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, 1995
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or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number: 1-6451
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UJB Financial Corp.
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(Exact name of registrant as specified in its charter)
New Jersey 22-1903313
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(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
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(Address of principal executive offices) (Zip Code)
(609) 987-3200
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(Registrant's telephone number, including area code)
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(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, 1995 there were 55,306,735 shares of common stock,
$1.20 par value, outstanding.
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PART I. FINANCIAL INFORMATION
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ITEM 1. FINANCIAL STATEMENTS.
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In accordance with Instruction D, included herein as Exhibit
(28)A is UJB Financial Corp. consolidated balance sheets as of
March 31, 1995, December 31, 1994 and March 31, 1994; as Exhibit
(28)B is UJB Financial Corp. consolidated statements of income
for the three months ended March 31, 1995 and 1994; and as
Exhibit (28)C is UJB Financial Corp. consolidated statements of
cash flows for the three months ended March 31, 1995 and 1994.
Also included herein as Exhibit (28)D is UJB Financial Corp.
consolidated statements of shareholders' equity as of March 31,
1995 and 1994; as Exhibit (28)E is UJB Financial Corp.
consolidated average balance sheets with resultant interest and
rates for the three months ended March 31, 1995 and 1994; and as
Exhibit (28)F is UJB Financial Corp. consolidated
reconciliations of allowance for loan losses for the three
months ended March 31, 1995 and 1994.
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. Prior
period information has been restated to include the acquisition
of VSB Bancorp, Inc. (VSB). This acquisition occurred on July 1,
1994 and was accounted for on the pooling-of-interests method.
Prior to the combination, VSB's fiscal year ended September 30.
In recording the pooling of interests, an adjustment was made to
shareholders' equity as of January 1, 1994 to reflect the effect
of including VSB's results of operations for the three months
ended December 31, 1993. On September 16, 1994, the Company
acquired Palisade Savings Bank, FSB (Palisade). This
acquisition was recorded under the purchase method of
accounting, with the operating results of Palisade included from
the date of acquisition.
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 1994 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 the Company, the
results of its operations and changes in its cash flows. The
financial statements presented, in all material respects, comply
with the current reporting requirements of supervisory
authorities.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
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FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
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FINANCIAL CONDITION
March 31, 1995 versus December 31, 1994
Total assets at March 31, 1995 were $15.2 billion, a decrease of
$187.0 million or 1.2 percent from year-end 1994. The decline
in total assets was primarily related to a decrease in
investment securities.
Investment securities at March 31, 1995 were $3.9 billion, a
decrease of $171.6 million or 4.2 percent from year-end 1994.
The decline from year-end 1994 was the result of $207.0 million
in maturities, offset by $33.4 million in purchases. This
portfolio is recorded at amortized cost. At March 31, 1995, the
aggregate market value of the investment portfolio was $3.8
billion which represented 97.3 percent of the carrying value.
The aggregate market value at December 31, 1994 was $3.9 billion
or 95.3 percent of the carrying value.
At March 31, 1995, investment securities available for sale,
reported at fair value, amounted to $229.8 million. These
securities increased $28.6 million or 14.2 percent from year-end
1994, and comprised $116.6 million of U.S. Government and agency
collateralized mortgage obligations and $113.2 million of other
securities. During the first quarter of 1995, $32.5 million of
securities were purchased, predominately U.S. Government and
agencies. This increase was partially offset by maturities of
$3.3 million and sales of $.6 million.
At March 31, 1995, total loans amounted to $9.7 billion and
increased $69.1 million or .7 percent from year-end 1994.
Mortgage loans increased $80.5 million or 2.9 percent from
December 31, 1994 to $2.9 billion at March 31, 1995. Instalment
loans increased $12.5 million or .6 percent from year-end 1994
to $2.3 billion. Partially offsetting these increases,
commercial loans decreased $23.9 million or .5 percent remaining
at $4.6 billion at March 31, 1995.
Total deposits were $12.4 billion at March 31, 1995, a decrease
of $209.5 million or 1.7 percent from December 31, 1994. Demand
deposits decreased $306.6 million or 9.4 percent from year-end
1994 to $3.0 billion following seasonal patterns. Retail
savings and time deposits increased $33.9 million or .4 percent
from December 31, 1994 to $9.0 billion. Commercial certificates
of deposit $100,000 and over were $434.4 million, an increase of
$63.2 million or 17.0 percent compared to December 31, 1994.
Borrowed funds, including commercial paper and long-term debt,
at March 31, 1995 decreased $65.9 million or 4.3 percent from
December 31, 1994 to $1.5 billion.
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Cash flows from maturities and principal pay downs on investment
securities were used to reduce the level of borrowed funds from
year-end 1994.
Total shareholders' equity increased $29.0 million or 2.6
percent from December 31, 1994 to $1.1 billion. Unrealized
gains and losses on investment securities were recorded net of
taxes as a separate component of shareholders' equity. As of
March 31, 1995, the unrealized loss recorded in equity amounted
to $6.7 million, compared to $9.2 million for the prior quarter.
The leverage ratio of the Company was 7.30 percent at March 31,
1995, compared to 7.02 percent at December 31, 1994. Under the
risk-based capital guidelines, the Company's Tier I capital was
9.59 percent and total capital was 12.40 percent at March 31,
1995, compared with 9.27 percent and 12.04 percent,
respectively, at December 31, 1994. The current minimum
regulatory guidelines for Tier I and total capital ratios are
4.0 percent and 8.0 percent, respectively.
March 31, 1995 versus March 31, 1994
Compared to March 31, 1994, total assets increased $724.0
million or 5.0 percent. Included in this increase was the
impact of the purchase acquisition of Palisade, consummated on
September 16, 1994. Palisade had total assets of $324.2
million, loans of $164.8 million and deposits of $266.7 million.
At March 31, 1995, investment securities available for sale
decreased $771.3 million or 77.0 percent from the prior year.
Contributing to this decline was a $707.8 million transfer of
securities to the held-to-maturity portfolio during the second
quarter of 1994. As a result of the acquisition of Palisade,
$121.6 million of securities were added to the portfolio.
Investment securities at March 31, 1995 increased $387.0 million
or 10.9 percent from March 31, 1994. This increase was
primarily the result of the transfer of securities from the
available-for-sale category offset by maturities of $513.1
million during 1994.
Compared to March 31, 1994, total loans increased $862.9 million
or 9.7 percent. Commercial loans increased $216.5 million or
4.9 percent. Mortgage loans increased $414.7 million or 16.9
percent. The Palisade acquisition represented $157.5 million of
this mortgage loan increase. Compared to March 31, 1994
instalment loans increased $231.7 million or 11.5 percent.
Total deposits increased $641.0 million or 5.5 percent from a
year ago. The Palisade acquisition accounted for $266.7 million
of this increase. Compared to March 31, 1994, demand deposits
increased $165.7 million or 5.9 percent and retail savings and
time deposits increased $285.8 million or 3.3 percent. Compared
to March 31, 1994, commercial certificates of deposit $100,000
and over increased $189.4 million or 77.3 percent.
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Compared to March 31, 1994, borrowed funds decreased $49.3
million or 3.2 percent. This decline represented principal
repayments on long-term debt and decreased treasury tax and loan
deposits.
Non-performing Loans and Other Real Estate Owned
Non-performing loans were $169.7 million at March 31, 1995,
compared to $167.6 million at year-end 1994, or 1.74 percent of
total loans in each of those periods. At March 31, 1994,
non-performing loans were $241.6 million or 2.73 percent of
total loans. The $2.0 million increase in the first quarter of
1995 was partially attributable to the adoption of Statement of
Financial Accounting Standards No. 114, Accounting by Creditors
for Impairment of a Loan (SFAS No. 114). This statement
requires in-substance foreclosures to be classified as
non-performing loans. Prior period balances have not been
restated as the amounts have been deemed immaterial. The
implementation of SFAS No. 114 resulted in a reclassification of
$6.4 million, net of specific reserves of $3.8 million, from
other real estate owned (OREO) to non-performing loans.
Compared to March 31, 1994, non-performing loans were down $72.0
million. The reduction in non-performing loans compared to March
31, 1994 reflected ongoing workout efforts, as well as the
year-end 1994 transfer of certain accruing and non-accruing
loans with a net realizable value of $69.1 million to assets
held for accelerated disposition. The following table summarizes
the trends in the components of non-performing loans (dollars in
thousands):
<TABLE>
<CAPTION>
Mar 31, Dec 31, Mar 31,
1995 1994 1994
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<S> <C> <C> <C>
Commercial and industrial $ 52,317 $ 37,362 $ 47,067
Real estate:
Construction and development 42,924 45,075 89,777
Real estate related 74,434 85,210 104,799
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Total real estate 117,358 130,285 194,576
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Total $169,675 $167,647 $241,643
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</TABLE>
At March 31, 1995, OREO was $29.1 million, net of a $12.4
million allowance. Since December 31, 1994, OREO decreased $2.3
million. Compared to March 31, 1994, these net balances
decreased $42.4 million. This decline was in part the result of
a transfer of assets with a net realizable value of $21.8
million from OREO to assets held for accelerated disposition at
year-end 1994.
At December 31, 1994, assets held for accelerated disposition
were $90.9 million reflecting the year-end transfer of assets
from accruing and non-accruing loans and OREO. These assets
were identified for bulk sale in order to accelerate the
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<PAGE>
resolution of non-performing loans and OREO. This balance
declined to $31.8 million at March 31, 1995, reflecting sales
during the quarter.
Allowance for Loan Losses
The allowance for loan losses at March 31, 1995 was $205.8
million or 2.12 percent of loans, compared to $214.2 million or
2.22 percent of loans at December 31, 1994 and $241.5 million or
2.72 percent of loans at March 31, 1994. For the three months
ended March 31, 1995, net charge offs were $23.4 million
compared to $21.2 million the previous year, or .98 percent of
average loans for each period. This compared to net charge offs
of $15.1 million, or .62 percent, in the fourth quarter of 1994,
excluding write downs on transfers to assets held for
accelerated disposition. An additional provision of $10.0
million was recorded in the fourth quarter of 1994 in
conjunction with anticipated bulk sale transactions.
RESULTS OF OPERATIONS
For the first quarter of 1995, net income was $40.0 million or
$.72 per share compared with net income of $28.6 million or $.51
per share earned during the first quarter of 1994. The results
for the first quarter of 1994 were impacted by the adoption of
Statement of Financial Accounting Standards No. 112, Employers'
Accounting for Postemployment Benefits (SFAS No 112), which had
the effect of reducing net income by $1.7 million or $.03 per
share.
Interest income on a tax-equivalent basis was $271.0 million for
the quarter ended March 31, 1995, an increase of $47.9 million
or 21.5 percent compared to the same period in 1994. The
increase in interest income was due to the recent rise in
interest rates and growth in the loan portfolio. The increase
in rates contributed $26.2 million and the increase in volume
provided an additional $17.7 million to interest income on
loans. For the three months ended March 31, 1995 the average
prime rate was 8.83 percent compared to 6.02 percent for the
prior year period. Interest earning assets averaged $13.9
billion during the first three months of 1995, an increase of
$770.3 million or 5.9 percent over the same period of 1994.
Interest expense increased $32.6 million or 44.1 percent for the
quarter ended March 31, 1995 compared to the same period in
1994. This increase reflects the recent rise in interest rates
and the increased cost of retail savings and time deposits.
Also impacting this increase was a disintermediation of funds
from savings and other lower costing deposits to higher costing
retail certificates of deposit. Interest expense on retail
savings and time deposits increased $17.4 million or 30.8
percent, which includes an increase in retail certificates of
deposit of $13.1 million or 69.7 percent. In addition, the
increase in interest expense on borrowed funds, including
commercial paper and long-term debt, and commercial certificates
of deposit $100,000 and over, was $10.7 million and $4.5
million, respectively, over the 1994 three-month period.
Borrowed funds averaged $1.5 billion during the first quarter of
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<PAGE>
1995, an increase of $114.2 million. Commercial certificates of
deposit $100,000 and over increased $189.4 million compared to
the prior year period.
Net interest income on a tax-equivalent basis was $164.4 million
for the quarter ended March 31, 1995, an increase of $15.3
million or 10.3 percent compared to the same period in 1994.
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) was 3.94 percent for the three months ended March
31, 1995 compared to 3.98 percent for the prior year period.
Net interest margin (net interest income on a tax-equivalent
basis as a percentage of average interest earning assets) was
4.80 percent during the first three months of 1995 compared to
4.61 percent during the same period in 1994. The increase in net
interest margin reflected the benefits from an improved asset
mix and favorable spreads between loan yields and deposit costs.
Asset and liability management efforts involve the use of
certain derivative financial instruments. At March 31, 1995,
the notional value of this derivative financial instruments
portfolio consisted of $901.9 million of interest rate swaps.
Interest rate swaps are contractual agreements between two
parties to exchange interest payments at particular intervals.
These swaps are accounted for as hedges and are not recorded on
the balance sheet. Income or expense related to these
instruments is accrued monthly and recognized as an adjustment
to interest income or interest expense for those balance sheet
instruments being hedged. Hedged transactions resulted in a net
interest income reduction of $2.5 million in the first quarter
of 1995, compared to a $2.1 million contribution in the prior
year period. The cost to terminate these contracts at March 31,
1995 was $28.0 million compared to $52.0 million at December 31,
1994.
The provision for loan losses for the first quarter was $15.0
million, compared with $18.5 million for the same period a year
ago.
Non-interest income, including securities transactions, for the
first quarter of 1995 totaled $45.8 million, an increase of $1.7
million or 3.9 percent compared with the first quarter of 1994.
Most of this increase can be attributed to the rise in service
and loan fee income and securities gains offset by a slight
decrease in trust income.
For the first quarter of 1995, net gains of $2.2 million on the
sales of investment securities were realized compared with net
gains of $1.3 million in the first quarter of 1994. These gains
were recognized as $.6 million of securities were sold out of
the available-for-sale portfolio. Service and loan fee income
for the first three months of 1995 increased $1.0 million or
10.7 percent compared with the quarter ended March 31, 1994.
This increase was primarily due to higher merchant bank card
processing fees. Offsetting these increases, trust income
declined $.3 million or 4.7 percent in the first quarter of 1995
compared with the same period in 1994.
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<PAGE>
Non-interest expenses for the first quarter of 1995 totaled
$129.7 million, up $5.7 million, or 4.6 percent compared to the
first quarter of 1994. This increase reflected higher salaries
and benefits in addition to the operating costs of Palisade.
Salaries expense increased $4.2 million or 9.3 percent during
the first quarter of 1995 compared to the prior year period.
More than half of the increase was attributable to merit
increases, which included salary adjustments recorded in
connection with the reorganization along lines of business. In
addition, salaries expense in the first quarter of 1995
reflected the Palisade purchase acquisition and higher levels of
commission and fee based compensation. Pension and other
employee benefits for the first quarter of 1995 were $15.9
million, up $1.9 million or 14.0 percent compared with the first
quarter of 1994. These increases reflected higher payroll
taxes, pension and other postemployment benefit costs.
Occupancy expenses for the first quarter of 1995 decreased $.5
million or 3.7 percent compared to the prior year period. During
the first quarter of 1994, severe weather conditions generated
additional expenses, primarily snow removal costs. Furniture
and equipment expense rose $.7 million or 5.7 percent in the
first quarter of 1995 when compared with the first quarter of
1994.
Other real estate owned expenses were $1.7 million for the first
quarter of 1995, a decrease of $2.4 million or 58.2 percent from
the first quarter of 1994. Included in these amounts is a
provision for losses on other real estate owned and expenses
related to holding property. A provision of $1.4 million for
the first quarter of 1995 was added to the allowance for other
real estate owned. This compares to a provision of $2.4 million
for the first quarter of 1994. Expenses for operating and
maintaining other real estate owned amounted to $.3 million for
the first quarter of 1995 compared with $1.7 million for the
first three months of 1994. The decline in these expenses
reflect the benefits generated from the ongoing workout efforts.
LIQUIDITY
Liquidity is the ability to meet the borrowing needs and deposit
withdrawal requirements of customers and 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.
The consolidated statements of cash flows present the change in
cash and cash equivalents from operating, investing and
financing activities. During the first three months of 1995,
net cash provided by operating activities totaled $185.9
million. Contributing to net cash provided by operating
activities were the results of operations adjusted for the
provisions for loan losses and other real estate owned, and
proceeds from the sales of mortgages held for sale. Net cash
provided by investing activities totaled $58.4 million and was
the result of investment and loan activity. Net cash used in
financing activities totaled $289.0 million, reflecting the
decreases in demand and savings deposits from year-end 1994.
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During the first three months of 1995, proceeds of $210.3
million from maturities in the investment portfolio, including
investment securities available for sale, and an increase of
$33.9 million in savings and time deposits contributed to
liquidity. Offsetting these sources, demand deposits declined
$306.6 million to $3.0 billion from year-end 1994. Other uses
of funds included an increase in total loans of $69.1 million,
purchases totaling $65.9 million of investment securities,
including available for sale, and a decrease of $65.9 million in
borrowed funds.
Additional liquidity is generated from maturities and principal
repayments in the investment portfolio. Scheduled maturities
and anticipated principal repayments of the investment portfolio
will approximate $300 million throughout the balance of 1995.
In addition, all or part of the investment securities available
for sale of $229.8 million could be sold to provide liquidity.
These sources can be used to meet the funding needs during
periods of loan growth. Liquidity is also available through
additional lines of credit and the ability to incur additional
debt. At March 31, 1995, there were $40.0 million of short-term
lines of credit available for general corporate purposes, with
no outstandings. In addition, the banking subsidiaries have
established lines of credit with the Federal Reserve Bank and
the Federal Home Loan Bank of New York which further support
and enhance liquidity.
NEW ACCOUNTING PRONOUNCEMENTS
Statement of Financial Accounting Standards No. 114, Accounting
by Creditors for Impairment of a Loan (SFAS No. 114) and SFAS
No. 118, Accounting by Creditors for Impairment of a Loan -
Income Recognition and Disclosures (SFAS No. 118) were adopted
prospectively by the Company on January 1, 1995. These
statements address the accounting for impaired loans and specify
how allowances for loan losses related to these impaired loans
should be determined. The adoption of the statements did not
effect the level of the overall allowance or the Company's
operating results. Income recognition and charge off policies
were not changed as a result of SFAS No. 114 and SFAS No. 118.
The Company has defined the population of impaired loans to be
all non-accrual loans. Loans are classified as non-accrual when
they are past due for 90 days or more as to principal or
interest, or where reasonable doubt exists as to timely
collectibility. At the time a loan is placed on non-accrual
status, previously accrued and uncollected interest is reversed
against interest income. Interest collections on non-accrual
loans are generally credited to interest income when received.
However, if ultimate collectibility of the principal is in
doubt, interest collections are applied as principal reductions.
The amount of cash basis interest income that was recognized on
impaired loans during the first quarter of 1995 was $.8 million.
Impaired loans greater than $250,000 are individually assessed
to determine that the loan's carrying value is not in excess of
the fair value of the collateral or the present value of the
loan's expected future cash flows. Smaller balance homogeneous
loans that are collectively evaluated for impairment, such as
residential mortgage loans and
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<PAGE>
instalment loans, are specifically excluded from the impaired loan portfolio.
At March 31, 1995, the impaired loan portfolio is primarily
collateral dependent as defined under SFAS No. 114.
At March 31, 1995, the total impaired loan portfolio was $169.7
million for which general and specific allocations to the
allowance for loan losses of $29.1 million were identified.
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PART II. OTHER INFORMATION
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ITEM 1. LEGAL PROCEEDINGS.
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In re Payroll Express Corporation of New York and Payroll
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Express Corporation, United States Bankruptcy Court for the
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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, 1994.
The Trustee in Bankruptcy for Payroll Express Corporation has
filed a cross-motion for summary judgment in opposition to
United Jersey Bank's motion for summary judgment in the
preference action captioned John S. Pereira, as Chapter 11
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Trustee of the Estate of Payroll Express Corporation v. United
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Jersey Bank, United States District Court for the Southern
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District of New York, Civil Action No. 94-1565 (LAP). It is
anticipated that the motions will be heard in June or July, 1995.
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
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The annual meeting of the shareholders of UJB Financial Corp.
was held April 24, 1995.
The following is a brief description of each matter voted on at
the annual meeting:
Proposal 1 - Election of Directors.
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The following incumbent Class II Directors were nominated for
election to the Board of Directors for a three year term: John
G. Collins, Anne Evans Estabrook, George L. Miles, Jr., Henry S.
Patterson II, and Raymond Silverstein.
Proposal 2 - Independent Accountants.
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Shareholders were presented with a proposal to ratify the
selection of KPMG Peat Marwick LLP, independent certified public
accountants, to audit the consolidated financial statements of
UJB Financial Corp. and its subsidiaries for the year ending
December 31, 1995.
Proposal 3 - Shareholder Proposal Relating to Compensation of Executives.
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A shareholder submitted the following precatory resolution for
approval of the shareholders:
RESOLVED: That the shareholders of UJB recommend the Board of
Directors implement the necessary action of downsizing all forms
of TOTAL COMPENSATION OF ALL EXECUTIVES to the level of TWO
TIMES the salary provided to our President of the United States,
that is, no more than $400,000.
Proposal 4 - Shareholder Proposal Relating to Confidential Voting.
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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 the shareholder be kept SECRET and (b) independent
third parties shall tabulate the votes.
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The results of the voting at the annual meeting was as follows:
<TABLE>
<CAPTION>
Proposal SHARES
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FOR WITHHELD
--- --------
<S> <C> <C>
1 - Election of Directors
John G. Collins 48,244,318 538,105
Anne Evans Estabrook 48,219,523 562,900
George L. Miles, Jr. 48,222,526 559,897
Henry S. Patterson II 48,175,493 606,930
Raymond Silverstein 48,217,395 565,028
</TABLE>
<TABLE>
<CAPTION>
SHARES
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FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
2 - Independent Accountants 48,163,172 370,870 248,381
3 - Shareholder Proposal Relating
to Total Compensation of All
Executives 4,322,598 34,205,176 1,911,709
4. Shareholder Proposal Relating
to Confidential Voting 14,424,848 23,852,555 2,162,080
</TABLE>
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
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(a) Exhibits
(11) UJB Financial Corp. computation of net income per common
share for the three months ended March 31, 1995 and 1994.
(27) UJB Financial Corp. financial data schedule - March 31,
1995.
(28)A UJB Financial Corp. consolidated balance sheets as of
March 31, 1995, December 31, 1994 and March 31, 1994.
(28)B UJB Financial Corp. consolidated statements of
income for the three months ended March 31, 1995 and 1994.
(28)C UJB Financial Corp. consolidated statements
of cash flows for the three months ended March 31, 1995 and
1994.
(28)D UJB Financial Corp. consolidated statements of
shareholders' equity as of March 31, 1995 and 1994.
(28)E UJB Financial Corp. consolidated average balance
sheets with resultant interest and rates for the three months
ended March 31, 1995 and 1994.
(28)F UJB Financial Corp. consolidated reconciliations of
allowance for loan losses for the three months ended
March 31, 1995 and 1994.
(b) Reports on Form 8-K
In a Current Report on Form 8-K dated January 19, 1995, the
Company, under Item 5 - Other Events, reported the execution of
an Agreement and Plan of Merger dated January 19, 1995 by and
between the Company and Bancorp New Jersey, Inc. (BNJ) providing
for the merger of BNJ with and into the Company and the exchange
of outstanding BNJ common stock for either UJB common stock at
an exchange ratio to be determined before closing, $43.10 in
cash per share, or a combination of the UJB common stock and the
cash following an election and allocation process.
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<PAGE>
In a Current Report on Form 8-K dated March 10, 1995, the
Company, under Item 5 - Other Events and Item 7 - Financial
Statements and Exhibits, reported the following:
On March 10, 1995, the Company filed selected portions of the
1994 Annual Report to Shareholders, namely:
Consolidated balance sheets at December 31, 1994 and 1993;
consolidated statements of income for the years ended December
31, 1994, 1993 and 1992; consolidated statements of cash flows
for the years ended December 31, 1994, 1993 and 1992;
consolidated statements of shareholders' equity at December 31,
1994, 1993 and 1992; and notes to consolidated financial
statements.
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SIGNATURES
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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 12, 1995 BY: /s/ WILLIAM J. HEALY
----------------------------
William J. Healy
Executive Vice President and Comptroller
(Chief Accounting Officer)
-15-
<PAGE>
EXHIBIT INDEX
-------------
Exhibit No.
- -----------
(11) UJB Financial Corp. computation of net income per common
share for the three months ended March 31, 1995 and 1994.
(27) UJB Financial Corp. financial data schedule - March 31,
1995.
(28)A UJB Financial Corp. consolidated balance sheets as of
March 31, 1995, December 31, 1994 and March 31, 1994.
(28)B UJB Financial Corp. consolidated statements of
income for the three months ended March 31, 1995 and 1994.
(28)C UJB Financial Corp. consolidated statements
of cash flows for the three months ended March 31, 1995 and
1994.
(28)D UJB Financial Corp. consolidated statements of
shareholders' equity as of March 31, 1995 and 1994.
(28)E UJB Financial Corp. consolidated average balance
sheets with resultant interest and rates for the three months
ended March 31, 1995 and 1994.
(28)F UJB Financial Corp. consolidated reconciliations of
allowance for loan losses for the three months ended
March 31, 1995 and 1994.
<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,
---------------------
1995 1994
--------- ---------
<S> <C> <C>
Average number of common
shares outstanding
(in thousands) (A) 55,139 54,401
========= =========
Net income $39,987 $28,560
less: Preferred dividends 474 450
--------- ---------
Net income available to
common shareholders (B) $39,513 $28,110
========= =========
Net income per common share (B)/(A) $0.72 $0.51
========= =========
<FN>
Note: The dilutive effect of stock options and equity contracts in 1995 and 1994 was not
material for all periods shown.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 921926
<INT-BEARING-DEPOSITS> 11996
<FED-FUNDS-SOLD> 3650
<TRADING-ASSETS> 17954
<INVESTMENTS-HELD-FOR-SALE> 229796
<INVESTMENTS-CARRYING> 3921437
<INVESTMENTS-MARKET> 3815953
<LOANS> 9725706
<ALLOWANCE> 205757
<TOTAL-ASSETS> 15242442
<DEPOSITS> 12358279
<SHORT-TERM> 1267595
<LIABILITIES-OTHER> 278618
<LONG-TERM> 204646
<COMMON> 66309
0
30008
<OTHER-SE> 1036987
<TOTAL-LIABILITIES-AND-EQUITY> 15242442
<INTEREST-LOAN> 202901
<INTEREST-INVEST> 63996
<INTEREST-OTHER> 620
<INTEREST-TOTAL> 267517
<INTEREST-DEPOSIT> 80201
<INTEREST-EXPENSE> 106626
<INTEREST-INCOME-NET> 160891
<LOAN-LOSSES> 15000
<SECURITIES-GAINS> 2192
<EXPENSE-OTHER> 129699
<INCOME-PRETAX> 61977
<INCOME-PRE-EXTRAORDINARY> 39987
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 39987
<EPS-PRIMARY> 0.72
<EPS-DILUTED> 0.72
<YIELD-ACTUAL> 4.80
<LOANS-NON> 169347
<LOANS-PAST> 3464
<LOANS-TROUBLED> 328
<LOANS-PROBLEM> 71304
<ALLOWANCE-OPEN> 214161
<CHARGE-OFFS> 26486
<RECOVERIES> 3082
<ALLOWANCE-CLOSE> 205757
<ALLOWANCE-DOMESTIC> 133710
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 72047
</TABLE>
<TABLE>
UJB FINANCIAL CORP. Exhibit (28)A
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
<CAPTION>
March 31, December 31, March 31,
1995 1994 1994
-------------- -------------- --------------
<S> <C> <C> <C>
Assets
Cash and cash equivalents:
Cash and due from banks $ 921,926 $ 925,421 $ 692,904
Federal funds sold and securities purchased under agreements to resell 3,650 44,875 1,300
-------------- -------------- --------------
Total cash and cash equivalents 925,576 970,296 694,204
Interest bearing deposits with banks 11,996 18,809 37,107
Trading account securities 17,954 33,513 30,628
Investment securities available for sale 229,796 201,215 1,001,108
Investment securities:
U.S. Government and Federal agencies 1,903,871 2,016,615 1,686,563
States and political subdivisions 317,561 331,000 298,460
Other securities 1,700,005 1,745,373 1,549,454
-------------- -------------- --------------
Total investment securities 3,921,437 4,092,988 3,534,477
Loans (net of unearned discount):
Commercial 4,603,444 4,627,349 4,386,916
Mortgage 2,871,491 2,790,988 2,456,815
Instalment 2,250,771 2,238,237 2,019,106
-------------- -------------- --------------
Total loans 9,725,706 9,656,574 8,862,837
Less: Allowance for loan losses 205,757 214,161 241,469
-------------- -------------- --------------
Net loans 9,519,949 9,442,413 8,621,368
Premises and equipment 165,804 167,905 169,444
Assets held for accelerated disposition 31,795 90,888 -
Accrued interest receivable 88,234 89,926 78,188
Other real estate owned, net 29,115 31,449 71,479
Due from customers on acceptances 20,664 21,159 16,021
Other assets 280,122 268,911 264,385
-------------- -------------- --------------
Total Assets $ 15,242,442 $ 15,429,472 $ 14,518,409
============== ============== ==============
Liabilities and Shareholders' Equity
Deposits:
Non-interest bearing demand deposits $ 2,954,035 $ 3,260,641 $ 2,788,291
Interest bearing deposits:
Savings and time deposits 8,969,874 8,936,009 8,684,091
Commercial certificates of deposit $100,000 and over 434,370 371,141 244,943
-------------- -------------- --------------
Total deposits 12,358,279 12,567,791 11,717,325
Commercial paper 46,951 42,211 51,509
Other borrowed funds 1,220,644 1,291,219 1,261,139
Long-term debt 204,646 204,754 208,846
Accrued interest payable 46,649 30,234 27,642
Bank acceptances outstanding 20,664 21,159 16,021
Accrued expenses and other liabilities 211,305 167,844 189,665
-------------- -------------- --------------
Total liabilities 14,109,138 14,325,212 13,472,147
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 1995 and 1994, adjustable-rate cumulative, $50 stated value 30,008 30,008 30,008
Common stock par value $1.20:
Authorized 130,000,000 shares; issued and outstanding
55,257,157 at March 31, 1995, 55,005,306 at
December 31, 1994 and 54,502,893 at March 31, 1994 66,309 66,006 65,403
Surplus 416,098 413,429 403,147
Retained earnings 627,560 604,066 544,202
Net unrealized (loss) gain on investment securities, net of tax (6,671) (9,249) 3,502
-------------- -------------- --------------
Total shareholders' equity 1,133,304 1,104,260 1,046,262
-------------- -------------- --------------
Total Liabilities and Shareholders' Equity $ 15,242,442 $ 15,429,472 $ 14,518,409
============== ============== ==============
</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,
-----------------
1995 1994*
-------- --------
<S> <C> <C>
Interest Income
Interest and fees on loans $202,901 $158,991
Interest on investment securities:
Taxable 55,190 40,590
Tax-exempt 5,374 5,441
Interest on investment securities available for sale 3,432 13,656
Interest on Federal funds sold and securities
purchased under agreements to resell 136 202
Interest on trading account securities 255 257
Interest on deposits with banks 229 157
-------- --------
Total interest income 267,517 219,294
Interest Expense
Interest on savings and time deposits 73,814 56,440
Interest on commercial certificates of deposit
$100,000 and over 6,387 1,872
Interest on borrowed funds 26,425 15,679
-------- --------
Total interest expense 106,626 73,991
-------- --------
Net interest income 160,891 145,303
Provision for loan losses 15,000 18,500
-------- --------
Net interest income after provision for loan losses 145,891 126,803
Non-Interest Income
Service charges on deposit accounts 15,944 15,967
Service and loan fee income 10,092 9,114
Trust income 5,532 5,807
Investment securities gains (losses) 2,192 1,275
Trading account gains 279 79
Other 11,746 11,836
-------- --------
Total non-interest income 45,785 44,078
Non-Interest Expenses
Salaries 48,547 44,397
Pension and other employee benefits 15,883 13,937
Occupancy, net 13,350 13,862
Furniture and equipment 12,453 11,787
FDIC assessment 6,839 6,915
Other real estate owned expenses 1,702 4,073
Advertising and public relations 2,911 2,761
Other 28,014 26,251
-------- --------
Total non-interest expenses 129,699 123,983
-------- --------
Income before income taxes 61,977 46,898
Federal and state income taxes 21,990 16,607
-------- --------
Income before cumulative effect of a change in accounting principle 39,987 30,291
Cumulative effect of a change in accounting principle - (1,731)
-------- --------
Net Income $ 39,987 $ 28,560
======== ========
Net Income Per Common Share:
Income before cumulative effect of a change in accounting principle $ 0.72 $ 0.54
Cumulative effect of a change in accounting principle - (0.03)
-------- --------
Net Income Per Common Share $ 0.72 $ 0.51
======== ========
Average Common Shares Outstanding (in thousands) 55,139 54,401
======== ========
<FN>
* Effective January 1994, the company adopted SFAS No. 112, Accounting for Postemployment Benefits.
</FN>
</TABLE>
<TABLE>
UJB FINANCIAL CORP. Exhibit (28)C
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
<CAPTION>
Three Months Ended
March 31,
-----------------------
1995 1994
----------- -----------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 39,987 $ 28,560
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses and other real estate owned 16,375 20,860
Depreciation, amortization and accretion 7,113 8,283
Gains on sales of investment and trading account securities (2,471) (1,354)
Gains on sales of mortgages held for sale (69) (575)
Gains on sales of other real estate owned (1,112) (544)
Proceeds from sales of other real estate owned 5,095 4,677
Proceeds from sales of mortgages held for sale 7,572 80,470
Originations of mortgages held for sale (9,195) (63,825)
Net decrease (increase) in trading account securities 15,838 (814)
Decrease (increase) in accrued interest receivable and other assets 47,389 (39,820)
Increase in accrued interest payable, accrued
expenses and other liabilities 59,381 42,779
----------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 185,903 78,697
----------- -----------
INVESTING ACTIVITIES
Proceeds from maturities of investment securities 207,005 461,928
Purchases of investment securities (33,412) (1,314,341)
Purchases of investment securities available for sale (32,521) -
Proceeds from maturities of investment securities available for sale 3,333 163,292
Proceeds from sales of investment securities available for sale 2,748 4,461
Net decrease (increase) in interest bearing deposits with banks 6,813 (17,145)
Net increase in loans (92,856) (158,351)
Purchases of premises and equipment, net (2,757) (2,938)
----------- -----------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 58,353 (863,094)
----------- -----------
FINANCING ACTIVITIES
Net (decrease) increase in demand and savings deposits (594,993) 39,316
Net increase (decrease) in time deposits 385,481 (73,490)
Net (decrease) increase in short-term borrowings (65,541) 694,319
Principal payments on long-term debt (402) (2,206)
Proceeds from issuance of long-term debt - 1,040
Dividends paid (14,787) (11,535)
Proceeds from issuance of common stock under dividend
reinvestment and other stock plans 2,972 4,371
Other, net (1,706) 2,112
----------- -----------
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES (288,976) 653,927
----------- -----------
DECREASE IN CASH AND CASH EQUIVALENTS (44,720) (130,470)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 970,296 824,674
----------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 925,576 $ 694,204
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid:
Interest payments $ 90,211 $ 72,232
Income tax payments 114 2,882
Noncash investing activities:
Loans made in conjunction with the sale of other real estate owned 134 1,080
Net transfer of loans to other real estate owned 4,928 4,959
Transfer of assets to assets held for accelerated disposition 2,765 -
</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 (Loss) Equity
-------- -------- --------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1993 $30,008 $65,113 $398,723 $525,408 $ - $1,019,252
Net unrealized gain (loss) on investment
securities upon adoption of a change
in accounting principle, net of tax - - - - 9,355 9,355
Adjustment for the pooling of a company
with a different fiscal year end - - 343 1,769 - 2,112
Net income - - - 28,560 - 28,560
Cash dividends declared:
Preferred stock - - - (450) - (450)
Common stock - - - (11,085) - (11,085)
Common stock issued:
Dividend reinvestment and other stock plans
(145,036 shares) - 173 3,270 - - 3,443
Exercise of stock options, net (97,089 shares) - 117 811 - - 928
Change in unrealized gain (loss) on investment
securities, net of tax - - - - (5,853) (5,853)
-------- -------- --------- --------- ----------- -----------
Balance, March 31, 1994 $30,008 $65,403 $403,147 $544,202 $3,502 $1,046,262
======== ======== ========= ========= =========== ===========
Balance, December 31, 1994 $30,008 $66,006 $413,429 $604,066 ($9,249) $1,104,260
Net income - - - 39,987 - 39,987
Cash dividends declared:
Preferred stock - - - (474) - (474)
Common stock - - - (16,019) - (16,019)
Common stock issued:
Dividend reinvestment and other stock plans
(89,888 shares) - 108 2,161 - - 2,269
Exercise of stock options, net (161,933 shares) - 195 508 - - 703
Change in unrealized gain (loss) on investment
securities, net of tax - - - - 2,578 2,578
-------- -------- --------- --------- ----------- -----------
Balance, March 31, 1995 $30,008 $66,309 $416,098 $627,560 ($6,671) $1,133,304
======== ======== ========= ========= =========== ===========
</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,
-------------------------------------------------------------
1995 1994
----------------------------- -----------------------------
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 $ 8,735 $ 136 6.31 % $ 14,848 $ 202 5.52 %
Interest bearing deposits with banks 15,370 229 6.04 20,598 157 3.09
Trading account securities 18,707 274 5.94 29,530 289 3.97
Investment securities available for sale 205,933 3,432 6.67 1,083,194 13,656 5.04
Investment securities:
U.S. Government and Federal agencies 1,939,294 28,848 5.95 1,664,600 24,385 5.86
States and political subdivisions 321,688 8,040 10.00 301,167 8,341 11.08
Other securities 1,728,868 26,318 6.09 1,260,325 16,208 5.14
------------ -------- ------- ------------ -------- -------
Total investment securities 3,989,850 63,206 6.34 3,226,092 48,934 6.07
------------ -------- ------- ------------ -------- -------
Loans:
Commercial 4,575,110 98,094 8.70 4,259,989 73,290 6.98
Mortgage 2,831,758 57,841 8.17 2,473,165 47,761 7.72
Instalment 2,242,053 47,829 8.65 2,009,828 38,829 7.84
------------ -------- ------- ------------ -------- -------
Total loans 9,648,921 203,764 8.56 8,742,982 159,880 7.42
------------ -------- ------- ------------ -------- -------
Total interest earning assets 13,887,516 271,041 7.92 13,117,244 223,118 6.90
------------ -------- ------- ------------ -------- -------
Non-interest earning assets:
Cash and due from banks 840,231 854,591
Allowance for loan losses (216,672) (249,677)
Other assets 652,571 581,769
------------ ------------
Total non-interest earning assets 1,276,130 1,186,683
------------ ------------
TOTAL ASSETS $ 15,163,646 $ 14,303,927
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest bearing liabilities:
Savings deposits $ 5,190,038 28,961 2.26 $ 5,559,499 27,324 1.99
Other time deposits 3,773,049 44,853 4.82 3,097,913 29,116 3.81
Commercial certificates of deposit
$100,000 and over 454,357 6,387 5.70 264,983 1,872 2.87
------------ -------- ------- ------------ -------- -------
Total interest bearing deposits 9,417,444 80,201 3.45 8,922,395 58,312 2.65
------------ -------- ------- ------------ -------- -------
Commercial paper 50,047 706 5.72 36,068 272 3.06
Other borrowed funds 1,198,364 21,313 7.21 1,089,223 10,804 4.02
Long-term debt 205,904 4,406 8.56 214,789 4,603 8.57
------------ -------- ------- ------------ -------- -------
Total interest bearing liabilities 10,871,759 106,626 3.98 10,262,475 73,991 2.92
------------ -------- ------- ------------ -------- -------
Non-interest bearing liabilities:
Demand deposits 2,940,054 2,805,495
Other liabilities 225,431 194,295
------------ ------------
Total non-interest bearing liabilities 3,165,485 2,999,790
Shareholders' equity 1,126,402 1,041,662
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 15,163,646 $ 14,303,927
============ ============
Net Interest Income (tax-equivalent basis) 164,415 3.94 % 149,127 3.98 %
======= =======
Tax-equivalent basis adjustment (3,524) (3,824)
--------- ---------
Net Interest Income $ 160,891 $ 145,303
========= =========
Net Interest Income as a Percent of Interest
Earning Assets (tax-equivalent basis) 4.80 % 4.61 %
======= =======
<FN>
Note: The tax-equivalent adjustment was computed based on a Federal income tax rate of 35% for 1995 and 1994.
</FN>
</TABLE>
<TABLE>
UJB FINANCIAL CORP. Exhibit (28)F
CONSOLIDATED RECONCILIATIONS OF ALLOWANCE FOR LOAN LOSSES
(dollars in thousands)
<CAPTION>
Three Months Ended March 31,
-----------------------------
1995 1994
------------- -------------
<S> <C> <C>
Balance, January 1 $214,161 $244,154
Provision charged to expense 15,000 18,500
------------- -------------
229,161 262,654
------------- -------------
Net charge offs:
Loans charged off 26,486 24,100
Less recoveries 3,082 2,915
------------- -------------
Net loans charged off 23,404 21,185
------------- -------------
Balance, March 31 $205,757 $241,469
============= =============
</TABLE>
