 42,473 (229,156)
Net decrease in time deposits (76,174) (182,129)
Net increase in short-term borrowings 711,163 343,622
Principal payments on long-term debt (2,116) (544)
Proceeds from the issuance of long-term debt 1,040 -
Dividends paid (11,296) (8,082)
Proceeds from issuance of common stock under dividend
reinvestment and other stock plans 4,325 4,668
Other, net - (563)
----------- -----------
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES 669,415 (72,184)
----------- -----------
DECREASE IN CASH AND CASH EQUIVALENTS (110,017) (360,001)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 819,904 1,119,547
----------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 709,887 $ 759,546
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid:
Interest payments $ 67,184 $ 82,719
Income tax payments 2,081 207
Noncash investing activities:
Loans made in conjunction with the sale of other real estate owned 1,080 1,968
Transfer of loans to other real estate 4,745 16,482
</TABLE>
<TABLE>
UJB FINANCIAL CORP. Exhibit (28)D
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(dollars in thousands)
<CAPTION>
Net Total
Preferred Common Retained Unrealized Shareholders'
Stock Stock Surplus Earnings Gain Equity
-------- -------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1992 $30,008 $61,037 $370,345 $458,880 $ - $920,270
Net Income - - - 20,343 - 20,343
Cash dividends declared:
Preferred stock - Series B - - - (450) - (450)
Common Stock - - - (8,195) - (8,195)
Common stock issued:
Dividend reinvestment and other stock plans
(159,403 shares) - 192 3,677 - - 3,869
Exercise of stock options, net (91,105 shares) - 109 690 - - 799
Change in valuation allowance for
marketable equity securities - - - 747 - 747
-------- -------- --------- --------- --------- ---------
Balance, March 31,1993 $30,008 $61,338 $374,712 $471,325 $ - $937,383
======== ======== ========= ========= ========= =========
Balance, December 31, 1993 $30,008 $61,958 $384,229 $499,879 $ - $976,074
Net Income - - - 27,390 - 27,390
Cash dividends declared:
Preferred stock - Series B - - - (450) - (450)
Common Stock - - - (10,846) - (10,846)
Common stock issued:
Dividend reinvestment and other stock plans
(145,036 shares) - 174 3,223 - - 3,397
Exercise of stock options, net (97,089 shares) - 117 811 - - 928
Net unrealized gain on investment securities
available for sale - - - - 3,502 3,502
-------- -------- --------- --------- --------- ---------
Balance, March 31, 1994 $30,008 $62,249 $388,263 $515,973 $3,502 $999,995
======== ======== ========= ========= ========= =========
</TABLE>
<TABLE>
UJB FINANCIAL CORP. Exhibit (28)E
CONSOLIDATED AVERAGE BALANCE SHEETS WITH RESULTANT INTEREST AND RATES
(Tax-Equivalent Basis, dollars in thousands)
<CAPTION>
Three Months Ended March 31
-------------------------------------------------------------
1994 1993
----------------------------- -----------------------------
Average Average Average Average
Balance Interest Rate Balance Interest Rate
------------ -------- ------- ------------ -------- -------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Interest earning assets:
Federal funds sold and securities purchased
under agreements to resell $ 15,737 $ 210 5.41 % $ 71,011 $ 551 3.15 %
Interest bearing deposits with banks 20,598 157 3.09 16,645 125 3.05
Trading account securities 29,530 289 3.97 24,443 377 6.26
Investment securities available for sale 1,083,194 13,656 5.04 820,866 9,546 4.65
Investment securities:
U.S. Government and Federal agencies 1,438,355 21,384 5.95 2,173,419 36,600 6.74
States and political subdivisions 301,167 8,341 11.08 368,760 10,040 10.89
Other securities 1,252,750 16,116 5.15 192,932 3,574 7.41
------------ -------- ------- ------------ -------- -------
Total investment securities 2,992,272 45,841 6.13 2,735,111 50,214 7.34
------------ -------- ------- ------------ -------- -------
Loans:
Commercial 4,259,795 73,289 6.98 4,401,128 75,633 6.97
Mortgage 2,358,481 45,726 7.76 2,310,029 48,420 8.38
Instalment 1,992,022 38,477 7.83 2,043,695 42,859 8.51
------------ -------- ------- ------------ -------- -------
Total loans 8,610,298 157,492 7.42 8,754,852 166,912 7.73
------------ -------- ------- ------------ -------- -------
Total interest earning assets 12,751,629 217,645 6.92 12,422,928 227,725 7.43
------------ -------- ------- ------------ -------- -------
Non-interest earning assets:
Cash and due from banks 850,200 796,966
Allowance for loan losses (247,630) (275,059)
Other assets 571,266 605,652
------------ ------------
Total non-interest earning assets 1,173,836 1,127,559
------------ ------------
TOTAL ASSETS $ 13,925,465 $ 13,550,487
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest bearing liabilities:
Savings and time deposits $ 5,417,054 26,522 1.99 $ 5,289,038 33,160 2.54
Other time deposits 2,950,401 27,774 3.82 3,598,629 40,074 4.52
Commercial certificates of deposit
$100,000 and over 264,983 1,872 2.87 215,210 1,589 2.99
------------ -------- ------- ------------ -------- -------
Total interest bearing deposits 8,632,438 56,168 2.64 9,102,877 74,823 3.33
------------ -------- ------- ------------ -------- -------
Commercial paper 36,068 272 3.06 71,112 514 2.93
Other borrowed funds 1,052,684 10,491 4.04 674,252 6,577 3.96
Long-term debt 214,789 4,603 8.69 219,776 4,970 9.17
------------ -------- ------- ------------ -------- -------
Total interest bearing liabilities 9,935,979 71,534 2.92 10,068,017 86,884 3.50
------------ -------- ------- ------------ -------- -------
Non-interest bearing liabilities:
Demand deposits 2,802,583 2,421,013
Other liabilities 190,353 124,636
------------ ------------
Total non-interest bearing liabilities 2,992,936 2,545,649
Shareholders' equity 996,550 936,821
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 13,925,465 $ 13,550,487
============ ============
Net interest income (tax-equivalent basis) 146,111 4.00 % 140,841 3.93 %
======= =======
Tax-equivalent basis adjustment (3,824) (4,217)
--------- ---------
Net Interest Income $ 142,287 $ 136,624
========= =========
Net Interest Income as a Percent of Interest
Earning Assets (tax-equivalent basis) 4.65 % 4.60 %
======= =======
<FN>
Note: -The tax-equivalent adjustment was computed based on a Federal income tax rate of 35% for 1994 and 1993.
-Average balances and rates include non-accruing and renegotiated loans.
-Certain 1993 loan balances have been restated for comparative purposes.
</TABLE>
