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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 September 30, 1995
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[ ] 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 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 October 31, 1995 there were 57,667,117 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, incorporated by reference to
this Item 1 and included herein as Exhibit (99)A is UJB
Financial Corp. consolidated balance sheets as of September 30,
1995, December 31, 1994 and September 30, 1994; as Exhibit (99)B
is UJB Financial Corp. consolidated statements of income for the
nine months and three months ended September 30, 1995 and 1994;
and as Exhibit (99)C is UJB Financial Corp. consolidated
statements of cash flows for the nine months ended September 30,
1995 and 1994. Also included herein as Exhibit (99)D is UJB
Financial Corp. consolidated statements of shareholders' equity
as of September 30, 1995 and 1994; as Exhibit (99)E is UJB
Financial Corp. consolidated average balance sheets with
resultant interest and rates for the nine months ended September
30, 1995 and 1994; and as Exhibit (99)F is UJB Financial Corp.
consolidated reconciliations of allowance for loan losses for
the nine months ended September 30, 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. On July 11,
1995, the Company completed the acquisition of Bancorp New
Jersey, Inc. ("Bancorp"). This acquisition was accounted for as
a purchase, and its assets and results of operations are
included from that date.
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
September 30, 1995 versus December 31, 1994
At September 30, 1995, total assets were $15.5 billion, an
increase of $103.6 million or .7 percent from year-end 1994.
The increase in total assets was primarily due the increase in
the loan portfolio offset by the volume decrease in the
investment portfolio. Included in these increases was the
impact of the acquisition of Bancorp. On July 11, 1995,
Bancorp had total assets of $506 million.
Investment securities at September 30, 1995 were $3.6 billion, a
decrease of $453.7 million or 11.1 percent from year-end 1994.
The decline from year-end 1994 was the result of $538.8 million
in maturities, partially offset by $90.0 million in purchases.
This portfolio is recorded at amortized cost. At September 30,
1995, the aggregate market value of the investment portfolio was
$3.6 billion. The aggregate market value at December 31, 1994
was $3.9 billion.
At September 30, 1995, investment securities available for sale,
reported at fair value, amounted to $356.3 million. These
securities increased $155.1 million or 77.1 percent from
year-end 1994, and comprised $251.3 million of U.S. Government
and agency collateralized mortgage obligations and $105.0
million of other securities. During the nine months of 1995,
$215.5 million of securities were purchased, including $171.6
million of securities from the acquisition of Bancorp.
Offsetting these purchases were maturities of $64.1 million and
sales of $4.2 million.
At September 30, 1995, total loans amounted to $10.2 billion and
increased $570.2 million or 5.9 percent from year-end 1994. The
acquisition of Bancorp accounted for $290 million to this
increase. Mortgage loans increased $424.2 million or 15.2
percent from December 31, 1994 to $3.2 billion at September 30,
1995. The acquisition of Bancorp contributed $178.7 million to
this increase to mortgage loans. Instalment loans increased
$194.5 million or 8.7 percent from year-end 1994 to $2.4
billion. The acquisition of Bancorp contributed $75.8 million to
this increase. Partially offsetting these increases, commercial
loans decreased $48.6 million or 1.0 percent from December
31,1994.
Total deposits were $12.9 billion at September 30, 1995, an
increase of $303.8 million or 2.4 percent from December 31,
1994. This increase was primarily attributable to the acquisition
of Bancorp. On July 11, 1995, Bancorp had total deposits
of $451 million. Excluding the acquisition of Bancorp total
deposits decreased 1.2 percent from year-end 1994. Demand
deposits decreased $87.8 million or 2.7 perecent from year-end
1994 to $3.2 billion. Offsetting this decrease
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retail savings and time deposits increased $304.6 million or 3.4 percent
from December 31, 1994 to $9.2 billion. Commercial certificates
of deposit $100,000 and over were $458.2 million, an increase of $87.0
million or 23.5 percent compared to December 31, 1994.
Borrowed funds, including commercial paper and long-term debt,
at September 30, 1995 decreased $397.8 million or 25.9 percent
from December 31, 1994 to $1.1 billion. Cash flows from
maturities and principal paydowns on investment securities were
used to reduce the level of borrowed funds from year-end 1994.
Total shareholders' equity increased $159.7 million or 14.5
percent from December 31, 1994 to $1.3 billion. Unrealized
gains and losses on investment securities were recorded net of
taxes as a separate component of shareholders' equity. As of
September 30, 1995, the unrealized loss recorded in equity
amounted to $3.5 million, compared to $9.2 million from year-end
1994.
Under the risk-based capital guidelines, the Tier I leverage
ratio of the Company was 7.58 percent at September 30, 1995,
compared to 7.02 percent at December 31, 1994. The Company's
Tier I capital was 9.93 percent and total capital was 12.71
percent at September 30, 1995, compared with 9.27 percent and
12.04 percent, respectively, at December 31, 1994. The current
minimum regulatory guideline for the Tier I leverage ratio is
4.0 percent for institutions that have a regulatory rating of
two or more. The current minimum regulatory guidelines for Tier
I and total capital ratios are 4.0 percent and 8.0 percent,
respectively.
Non-performing Loans and Other Real Estate Owned
Non-performing loans were $181.9 million at September 30, 1995,
or 1.78 percent of total loans compared to $167.6 million at
year-end 1994, or 1.74 percent of total loans. At September 30,
1994, non-performing loans were $213.9 million or 2.23 percent
of total loans. Non-performing loans increased from year-end
1994 partially due to the inclusion of one large construction
loan relationship during the second quarter of 1995.
Additionally, non-performing loans were impacted by a $4.1
million increase from the acquisition of Bancorp and
the adoption of Statement of Financial Accounting Standards
No. 114, Accounting by Creditors for Impairment of a Loan
("SFAS No. 114"). The implementation of this Statement
resulted in a reclassification of $6.4 million.
The Company has defined the population of impaired loans to be
all non-accrual loans. At September 30, 1995, the total
impaired loan portfolio was $181.9 million for which general and
specific allocations to the allowance for loan losses of $49.0
million were identified. 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
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amount of cash basis interest income that was recognized on
impaired loans at September 30, 1995 was $1.5 million.
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Compared to September 30, 1994, non-performing loans were down
$32.0 million. The reduction in non-performing loans compared to
September 30, 1994 reflected ongoing workout efforts, as well as
the year-end 1994 transfer of certain accruing and non-accruing
loans to assets held for accelerated disposition. The following
table summarizes the trends in the components of non-performing
loans (dollars in thousands):
Sep 30, Dec 31, Sep 30,
1995 1994 1994
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Commercial and industrial $ 43,259 $ 37,362 $ 44,100
Real estate:
Construction and development 84,628 45,075 66,646
Real estate related 54,038 85,210 103,170
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Total real estate 138,666 130,285 169,816
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Total $181,925 $167,647 $213,916
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At September 30, 1995, other real estate owned ("OREO") was
$27.1 million, net of a $12.2 million allowance. OREO decreased
$4.4 million since December 31, 1994 and decreased $39.6 million
since September 30, 1994. These declines were in part the
result of the SFAS No. 114 reclassification of in-substance
foreclosures from OREO to non-performing loans and a transfer of
assets from OREO to assets held for accelerated disposition at
year-end 1994. These assets were identified for bulk sale in
order to accelerate the resolution of non-performing loans and
OREO. Assets held for accelerated disposition at September 30,
1995 were $22.9 million compared to $90.9 million at December
31, 1994. The decline from year-end 1994 was primarily due to
sales during the year.
Allowance for Loan Losses
The allowance for loan losses at September 30, 1995 was $200.3
million or 1.96 percent of loans, compared to $214.2 million or
2.22 percent of loans at December 31, 1994 and $237.7 million
or 2.48 percent of loans at September 30, 1994. For the three
months ended September 30, 1995, net charge offs were $22.8
million or .90 percent of average loans compared to $21.2
million, or .91 percent the previous year. This compares to net
charge offs of $22.5 million, or .93 percent, in the second
quarter of 1995. For the nine months ended September 30, 1995,
net charge offs were $68.7 million, or .94 percent of average
loans compared to $63.7 million, or .95 percent the previous
year.
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RESULTS OF OPERATIONS
For the third quarter of 1995, net income was $44.0 million or
$.76 per share compared with net income of $38.6 million or $.70
per share earned during the third quarter of 1994. Net income
for the nine months ended September 30, 1995 was $124.4 million
compared with $95.8 million for the nine months of 1994. On a
per share basis, net income for the nine months ended September
30, 1995 was $2.20 compared to $1.73 for the same period in
1994.
Interest income on a tax-equivalent basis was $828.2 million for
the nine months ended September 30, 1995, an increase of $116.5
million or 16.4 percent compared to the same period in 1994. The
increase in interest income was primarily due to both the rise
in interest rates and growth in the loan portfolio. The increase
in rates contributed $63.4 million and the increase in volume
provided an additional $49.3 million to interest income on
loans. For the nine months of 1995, the average prime rate was
8.87 percent compared to 6.81 percent for the prior year period.
Interest earning assets averaged $14.0 billion during the nine
months of 1995, an increase of $556.6 million or 4.1 percent
over the same period of 1994.
Interest expense increased $88.8 million or 36.3 percent for the
nine months ended September 30, 1995 compared to the same period
in 1994. This increase reflects the rise in interest rates and
the resultant increased cost of retail savings and time
deposits. In addition, there 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 $65.3 million or 37.6
percent, which includes an increase in interest on retail
certificates of deposit of $54.6 million or 95.0 percent. In
addition, the increases in interest expense on borrowed funds
and commercial certificates of deposit $100,000 and over were
$12.9 million and $10.6 million, respectively, over the 1994
nine-month period. On average, borrowed funds were $1.3 billion
during the nine months of 1995, a decrease of $305.0 million
from the nine months of 1994. Commercial certificates of deposit
$100,000 and over increased $136.3 million over the comparable
period in 1994.
Net interest income on a tax-equivalent basis was $494.5 million
for the nine months of 1995 compared with $466.8 million for the
nine months ended September 30, 1994, an increase of $27.7
million or 5.9 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) was 3.80 percent for the nine
months ended September 30, 1995 compared to 3.97 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 4.71 percent during the nine months of 1995
compared to 4.63 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.
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Asset and liability management efforts involve the use of
certain derivative financial instruments. At September 30,
1995, the notional value of this derivative financial
instruments portfolio consisted of $819.7 million of interest
rate swaps down from $923.5 million at December 31, 1994.
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 $6.4 million for the nine months of
1995, compared to a $1.8 million contribution in the comparable
period in 1994. The market value of these contracts at
September 30, 1995 was negative $8.0 million compared to
negative $52.0 million at December 31, 1994.
The provision for loan losses for the quarter ended September
30, 1995 was $18.0 million, compared with $18.5 million for the
same period a year earlier. On a year-to-date basis, the
provision was $48.8 million, a decline of $6.8 million or 12.2
percent, compared with the same period in 1994.
Non-interest income, including securities transactions, for the
third quarter of 1995 totaled $45.1 million, an increase of $4.3
million or 10.6 percent compared with the third quarter of 1994.
For the nine months ended September 30, 1995, non-interest
income totaled $130.2 million, an increase of $9.7 million or
8.1 percent from the prior year period. Effective June 30, 1995,
merchant credit card and ATM fees are recorded net of related
processing expenses. Amounts for prior periods have been
reclassified for comparative purposes.
During the third quarter of 1995, service charges on deposit
accounts increased $1.3 million or 8.4 percent over the prior
year period. For the nine months of 1995, service charges on
deposit accounts increased $1.2 million or 2.5 percent compared
to the 1994 nine-month period. These increases were primarily
due to higher fees charged on personal demand deposit accounts.
Service and loan fee income for the third quarter of 1995
decreased $.3 million or 4.6 percent compared with the same
period a year earlier. Service and loan fee income increased
$.6 million or 3.1 percent during the nine month period ended
September 30, 1995 compared to the corresponding period in 1994.
This increase was primarily due to higher commercial loan fees
and merchant bank card processing fees.
Other income for the third quarter of 1995 was $13.5 million, an
increase of $2.2 million or 19.6 percent. For the nine months
of 1995, other income was $37.4 million, an increase of $4.3
million or 13.0 percent. These increases can be
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attributable in part to the gains on the sales of the Pennsylvania
leasing company and several branch facilities.
For the third quarter of 1995, net gains of $1.0 million on the
sales of investment securities were realized compared with net
gains of $.1 million over the prior year period. For the nine
months of 1995, net gains were $5.2 million, compared with net
gains of $1.8 million for the nine months in 1994. These gains
were recognized as $4.2 million of securities were sold out of
the available-for-sale portfolio.
Non-interest expenses for the third quarter of 1995 totaled
$121.0 million, down $.6 million, or .5 percent compared to the
third quarter of 1994 and for the nine months ended September
30, 1995 were $371.2 million, an increase of $5.1 million or 1.4
percent from the 1994 nine month period.
Salaries expense increased $3.5 million or 7.5 percent during
the third quarter of 1995 compared to the third quarter of 1994
and rose $11.1 million or 8.2 percent during the nine months of
1995 compared to the corresponding period in 1994. These
increases were primarily attributable to merit increases and
the purchase of Palisade Savings Bank, FSB in September 1994.
Also contributing to this quarter-to-quarter increase was the
additional salary expense associated with the purchase
acquisition of Bancorp. Pension and other employee benefits for
the third quarter of 1995 were $15.2 million, up $.9 million or
6.1 percent compared with the third quarter of 1994. These
expenses were $47.1 million for the nine months ended September
30, 1995, up $5.4 million or 12.8 percent compared to the
corresponding period in 1994. These increases reflected
pension and other postemployment benefit costs.
Occupancy expenses for the third quarter of 1995 increased $.8
million or 6.5 percent compared to the prior year period. These
expenses were $39.3 million, up $.8 million or 2.2 percent for
the nine months ended September 30, 1995 compared to the
corresponding period in 1994. Furniture and equipment expense
rose $.7 million or 5.8 percent for the third quarter of 1995,
and $1.8 million or 5.0 percent during the first nine months of
1995 when compared with the corresponding periods in 1994.
The FDIC assessment decreased $7.0 million during the third
quarter of 1995 compared to the third quarter of 1994 and
declined $7.1 million during the nine months of 1995 compared to
the 1994 nine-month period. This decrease is attributable to
the lower premiums charged for deposit insurance,
retroactive to June 1, 1995. The company received a $5.2
million premium reduction and a $1.8 million one-time rebate.
The majority of the Company's FDIC deposits are covered under the Bank
Insurance Fund("BIF"). As a result of deposits acquired through the
acquisition of Thrift institutions over the last several years, the
Company has approximately $1.3
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billion of deposits that are insured under the Savings Association
Insurance Fund ("SAIF"). Several proposals are being discussed by Congress
and banking regulators regarding the recapitalization of the SAIF to bring
its funding level up to that of the BIF. Current discussions are considering
a one-time assessment on all SAIF deposits based upon such insured deposits.
Until legislation is finalized by Congress and signed into law, the Company
cannot determine the amount of the assessment. At that time, an accrual
will be established.
Other real estate owned expenses were $2.1 million for the third
quarter of 1995, a decrease of $2.8 million or 57.9 percent from
the third quarter of 1994. On a year-to-date basis, other real
estate owned expenses were $5.8 million for 1995 compared to
$14.5 million for 1994. Included in these amounts was a
provision for losses on other real estate owned and expenses
related to holding property. A provision of $1.6 million for
the third quarter of 1995 and $3.8 million for the nine months
of 1995 was added to the allowance for other real estate owned.
This compares to a provision of $3.1 million for the third
quarter of 1994 and $8.9 million for the nine months ended
September 30, 1994. Expenses for operating and maintaining other
real estate owned amounted to $.5 million for the third quarter
of 1995 and $1.9 million for the nine months ended September 30,
1995, compared with $1.8 million and $5.5 million respectively for the
corresponding periods in 1994. The decline in these expenses
reflect the benefits 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 nine months of 1995, net cash
provided by operating activities totaled $243.6 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 used by investing
activities totaled $340.4 million and was the result of
investment and loan activity. Net cash used in financing
activities totaled $64.3 million, reflecting the reductions in
borrowed funds offset by a net increase in deposits from
year-end 1994.
During the nine months of 1995, proceeds of $602.8 million from
maturities in the investment portfolio, including investment
securities available for sale, and an increase in total deposits
of $303.8 million contributed to liquidity. Offsetting these
sources were increases in total loans of $570.2 million,
purchases of investment
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securities, including investment securities available for sale, totaling
$305.5 million and a decrease of $397.8 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 $175 million throughout the balance of 1995.
In addition, all or part of the investment securities available
for sale of $356.3 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 September 30, 1995, there were $40.0 million of
short-term lines of credit available at the Parent Corporation
for general corporate purposes, with no outstandings. In
addition, the banking subsidiaries have established lines of
credit with the Federal Reserve Bank, the Federal Home Loan
Bank of New York and other correspondent banks which further
support and enhance liquidity.
NEW ACCOUNTING PRONOUNCEMENTS
In May 1995, Statement of Financial Accounting Standards
No.122, Accounting for Mortgage Servicing Rights ("SFAS No.122")
was issued. This Statement requires the recognition of mortgage
servicing rights as an asset when a mortgage loan is sold or
securitized and servicing retained. Also, the Statement requires
companies to measure the impairment of the servicing rights
based on the difference between the servicing rights and their
current value. The Statement is effective for fiscal years
beginning after December 15, 1995 to transactions in which the
Company sells or securitizes mortgage loans with servicing
rights retained. The provisions of this Statement should be
applied to the measurement of impairment for all capitalized
servicing rights, including servicing rights capitalized prior
to the initial adoption of this Statement. The Company does not
expect the adoption of SFAS No. 122 to have a material effect on
its future financial position or results of operations.
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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, U.S. Bankruptcy Court for the Southern
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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 and on Form 10-Q for the periods ended
March 31, 1995 and June 30, 1995. The Trustee in Bankruptcy for
Payroll Express Corporation has settled his claim against the
primary insurance carrier for Payroll (Lloyds) for the policy
limits of $1 million and has sought bankruptcy court approval
for the settlement. The Trustee has commenced litigation
against certain insurance companies which had issued fidelity
insurance policies to Payroll.
In the matter of In re Payroll Express Corporation et al - John
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S. Pereira, as Chapter 11 Trustee of the Estate of Payroll
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Express Corporation, pending in the U.S. District Court for the
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Southern District of New York, the Bank has filed a motion for
summary judgment.
The court has stayed the Towers Financial Corporation matter to
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allow the Beth Israel matter to proceed first. The Beth Israel,
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Frederick Goldman, and New York City Transit Authority matters
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have been consolidated in the U.S. District Court for the
Southern District of New York. The Bank has filed a motion to
dismiss each of these complaints for failure to state a claim
upon which relief may be granted.
A new matter, Copytone, Inc. suing on behalf of itself and
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others similarly situated v. United Jersey Bank New Jersey et
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al. was recently filed in the New York Supreme Court but was
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removed by the Bank to the U.S. District Court for the Southern
District of New York, Civil Action No. 95-3685. This is a
purported class action lawsuit which alleges that Copytone, Inc.
wire transferred approximately $22,000 to the Payroll Express
account, which funds were to be used to cash Copytone's payroll
checks, that Payroll Express failed to do so and that the Bank
refused to return the funds. Copytone also alleges that another
$22,000 in endorsed employee payroll checks and unused funds
were deposited into the Payroll Express accounts and that the
Bank has refused to return these funds. The legal theories are
similar to those asserted in the Beth Israel matter. The Bank
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intends to file a motion to dismiss this matter and, when
briefing is completed, a hearing date will be scheduled for it,
along with the Beth Israel, Frederick Goldman and New York City
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Transit Authority motions.
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Annette Loatman, on behalf of herself and all others similarly
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situated v. United Jersey Bank, U.S. District Court for the
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District of New Jersey, Civil Action 1:95CV05258 (JEI), filed on
October 4, 1995. The plaintiff alleges that she is
representative of a class of Bank customers who obtained
consumer loans (primarily on automobiles and trailers) from the
Bank and who either did not obtain required insurance or
permitted that insurance to lapse, after which the Bank
"force-placed" insurance. The complaint alleges breach of
contract and of the implied covenants of good faith and fair
dealing, unconscionable commercial practices under the New
Jersey Consumer Fraud Act, unjust enrichment, breach of
fiduciary duty and violations of the National Bank Act and
Depository Institution and Monetary Control Act. The Bank
intends to vigorously contest this action and is presently
preparing its response.
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ITEM 5. OTHER EVENTS.
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On September 11, 1995, the Company announced a definitive merger
agreement to merge in a stock-for-stock exchange with Summit
Bancorporation (Summit). Summit has $5.5 billion in assets with
90 branches in northern and central New Jersey. The merger is
expected to be completed in the first quarter of 1996. For a
description of the merger, see the company's current report on
Form 8-K dated September 10, 1995.
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 nine months and three months ended September 30, 1995 and 1994.
(27) UJB Financial Corp. financial data schedule - September 30, 1995.
(99)A UJB Financial Corp. consolidated balance sheets as of September 30,
1995, December 31, 1994 and September 30, 1994.
(99)B UJB Financial Corp. consolidated statements of income for the
nine months and three months ended September 30, 1995 and 1994.
(99)C UJB Financial Corp. consolidated statements of cash flows for the
nine months ended September 30, 1995 and 1994.
(99)D UJB Financial Corp. consolidated statements of shareholders' equity
as of Septemeber 30, 1995 and 1994.
(99)E UJB Financial Corp. consolidated average balance sheets with
resultant interest and rates for the nine months ended
September 30, 1995 and 1994.
(99)F UJB Financial Corp. consolidated reconciliations of allowance for
loan losses for the nine months ended September 30, 1995 and 1994.
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(b) Reports on form 8-K
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In a current report on Form 8-K dated August 1, 1995, the
Company under Item 5 Other Information reported an agreement
and plan of merger providing for the merger of The Flemington
National Bank and Trust Company, a national banking
association, into United Jersey Bank, a New Jersey banking
corporation wholly owned by the Company.
In a current report on Form 8-K dated September 10, 1995, the
Company under Item 5 Other Information reported that the
Company and The Summit Bancorporation (Summit) entered into an
Agreement and Plan of Merger (the Agreement) providing for
among other things (i) the merger of Summit into the Company;
(ii) the exchange of each outstanding share of Common Stock
of Summit for 0.90 shares of Common Stock of the Company, with
cash being paid in lieu of issuing fractional shares of Common
Stock of the Company; and (iii) the exchange of each
outstanding share of the $25 stated value of Adjustable Rate
Cumulative Preferred Stock of Summit for one share of a newly
created class of Preferred Stock of the surviving corporation
in the Merger designated $25 stated value Adjustable Rate
Cumulative Preferred Stock, Series C: all upon satisfaction of
terms and conditions set forth in the Agreement , including
the receipt of approval from the shareholders of both the
Company and Summit and the Board of Governors of the Federal
Reserve System.
-13-
<PAGE>
SIGNATURES
------------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
UJB FINANCIAL CORP.
---------------------------
Registrant
DATE November 14, 199 BY: /s/ WILLIAM J. HEALY
-----------------------------
William J. Healy
Executive Vice President and Comptroller
(Chief Accounting Officer)
-14-
<PAGE>
EXHIBIT INDEX
--------------
Exhibit No.
-----------
(11) UJB Financial Corp. computation of net income per common share
for nine months and three months ended September 30, 1995 and 1994.
(27) UJB Financial Corp. financial data schedule - September 30, 1995.
(99)A UJB Financial Corp. consolidated balance sheets as of September 30,
1995, December 31, 1994 and September 30, 1994.
(99)B UJB Financial Corp. consolidated statements of income for the
nine months and three months ended September 30, 1995 and 1994.
(99)C UJB Financial Corp. consolidated statements of cash flows for the
nine months ended September 30, 1995 and 1994.
(99)D UJB Financial Corp. consolidated statements of shareholders' equity
as of Septemeber 30, 1995 and 1994.
(99)E UJB Financial Corp. consolidated average balance sheets with
resultant interest and rates for the nine months ended
September 30, 1995 and 1994.
(99)F UJB Financial Corp. consolidated reconciliations of allowance for
loan losses for the nine months ended September 30, 1995 and 1994.
<TABLE>
UJB FINANCIAL CORP. Exhibit (11)
COMPUTATION OF NET INCOME PER COMMON SHARE
(dollars in thousands, except per share data)
<CAPTION>
Six Months Ended Three Months Ended
June 30, June 30,
------------------- ---------------------
1995 1994 1995 1994
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Average number of common
shares outstanding
(in thousands) (A) 55,946 54,604 57,302 54,797
========= ========= ========= =========
Net income $124,362 $95,827 $44,039 $38,571
less: Preferred dividends 1,382 1,358 450 458
--------- --------- --------- ---------
Net income available to
common shareholders (B) $122,980 $94,469 $43,589 $38,113
========= ========= ========= =========
Net income per common share (B)/(A) $2.20 $1.73 $0.76 $0.70
========= ========= ========= =========
<FN>
Note: The dilutive effect of common stock equivalents in 1995 and 1994 was not
material for all periods shown.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE>9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE SEPTEMBER 30, 1995 10-Q FINANCIAL STATEMENTS AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 807173
<INT-BEARING-DEPOSITS> 15938
<FED-FUNDS-SOLD> 2000
<TRADING-ASSETS> 32040
<INVESTMENTS-HELD-FOR-SALE> 356309
<INVESTMENTS-CARRYING> 3639262
<INVESTMENTS-MARKET> 3604142
<LOANS> 10226745
<ALLOWANCE> 200337
<TOTAL-ASSETS> 15533070
<DEPOSITS> 12871632
<SHORT-TERM> 936043
<LIABILITIES-OTHER> 257060
<LONG-TERM> 204338
<COMMON> 69098
0
30008
<OTHER-SE> 1164891
<TOTAL-LIABILITIES-AND-EQUITY> 15533070
<INTEREST-LOAN> 623270
<INTEREST-INVEST> 190296
<INTEREST-OTHER> 4433
<INTEREST-TOTAL> 817999
<INTEREST-DEPOSIT> 257917
<INTEREST-EXPENSE> 333725
<INTEREST-INCOME-NET> 484274
<LOAN-LOSSES> 48750
<SECURITIES-GAINS> 5205
<EXPENSE-OTHER> 371218
<INCOME-PRETAX> 194480
<INCOME-PRE-EXTRAORDINARY> 124362
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 124362
<EPS-PRIMARY> 2.20
<EPS-DILUTED> 2.20
<YIELD-ACTUAL> 4.71
<LOANS-NON> 181703
<LOANS-PAST> 4410
<LOANS-TROUBLED> 222
<LOANS-PROBLEM> 44243
<ALLOWANCE-OPEN> 220292
<CHARGE-OFFS> 83124
<RECOVERIES> 14419
<ALLOWANCE-CLOSE> 200337
<ALLOWANCE-DOMESTIC> 138818
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 61519
</TABLE>
<TABLE>
UJB FINANCIAL CORP. Exhibit (99)A
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
<CAPTION>
September 30, December 31, September 30,
1995 1994 1994
-------------- -------------- --------------
<S> <C> <C> <C>
Assets
Cash and cash equivalents:
Cash and due from banks $ 807,173 $ 925,421 $ 1,035,023
Federal funds sold and securities purchased under agreements to resell 2,000 44,875 3,425
-------------- -------------- --------------
Total cash and cash equivalents 809,173 970,296 1,038,448
Interest bearing deposits with banks 15,938 18,809 18,844
Trading account securities 32,040 33,513 18,442
Investment securities available for sale 356,309 201,215 317,508
Investment securities:
U.S. Government and Federal agencies 1,795,406 2,016,615 1,995,798
States and political subdivisions 274,677 331,000 353,796
Other securities 1,569,179 1,745,373 1,790,212
-------------- -------------- --------------
Total investment securities 3,639,262 4,092,988 4,139,806
Loans (net of unearned discount):
Commercial 4,578,772 4,627,349 4,633,600
Mortgage 3,215,237 2,790,988 2,760,631
Instalment 2,432,736 2,238,237 2,205,327
-------------- -------------- --------------
Total loans 10,226,745 9,656,574 9,599,558
Less: Allowance for loan losses 200,337 214,161 237,745
-------------- -------------- --------------
Net loans 10,026,408 9,442,413 9,361,813
Premises and equipment 163,774 167,905 167,178
Assets held for accelerated disposition 22,906 90,888 -
Accrued interest receivable 95,448 89,926 85,943
Other real estate owned, net 27,082 31,449 66,679
Due from customers on acceptances 22,332 21,159 25,159
Other assets 322,398 268,911 278,040
-------------- -------------- --------------
Total Assets $ 15,533,070 $ 15,429,472 $ 15,517,860
============== ============== ==============
Liabilities and Shareholders' Equity
Deposits:
Non-interest bearing demand deposits $ 3,172,859 $ 3,260,641 $ 3,068,346
Interest bearing deposits:
Savings and time deposits 9,240,588 8,936,009 8,744,877
Commercial certificates of deposit $100,000 and over 458,185 371,141 354,112
-------------- -------------- --------------
Total deposits 12,871,632 12,567,791 12,167,335
Commercial paper 48,542 42,211 45,360
Other borrowed funds 887,501 1,291,219 1,792,679
Long-term debt 204,338 204,754 206,252
Accrued interest payable 47,157 30,234 29,615
Bank acceptances outstanding 22,332 21,159 25,159
Accrued expenses and other liabilities 187,571 167,844 166,469
-------------- -------------- --------------
Total liabilities 14,269,073 14,325,212 14,432,869
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
57,581,872 at September 30, 1995, 55,005,306 at
December 31, 1994 and 54,921,409 at September 30, 1994 69,098 66,006 65,905
Surplus 490,781 413,429 409,798
Retained earnings 677,631 604,066 584,506
Net unrealized gain (loss) on investment securities, net of tax (3,521) (9,249) (5,226)
-------------- -------------- --------------
Total shareholders' equity 1,263,997 1,104,260 1,084,991
-------------- -------------- --------------
Total Liabilities and Shareholders' Equity $ 15,533,070 $ 15,429,472 $ 15,517,860
============== ============== ==============
</TABLE>
<TABLE>
UJB FINANCIAL CORP. Exhibit (99)B
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share data)
<CAPTION> Nine Months Ended Three Months Ended
September 30, September 30,
----------------- -----------------
1995 1994* 1995 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Interest Income
Interest and fees on loans $623,270 $510,472 $211,846 $183,004
Interest on investment securities:
Taxable 161,718 140,867 52,212 55,413
Tax-exempt 15,277 17,175 4,614 5,911
Interest on investment securities available for sale 13,301 30,442 6,117 3,651
Interest on Federal funds sold and securities
purchased under agreements to resell 2,603 255 1,085 12
Interest on trading account securities 1,320 557 539 120
Interest on deposits with banks 510 434 135 174
-------- -------- -------- --------
Total interest income 817,999 700,202 276,548 248,285
Interest Expense
Interest on savings and time deposits 239,057 173,752 84,731 59,767
Interest on commercial certificates of deposit
$100,000 and over 18,860 8,256 5,667 3,648
Interest on borrowed funds 75,808 62,890 23,494 25,887
-------- -------- -------- --------
Total interest expense 333,725 244,898 113,892 89,302
-------- -------- -------- --------
Net interest income 484,274 455,304 162,656 158,983
Provision for loan losses 48,750 55,500 18,000 18,500
-------- -------- -------- --------
Net interest income after provision for loan losses 435,524 399,804 144,656 140,483
Non-Interest Income
Service charges on deposit accounts 49,665 48,474 17,442 16,093
Service and loan fee income 20,707 20,082 7,173 7,522
Trust income 16,421 16,410 5,698 5,324
Investment securities gains (losses) 5,205 1,846 980 58
Trading account gains 777 522 235 434
Other 37,399 33,109 13,547 11,328
-------- -------- -------- --------
Total non-interest income 130,174 120,443 45,075 40,759
Non-Interest Expenses
Salaries 146,639 135,521 49,795 46,312
Pension and other employee benefits 47,072 41,721 15,161 14,292
Occupancy, net 39,329 38,492 13,165 12,363
Furniture and equipment 37,965 36,170 12,832 12,130
FDIC assessment 13,710 20,815 32 6,989
Other real estate owned expenses 5,779 14,467 2,063 4,902
Advertising and public relations 8,585 8,039 2,721 2,523
Other 72,139 70,925 25,271 22,121
-------- -------- -------- --------
Total non-interest expenses 371,218 366,150 121,040 121,632
-------- -------- -------- --------
Income before income taxes 194,480 154,097 68,691 59,610
Federal and state income taxes 70,118 56,539 24,652 21,039
-------- -------- -------- --------
Income before cumulative effect of a change in accounting principle 124,362 97,558 44,039 38,571
Cumulative effect of a change in accounting principle - (1,731) - -
-------- -------- -------- --------
Net Income $124,362 $ 95,827 $ 44,039 $ 38,571
======== ======== ======== ========
Net Income Per Common Share:
Income before cumulative effect of a change in accounting principle $ 2.20 $ 1.76 $ 0.76 $ 0.70
Cumulative effect of a change in accounting principle - (0.03) - -
-------- -------- -------- --------
Net Income Per Common Share $ 2.20 $ 1.73 $ 0.76 $ 0.70
======== ======== ======== ========
Average Common Shares Outstanding (in thousands) 55,946 54,604 57,302 54,797
<FN> ======== ======== ======== ========
Certain prior period amounts have been reclassified for comparative purposes.
* Effective January 1994, the company adopted SFAS No. 112, Accounting for Postemployment Benefits.
</FN>
</TABLE>
<TABLE>
UJB FINANCIAL CORP. Exhibit (99)C
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
<CAPTION>
Nine Months Ended
September 30,
-----------------------
1995 1994
----------- -----------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 124,362 $ 95,827
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses and other real estate owned 52,597 64,426
Depreciation, amortization and accretion 23,859 23,667
Gains on sales of investment and trading account securities (5,982) (2,368)
Gains on sales of mortgages held for sale (308) (440)
Gains on sales of other real estate owned (2,861) (483)
Proceeds from sales of other real estate owned 16,676 27,355
Proceeds from sales of mortgages held for sale 29,529 134,651
Originations of mortgages held for sale (33,664) (108,177)
Net decrease in trading account securities 2,250 11,815
Increase in accrued interest receivable and other assets (708) (67,853)
Increase in accrued interest payable, accrued
expenses and other liabilities 37,823 30,694
----------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 243,573 209,114
----------- -----------
INVESTING ACTIVITIES
Proceeds from maturities of investment securities 538,773 837,588
Purchases of investment securities (89,997) (1,601,235)
Purchases of investment securities available for sale (215,509) (121,594)
Proceeds from maturities of investment securities available for sale 64,066 256,557
Proceeds from sales of investment securities available for sale 9,045 5,109
Net decrease in interest bearing deposits with banks 2,871 1,118
Net increase in loans (638,673) (969,219)
Purchases of premises and equipment, net (10,957) (10,588)
----------- -----------
NET CASH USED IN INVESTING ACTIVITIES (340,381) (1,602,264)
----------- -----------
FINANCING ACTIVITIES
Net (decrease) increase in demand and savings deposits (481,240) 270,843
Net increase in time deposits 785,081 144,993
Net (decrease) increase in short-term borrowings (396,758) 1,220,492
Principal payments on long-term debt (1,045) (5,582)
Proceeds from issuance of long-term debt - 1,040
Dividends paid (48,399) (35,068)
Issuance of common stock in connection with purchase acquisition
of Bancorp New Jersey, Inc. 68,186 -
Proceeds from issuance of common stock under dividend
reinvestment and other stock plans 12,258 11,524
Adjustment for pooling of a company with a different fiscal year end - 2,112
Other, net (2,398) (3,430)
----------- -----------
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES (64,315) 1,606,924
----------- -----------
INCREASE IN CASH AND CASH EQUIVALENTS (161,123) 213,774
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 970,296 824,674
----------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 809,173 $ 1,038,448
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid:
Interest payments $ 316,802 $ 238,623
Income tax payments 51,457 43,054
Noncash investing activities:
Loans made in conjunction with the sale of other real estate owned 2,148 7,939
Net transfer of loans to other real estate owned 21,164 32,905
Transfer of assets to assets held for accelerated disposition 2,765 -
Transfer of investments from investment securities available for sale - 707,808
</TABLE>
<TABLE>
UJB FINANCIAL CORP. Exhibit (99)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 - - - 95,827 - 95,827
Cash dividends declared:
Preferred stock - - - (1,358) - (1,358)
Common stock - - - (37,140) - (37,140)
Common stock issued:
Dividend reinvestment and other stock plans
(313,938 shares) - 376 7,668 - - 8,044
Exercise of stock options, net (346,703 shares) - 416 3,064 - - 3,480
Change in unrealized gain (loss) on investment
securities, net of tax - - - - (14,581) (14,581)
-------- -------- --------- --------- ----------- -----------
Balance, September 30, 1994 $30,008 $65,905 $409,798 $584,506 ($5,226) $1,084,991
======== ======== ========= ========= =========== ===========
Balance, December 31, 1994 $30,008 $66,006 $413,429 $604,066 ($9,249) $1,104,260
Net income - - - 124,362 - 124,362
Cash dividends declared:
Preferred stock - - - (1,382) - (1,382)
Common stock - - - (49,415) - (49,415)
Common stock issued:
In connection with purchase acquisition of
Bancorp New Jersey, Inc. (1,948,153 shares) - 2,338 65,848 - - 68,186
Dividend reinvestment and other stock plans
(313,646 shares) - 376 8,809 - - 9,185
Exercise of stock options, net (314,767 shares) - 378 2,695 - - 3,073
Change in unrealized gain (loss) on investment
securities, net of tax - - - - 5,728 5,728
-------- -------- --------- --------- ----------- -----------
Balance, September 30, 1995 $30,008 $69,098 $490,781 $677,631 ($3,521) $1,263,997
======== ======== ========= ========= =========== ===========
</TABLE>
<TABLE>
UJB FINANCIAL CORP. Exhibit (99)E
CONSOLIDATED AVERAGE BALANCE SHEETS WITH RESULTANT INTEREST AND RATES
(Tax-equivalent basis, dollars in thousands)
<CAPTION>
Nine Months Ended September 30,
-------------------------------------------------------------
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 $ 49,782 $ 2,603 6.99 % $ 11,308 $ 255 3.01 %
Interest bearing deposits with banks 11,656 510 5.85 16,700 434 3.47
Trading account securities 29,789 1,377 6.18 28,862 640 2.96
Investment securities available for sale 267,284 13,301 6.64 742,865 30,442 5.46
Investment securities:
U.S. Government and Federal agencies 1,887,003 85,269 6.03 1,814,563 78,520 5.77
States and political subdivisions 302,522 22,510 9.92 318,857 25,614 10.71
Other securities 1,673,932 76,696 6.11 1,546,233 62,628 5.40
------------ -------- ------- ------------ -------- -------
Total investment securities 3,863,457 184,475 6.37 3,679,653 166,762 6.04
------------ -------- ------- ------------ -------- -------
Loans:
Commercial 4,551,291 295,261 8.67 4,392,664 242,739 7.39
Mortgage 2,949,722 181,042 8.18 2,504,403 146,090 7.78
Instalment 2,299,285 149,627 8.70 2,089,200 124,344 7.96
------------ -------- ------- ------------ -------- -------
Total loans 9,800,298 625,930 8.54 8,986,267 513,173 7.64
------------ -------- ------- ------------ -------- -------
Total interest earning assets 14,022,266 828,196 7.90 13,465,655 711,706 7.07
------------ -------- ------- ------------ -------- -------
Non-interest earning assets:
Cash and due from banks 834,885 886,278
Allowance for loan losses (209,894) (248,906)
Other assets 632,654 587,185
------------ ------------
Total non-interest earning assets 1,257,645 1,224,557
------------ ------------
TOTAL ASSETS $ 15,279,911 $ 14,690,212
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest bearing liabilities:
Savings deposits $ 5,079,477 86,015 2.26 $ 5,588,683 85,891 2.05
Other time deposits 4,027,186 153,042 5.08 3,033,907 87,861 3.87
Commercial certificates of deposit
$100,000 and over 441,088 18,860 5.72 304,773 8,256 3.62
------------ -------- ------- ------------ -------- -------
Total interest bearing deposits 9,547,751 257,917 3.61 8,927,363 182,008 2.73
------------ -------- ------- ------------ -------- -------
Commercial paper 48,615 2,082 5.73 45,666 1,280 3.75
Other borrowed funds 1,076,756 60,532 7.52 1,377,173 47,916 4.65
Long-term debt 205,690 13,194 8.55 213,209 13,694 8.56
------------ -------- ------- ------------ -------- -------
Total interest bearing liabilities 10,878,812 333,725 4.10 10,563,411 244,898 3.10
------------ -------- ------- ------------ -------- -------
Non-interest bearing liabilities:
Demand deposits 2,973,720 2,861,635
Other liabilities 251,495 206,553
------------ ------------
Total non-interest bearing liabilities 3,225,215 3,068,188
Shareholders' equity 1,175,884 1,058,613
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 15,279,911 $ 14,690,212
============ ============
Net Interest Income (tax-equivalent basis) 494,471 3.80 % 466,808 3.97 %
======= =======
Tax-equivalent basis adjustment (10,197) (11,504)
--------- ---------
Net Interest Income $ 484,274 $ 455,304
========= =========
Net Interest Income as a Percent of Interest
Earning Assets (tax-equivalent basis) 4.71 % 4.63 %
======= =======
<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 (99)F
CONSOLIDATED RECONCILIATIONS OF ALLOWANCE FOR LOAN LOSSES
(dollars in thousands)
<CAPTION>
Nine Months Ended September 30,
-----------------------------
1995 1994
------------- -------------
<S> <C> <C>
Balance, January 1 $214,161 $244,154
Purchase acquisition and other, net 6,131 1,833
Provision charged to expense 48,750 55,500
------------- -------------
269,042 301,487
Net charge offs:
Loans charged off 83,124 74,458
Less recoveries 14,419 10,716
------------- -------------
Net loans charged off 68,705 63,742
------------- -------------
Balance, September 30 $200,337 $237,745
============= =============
</TABLE>
