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, 1996
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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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Summit Bancorp.
- ----------------------------------------------------------------------------
(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 October 31, 1996 there were 91,656,599 shares of common stock,
$1.20 par value, outstanding.
<PAGE>
SUMMIT BANCORP.
FORM 10-Q
INDEX
Part I. Financial Information. Page No.
Item 1. Financial Statements
Consolidated Balance Sheets -
September 30, 1996, December 31, 1995 and
September 30, 1995........................................2
Consolidated Statements of Income -
Three and Nine Months Ended September 30, 1996 and 1995...3
Consolidated Statements of Cash Flows -
Nine Months Ended September 30, 1996 and 1995.............4
Consolidated Statements of Shareholders' Equity -
Nine Months Ended September 30, 1996 and 1995.............5
Consolidated Average Balance Sheets With Resultant
Interest and Rates -
Nine Months Ended September 30, 1996 and 1995.............6
Notes to Consolidated Financial Statements.................7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations......................10
Part II. Other Information.
Item 1. Legal Proceedings.........................................19
Item 6. Exhibits and Reports on Form 8-K..........................21
Signatures............................................................22
Exhibit Index.........................................................23
1
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
<TABLE>
SUMMIT BANCORP.
CONSOLIDATED BALANCE SHEETS
Unaudited
(dollars in thousands)
<CAPTION>
September 30, December 31, September 30,
1996 1995 1995
------------- ------------ ------------
<S> <C> <C> <C>
Assets
Cash and cash equivalents:
Cash and due from banks $ 1,349,896 $ 1,337,718 $ 1,066,587
Federal funds sold and securities purchased under agreements to resell 372 161,650 70,870
------------- ------------ ------------
Total cash and cash equivalents 1,350,268 1,499,368 1,137,457
Interest bearing deposits with banks 9,136 18,329 15,951
Trading account securities 20,049 28,637 32,663
Securities available for sale 2,452,800 2,408,065 1,032,770
Securities held to maturity 3,245,175 3,047,080 4,649,117
Loans (net of unearned discount):
Commercial 5,463,705 5,321,047 5,298,446
Residential mortgage 3,657,219 3,296,818 3,230,956
Commercial mortgage 2,329,831 2,315,384 2,218,087
Consumer 3,366,700 3,086,325 2,983,031
------------- ------------ ------------
Total loans 14,817,455 14,019,574 13,730,520
Less: Allowance for loan losses 271,138 279,034 291,156
------------- ------------ ------------
Net loans 14,546,317 13,740,540 13,439,364
Premises and equipment 204,089 206,691 207,441
Accrued interest receivable 137,620 132,441 130,224
Other real estate owned, net 21,986 24,295 40,483
Due from customers on acceptances 15,756 26,740 22,332
Other assets 385,033 404,749 441,985
------------- ------------ ------------
Total Assets $ 22,388,229 $ 21,536,935 $ 21,149,787
============= ============ ============
Liabilities and Shareholders' Equity
Deposits:
Non-interest bearing demand deposits $ 4,091,826 $ 3,873,801 $ 3,605,643
Interest bearing deposits:
Savings and time deposits 13,289,236 13,373,864 13,210,623
Commercial certificates of deposit $100,000 and over 928,890 707,438 696,858
------------- ------------ ------------
Total deposits 18,309,952 17,955,103 17,513,124
Commercial paper 41,849 38,503 48,542
Other borrowed funds 1,468,503 1,004,053 1,044,078
Long-term debt 391,777 424,862 475,530
Accrued interest payable 58,457 45,567 54,435
Bank acceptances outstanding 15,756 26,740 22,332
Accrued expenses and other liabilities 264,083 239,791 245,749
------------- ------------ ------------
Total liabilities 20,550,377 19,734,619 19,403,790
Shareholders' equity:
Preferred stock without par value:
Series B: Authorized 1,200,000 shares; issued and outstanding 600,166
in 1996 and 1995, adjustable-rate cumulative, $50 stated value 30,008 30,008 30,008
Series C: Authorized 800,000 shares; issued and outstanding 504,481
in 1996 and 1995, adjustable-rate cumulative, $25 stated value 12,612 12,612 12,612
Common stock par value $1.20:
Authorized 130,000,000 shares; issued 93,841,298 at September 30,
1996; issued and outstanding 88,471,028 at December 31, 1995 and
87,993,436 at September 30, 1995 112,610 106,165 105,592
Surplus 879,430 826,788 816,826
Retained earnings 879,224 821,579 782,719
Net unrealized gain (loss) on securities, net of tax 9,831 5,164 (1,760)
------------- ------------ ------------
1,923,715 1,802,316 1,745,997
Treasury stock at cost, (2,213,300 shares in 1996) (85,863) - -
------------- ------------ ------------
Total shareholders' equity 1,837,852 1,802,316 1,745,997
------------- ------------ ------------
Total Liabilities and Shareholders' Equity $ 22,388,229 $ 21,536,935 $ 21,149,787
============= ============ ============
<FN>
See accompanying Notes to Consolidated Financial Statements.
</FN>
</TABLE>
2
<PAGE>
<TABLE>
SUMMIT BANCORP.
CONSOLIDATED STATEMENTS OF INCOME
Unaudited
(dollars in thousands, except per share data)
<CAPTION> Nine Months Ended Three Months Ended
September 30, September 30,
------------------------- -------------------------
1996 1995 1996 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Interest Income
Interest and fees on loans $ 891,777 $ 840,172 $ 300,462 $ 285,957
Interest on securities available for sale 112,643 47,753 36,108 16,739
Interest on securities held to maturity:
Taxable 139,036 202,179 45,590 67,168
Tax-exempt 13,025 16,617 3,666 4,954
Interest on Federal funds sold and securities
purchased under agreements to resell 2,089 5,973 476 2,005
Interest on trading account securities 1,172 1,357 253 553
Interest on deposits with banks 570 513 158 138
----------- ----------- ----------- -----------
Total interest income 1,160,312 1,114,564 386,713 377,514
Interest Expense
Interest on savings and time deposits 362,574 355,079 119,654 126,549
Interest on commercial certificates of deposit
$100,000 and over 32,780 26,776 11,879 8,312
Interest on borrowed funds 81,935 86,029 26,258 26,273
----------- ----------- ----------- -----------
Total interest expense 477,289 467,884 157,791 161,134
----------- ----------- ----------- -----------
Net interest income 683,023 646,680 228,922 216,380
Provision for loan losses 46,500 52,350 15,500 19,200
----------- ----------- ----------- -----------
Net interest income after provision for loan losses 636,523 594,330 213,422 197,180
Non-Interest Income
Service charges on deposit accounts 72,711 64,777 24,874 22,432
Service and loan fee income 30,586 25,680 9,891 9,732
Trust income 28,787 25,161 9,975 8,698
Securities gains 2,514 6,815 251 1,769
Trading account gains 267 952 161 285
Other 47,280 42,654 15,892 15,215
----------- ----------- ----------- -----------
Total non-interest income 182,145 166,039 61,044 58,131
Non-Interest Expenses
Salaries 183,614 188,242 58,592 63,923
Pension and other employee benefits 63,661 66,094 19,617 21,270
Occupancy, net 55,149 52,324 16,675 17,374
Furniture and equipment 47,614 44,997 15,942 15,135
Advertising and public relations 11,525 12,784 3,593 4,083
Deposit insurance assessment 14,839 18,886 12,374 260
Other real estate owned expenses 4,861 7,777 620 4,075
Restructuring charges 110,700 - - -
Other 100,725 91,909 32,916 32,202
----------- ----------- ----------- -----------
Total non-interest expenses 592,688 483,013 160,329 158,322
----------- ----------- ----------- -----------
Income before income taxes 225,980 277,356 114,137 96,989
Federal and state income taxes (78,877) (99,642) (40,159) (34,812)
----------- ----------- ----------- -----------
Net Income $ 147,103 $ 177,714 $ 73,978 $ 62,177
=========== =========== =========== ===========
Net Income Per Common Share $ 1.56 $ 2.04 $ 0.79 $ 0.70
=========== =========== =========== ===========
Average Common Shares Outstanding (in thousands) 93,304 86,141 93,205 87,627
=========== =========== =========== ===========
<FN>
See accompanying Notes to Consolidated Financial Statements.
</FN>
</TABLE>
3
<PAGE>
<TABLE>
SUMMIT BANCORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
(dollars in thousands)
<CAPTION>
Nine Months Ended
September 30,
---------------------------
1996 1995
------------- -------------
<S> <C> <C>
Operating activities
Net income $ 147,103 $ 177,714
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses and other real estate owned 48,704 56,197
Depreciation, amortization and accretion, net 21,907 31,779
Restructuring charges and other non-recurring charges 121,759 -
Gains on sales of trading account securities and securities available for sale (2,781) (7,767)
Gains on sales of mortgages held for sale (1,935) (3,247)
Gains on sales of other real estate owned (1,130) (2,885)
Proceeds from sales of other real estate owned 17,557 16,700
Proceeds from sales of mortgages held for sale 158,243 93,049
Originations of mortgages held for sale (293,060) (111,929)
Net decrease in trading account securities 8,855 3,159
Decrease in accrued interest receivable and other assets 27,912 1,960
(Decrease) increase in accrued interest payable, accrued
expenses and other liabilities (95,561) 47,021
------------- -------------
Net cash provided by operating activities 157,573 301,751
------------- -------------
Investing activities
Proceeds from maturities of securities held to maturity 511,515 676,697
Purchases of securities held to maturity (714,013) (530,311)
Purchases of securities available for sale (498,577) (346,322)
Proceeds from maturities of securities available for sale 363,215 149,001
Proceeds from sales of securities available for sale 97,742 329,790
Net decrease in interest bearing deposits with banks 9,193 2,871
Net increase in loans (729,462) (677,680)
Purchases of premises and equipment, net (19,045) (15,613)
------------- -------------
Net cash used in investing activities (979,432) (411,567)
------------- -------------
Financing activities
Net increase (decrease) in demand and savings deposits 111,265 (505,721)
Net increase in time deposits 243,584 1,041,208
Net increase (decrease) in short-term borrowings 467,796 (470,419)
Principal payments on long-term debt (33,085) (144,501)
Proceeds from issuance of long-term debt - 74,925
Dividends paid (99,295) (70,282)
Proceeds from issuance of common stock for acquisitions 48,323 68,186
Proceeds from issuance of common stock under dividend
reinvestment and other stock plans 24,251 23,735
Common stock purchased for the Central Jersey acquisition (85,863) -
Repurchase of preferred stock - (5,984)
Other, net (4,217) (4,030)
------------- -------------
Net cash provided by financing activities 672,759 7,117
------------- -------------
Decrease in cash and cash equivalents (149,100) (102,699)
Cash and cash equivalents at beginning of period 1,499,368 1,240,156
------------- -------------
Cash and cash equivalents at end of period $ 1,350,268 $ 1,137,457
============= =============
Supplemental disclosure of cash flow information
Cash paid:
Interest payments $ 464,399 $ 448,390
Income tax payments 106,761 69,336
Noncash investing activities:
Loans made in conjunction with the sale of other real estate owned 328 2,148
Net transfer of loans to other real estate owned 18,616 27,807
<FN>
See accompanying Notes to Consolidated Financial Statements.
</FN>
</TABLE>
4
<PAGE>
<TABLE>
SUMMIT BANCORP.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Unaudited
(dollars in thousands)
<CAPTION>
Net Total
Preferred Common Retained Unrealized Treasury Shareholders'
Stock Stock Surplus Earnings Gain (Loss) Stock Equity
-------- --------- --------- --------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1994 $ 50,008 $ 102,005 $ 730,131 $ 676,281 $ (24,708) $ - $ 1,533,717
Net income - - - 177,714 - - 177,714
Cash dividends declared:
Preferred stock - - - (2,060) - - (2,060)
Common stock - - - (70,620) - - (70,620)
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 (652,505 shares) - 783 15,626 - - - 16,409
Exercise of stock options,
net (388,826 shares) - 466 5,221 - - - 5,687
Redemption of Series C
preferred stock (7,388) - - 1,404 - - (5,984)
Change in unrealized gain (loss) on
securities, net of tax - - - - 22,948 - 22,948
-------- --------- --------- --------- ----------- ----------- -----------
Balance, September 30, 1995 $ 42,620 $ 105,592 $ 816,826 $ 782,719 $ (1,760) $ - $ 1,745,997
======== ========= ========= ========= =========== =========== ===========
Balance, December 31, 1995 $ 42,620 $ 106,165 $ 826,788 $ 821,579 $ 5,164 $ - $ 1,802,316
Balances at beginning of period of
immaterial pooled acquisitions
(4,353,085 shares) - 5,224 29,612 14,054 (567) - 48,323
Net income - - - 147,103 - - 147,103
Cash dividends declared:
Preferred stock - - - (1,917) - - (1,917)
Common stock - - - (101,595) - - (101,595)
Common stock issued:
Dividend reinvestment and other
stock plans (282,390 shares) - 339 10,083 - - - 10,422
Exercise of stock options,
net (734,795 shares) - 882 12,947 - - - 13,829
Common stock purchased for the
Central Jersey acquisition,
(2,213,300 shares) - - - - - (85,863) (85,863)
Change in unrealized gain (loss) on
securities, net of tax - - - - 5,234 - 5,234
-------- --------- --------- --------- ----------- ----------- -----------
Balance, September 30, 1996 $ 42,620 $ 112,610 $ 879,430 $ 879,224 $ 9,831 $ (85,863) $ 1,837,852
======== ========= ========= ========= =========== =========== ===========
<FN>
See accompanying Notes to Consolidated Financial Statements.
</FN>
</TABLE>
5
<PAGE>
<TABLE>
SUMMIT BANCORP.
CONSOLIDATED AVERAGE BALANCE SHEETS WITH RESULTANT INTEREST AND RATES
Unaudited
(Tax-equivalent basis, dollars in thousands)
<CAPTION>
Nine Months Ended September 30,
-----------------------------------------------------------------
1996 1995
------------------------------ ------------------------------
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 $ 46,974 $ 2,089 5.94 % $ 126,012 $ 5,973 6.34 %
Interest bearing deposits with banks 14,595 570 5.22 11,669 513 5.88
Trading account securities 28,587 1,182 5.52 30,676 1,414 6.16
Securities available for sale 2,422,435 112,643 6.20 974,192 48,868 6.69
Securities held to maturity 3,339,560 157,901 6.30 4,754,569 227,089 6.37
Loans:
Commercial 5,351,129 334,916 8.36 5,274,757 347,095 8.80
Residential mortgage 3,578,174 198,905 7.41 2,937,983 162,193 7.36
Commercial mortgage 2,412,491 156,351 8.64 2,235,090 150,038 8.95
Consumer 3,253,407 205,803 8.45 2,820,915 184,732 8.76
----------- ---------- ------- ----------- ---------- -------
Total loans 14,595,201 895,975 8.20 13,268,745 844,058 8.50
----------- ---------- ------- ----------- ---------- -------
Total interest earning assets 20,447,352 1,170,360 7.65 19,165,863 1,127,915 7.87
----------- ---------- ------- ----------- ---------- -------
Non-interest earning assets:
Cash and due from banks 1,198,728 1,066,941
Allowance for loan losses (287,628) (301,869)
Other assets 803,176 826,177
----------- -----------
Total non-interest earning assets 1,714,276 1,591,249
----------- -----------
Total Assets $22,161,628 $20,757,112
=========== ===========
Liabilities and Shareholders' Equity
Interest bearing liabilities:
Savings deposits $ 7,986,628 149,676 2.50 $ 7,766,099 154,501 2.66
Time deposits 5,574,744 212,898 5.10 5,233,248 200,578 5.12
Commercial certificates of deposit
$100,000 and over 816,242 32,780 5.36 622,543 26,776 5.75
----------- ---------- ------- ----------- ---------- -------
Total interest bearing deposits 14,377,614 395,354 3.67 13,621,890 381,855 3.75
----------- ---------- ------- ----------- ---------- -------
Commercial paper 43,898 1,725 5.25 48,615 2,082 5.73
Other borrowed funds 1,424,874 57,254 5.37 1,265,085 55,068 5.82
Long-term debt 399,373 22,956 7.66 515,419 28,879 7.47
----------- ---------- ------- ----------- ---------- -------
Total interest bearing liabilities 16,245,759 477,289 3.92 15,451,009 467,884 4.05
----------- ---------- ------- ----------- ---------- -------
Non-interest bearing liabilities:
Demand deposits 3,699,303 3,350,191
Other liabilities 358,159 327,347
----------- -----------
Total non-interest bearing liabilities 4,057,462 3,677,538
----------- -----------
Shareholders' equity 1,867,375 1,628,565
Less: Treasury stock (8,968) -
----------- -----------
Total Shareholders' equity 1,858,407 1,628,565
----------- -----------
Total Liabilities and Shareholders' Equity $22,161,628 $20,757,112
=========== ===========
Net Interest Income (tax-equivalent basis) 693,071 3.73 % 660,031 3.82 %
Tax-equivalent basis adjustment (based on a ======= =======
Federal income tax rate of 35%) (10,048) (13,351)
---------- ----------
Net Interest Income $ 683,023 $ 646,680
========== ==========
Net Interest Income as a Percent of Interest
Earning Assets (tax-equivalent basis) 4.53 % 4.60 %
======= =======
<FN>
See accompanying Notes to Consolidated Financial Statements.
</FN>
</TABLE>
6
<PAGE>
SUMMIT BANCORP.
Notes to Consolidated Financial Statements
(Unaudited)
1.) Basis of Presentation
The accompanying financial statements reflect, in the opinion of
management, all normal, recurring adjustments necessary to
present fairly the financial position of Summit Bancorp. (the
"Company"), the results of its operations, changes in
shareholders' equity and changes in its cash flows. The
financial statements presented, in all material respects, comply
with the current reporting requirements of supervisory
authorities. Certain prior period amounts have been reclassified
for comparative purposes. For additional information and
disclosures required under generally accepted accounting
principles, reference is made to the registrant's 1995 Annual
Report on Form 10-K.
2.) Acquisitions
On January 16, 1996, The Summit Bancorporation acquired Garden
State Bancshares, Inc. ("Garden State") and on February 23,
1996, UJB Financial Corp. acquired The Flemington National Bank
and Trust Company ("Flemington"). Both of these acquisitions
were accounted for as poolings of interest and were recorded as
adjustments to beginning shareholders' equity as of January 1,
1996, without restating consolidated financial statements for
1995 and prior years. On March 1, 1996, UJB Financial Corp.
completed its acquisition of The Summit Bancorporation, and the
Company changed its name to Summit Bancorp. This acquisition was
accounted for as a pooling of interests and all financial
information has been restated to reflect the combined results of
operations.
On July 11, 1995, UJB Financial Corp. completed the acquisition
of Bancorp New Jersey, Inc. This acquisition was accounted for
as a purchase, and its assets and results of operations are
included from that date. Bancorp New Jersey had total assets of
$504.5 million, loans of $290.4 million and deposits of $450.0
million.
On May 22, 1996, the Company announced a definitive merger
agreement to acquire Central Jersey Financial Corporation.
Central Jersey, which operates Central Jersey Savings Bank, has
total assets of $468.0 million and operates six community
branches in Middlesex County. This transaction, which will be
accounted for as a purchase, is expected to close in the fourth
quarter of 1996. During the third quarter of 1996, the Company
repurchased approximately 2.2 million of its common shares which
(along with any necessary additional shares) will be used to
consummate this acquisition.
On August 28, 1996, the Company announced a definitive agreement
to acquire B.M.J. Financial Corp., in a tax-free exchange of
stock. B.M.J. Financial Corp.,
7
<PAGE>
which operates The Bank of Mid-Jersey, has assets of $655.2 million,
with 22 branches located throughout Burlington, Mercer and Ocean counties.
The transaction is expected to close in the first quarter of 1997,
subject to regulatory and B.M.J. Financial Corp. shareholder
approvals.
3.) Earnings Per Common Share
Earnings per common share is calculated by dividing net income,
less the dividends on the adjustable-rate cumulative preferred
stock, by the average daily number of common shares outstanding
during the period. Common stock equivalents are not included in
the calculation as they have no material dilutive effect.
4.) Recent Accounting Pronouncements
In March 1995 the Financial Accounting Standards Board (the
"FASB") issued Statement of Financial Accounting Standards
("SFAS") No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of." This
Statement requires that long-lived assets and certain
identifiable intangibles and goodwill related to these assets be
reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may
not be recoverable. SFAS No. 121 is effective for financial
statements for fiscal years beginning after December 15, 1995.
The impact of adopting SFAS No. 121 was immaterial.
In May 1995 the FASB issued Statement of Financial Accounting
Standards SFAS No.122, "Accounting for Mortgage Servicing
Rights." This Statement requires capitalization of the value of
rights to service mortgage loans for others, whether those
rights were acquired through purchase or origination. SFAS No.
122 also requires that capitalized mortgage servicing rights be
evaluated for impairment based on their fair value with any
adjustments recognized through a valuation allowance. SFAS No.
122 was adopted effective January 1, 1996. All capitalized
mortgage servicing rights, both originated and purchased, are
evaluated for impairment on a quarterly basis. The impact of
adopting SFAS No. 122 was immaterial.
In October 1995 the FASB issued SFAS No. 123, "Accounting for
Stock-Based Compensation." This Statement encourages recording
in current period earnings compensation expense related to the
fair value of certain stock-based compensation. Companies may
choose to continue to follow the provisions of Accounting
Principles Board ("APB") opinion No. 25, "Accounting for Stock
Issued to Employees", where compensation expense is not recorded
for certain stock-based compensation plans. However, companies
will be required to disclose pro forma net income and earnings
per share as if they adopted the fair value based method of
accounting . The disclosure requirements for SFAS No. 123 are
effective for fiscal years beginning after December 15, 1995.
The Company has elected to continue to
8
<PAGE>
account for stock-based compensation under APB Opinion No. 25 and
will include the pro forma disclosures required by SFAS No. 123 in
the footnotes to the 1996 annual financial statements.
In June 1996, the FASB issued SFAS No. 125, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities." SFAS No. 125 provides accounting and reporting
standards for transfers and servicing of financial assets and
extinguishments of liabilities. These standards are based on
consistent application of a financial-components approach that
focuses on control. Under this approach, after a transfer of
financial assets, an entity recognizes the financial and
servicing assets it controls and the liabilities it has
incurred, derecognizes financial assets when control has been
surrendered, and derecognizes liabilities when extinguished.
SFAS No. 125 provides consistent standards for distinguishing
transfers of financial assets that are sales from transfers that
are secured borrowings. SFAS No. 125 is effective for transfers
that occur after December 31, 1996, and will be applied
prospectively. On November 11, 1996, the FASB issued an
exposure draft of an amendment of SFAS No. 125. This amendment
would defer for one year the effective date of certain
provisions of SFAS No. 125. The Company does not expect the
adoption of SFAS No. 125 to have a material effect on its future
financial position or results of operations.
9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
- -----------------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
-----------------------------------------------
FINANCIAL CONDITION
September 30, 1996 versus December 31, 1995
Total assets at September 30, 1996 were $22.4 billion, an
increase of $851.3 million or 4.0 percent from year-end 1995.
The increase in total assets was primarily related to the first
quarter acquisitions of Garden State and Flemington. These
acquisitions represented approximately $597.7 million of this
increase.
Securities held to maturity at September 30, 1996 were $3.2
billion and were comprised of $1.6 billion of U.S. Government
and Federal agency securities, $245.9 million of states and
political subdivision securities and $1.4 billion of other
securities. These securities increased $198.1 million or 6.5
percent from year-end 1995. The increase from year-end 1995 was
the result of $105.9 million from the two acquisitions and
$608.1 million in purchases, partially offset by $511.5 million
in maturities. At September 30, 1996, the aggregate market
value of the held-to-maturity portfolio was $3.2 billion. The
aggregate market value at December 31, 1995 was $3.0 billion.
At September 30, 1996, securities available for sale amounted to
$2.5 billion and were comprised of $1.9 billion of U.S.
Government and Federal agency securities and $502.6 million of
other securities, predominately corporate collateralized
mortgage obligations. These securities increased $44.7 million
or 1.9 percent from year-end 1995. For the first nine months of
1996, $498.6 million of securities were purchased. These
purchases were offset by maturities of $363.2 million and sales
of $97.7 million.
At September 30, 1996, total loans amounted to $14.8 billion and
increased $797.9 million or 5.7 percent from year-end 1995. The
acquisitions of Garden State and Flemington accounted for
approximately $400 million of this increase. Commercial loans
at September 30, 1996, increased $142.7 million or 2.7 percent
from year-end 1995. Residential mortgage loans increased $360.4
million or 10.9 percent, and commercial mortgage loans increased
$14.4 million or 0.6 percent from December 31, 1995. The Garden
State and Flemington acquisitions contributed $188.6 million to
residential mortgage loans and $132.6 million to the commercial
mortgage loan increase. Consumer loans increased $280.4 million
or 9.1 percent from year-end 1995 to $3.4 billion.
Total deposits were $18.3 billion at September 30, 1996, an
increase of $354.8 million or 2.0 percent from December 31,
1995. This increase was primarily due to the Garden State and
Flemington acquisitions. Demand deposits increased $218.0
10
<PAGE>
million or 5.6 percent from year-end 1995 to $4.1 billion.
Savings and time deposits decreased $84.6 million or 0.6 percent
from December 31, 1995 to $13.3 billion. Commercial
certificates of deposit $100,000 and over were $928.9 million,
an increase of $221.5 million or 31.3 percent compared to
December 31, 1995.
Borrowed funds, including commercial paper and long-term debt,
at September 30, 1996 increased $434.7 million or 29.6 percent
from December 31, 1995 to $1.9 billion. The increase in
borrowed funds from year-end 1995 was primarily used to leverage
investment activity on a short-term basis.
Total shareholders' equity increased $35.5 million or 2.0
percent from December 31, 1995 to $1.8 billion. Contributing to
this increase, in addition to earnings and other equity
activity, were the effects of the Garden State and Flemington
acquisitions as of January 1, 1996 which added $48.3 million to
shareholders' equity. As of September 30, 1996, the unrealized
gain on securities, net of tax, recorded in equity amounted to
$9.8 million, compared to an unrealized gain of $5.2 million at
year-end 1995. On May 22, 1996, the Company announced a
definitive merger agreement to acquire Central Jersey Financial
Corporation. During the third quarter the Company repurchased
approximately 2.2 million shares of Summit common stock in the
open market at a cost of $85.9 million. These shares (along
with any necessary additional shares) will be used to consummate
the Central Jersey Financial Corporation acquisition.
Capital ratios for September 30, 1996, as compared to select
prior periods are shown in the following table.
Sept. 30, Dec. 31, Sept.30,
Select Capital Ratios: 1996 1996 1995
----------------------- --------- -------- --------
Leverage ratio 7.81% 7.97% 7.82%
Tier I capital 10.61 10.75 10.60
Total capital 13.30 13.46 13.33
Non-performing Loans and Other Real Estate Owned
At September 30, 1996, total non-performing loans and other real
estate owned (OREO) were $182.9 million, a decline of $29.9
million, or 14.1 percent, from December 31, 1995. Compared to
September 30, 1995, non-performing loans and OREO decreased
$64.6 million, or 26.1 percent. Non-performing loans at
September 30, 1996, were $160.9 million and represented 1.09
percent of total loans, compared to $188.5 million, or 1.34
percent, at December 31, 1995, and $206.9 million, or 1.51
percent a year ago. These loans declined $46.1 million from
September 30, 1995 which was due in part to two bulk sales
totaling $27.6 million of small-balance non-performing loans
during the second and third quarters of 1996. OREO, net of a
$9.9 million reserve, amounted to $22.0 million at
11
<PAGE>
September 30, 1996, a decline of 9.5 percent from $24.3 million at year-end
1995, and 45.7 percent from $40.5 million at September 30, 1995.
Allowance for Loan Losses
The allowance for loan losses at September 30, 1996 was $271.1
million, or 1.83 percent of loans, compared to $279.0 million or
1.99 percent of loans at December 31, 1995 and $291.2 million or
2.12 percent of loans at September 30, 1995. For the nine
months ended September 30, 1996, net charge offs were $60.7
million, or .56 percent of average loans compared to $72.7
million, or .73 percent of average loans in the first nine
months of 1995. For the three months ended September 30, 1996,
net charge offs were $20.4 million, or .55 percent of average
loans compared to $24.5 million, or .72 percent of average loans
in the third quarter of 1995.
Transactions in the allowance for loan losses are shown in the
following table (dollars in thousands):
Nine Months Ended September 30,
-------------------------------
1996 1995
--------- ---------
Balance, January 1 $ 279,034 $ 305,330
Acquisition adjustments, net 6,342 6,131
Provision charged to expense 46,500 52,350
--------- ---------
331,876 363,811
--------- ---------
Net charge offs:
Loans charged off 78,200 89,311
Less recoveries 17,462 16,656
--------- ---------
Net loans charged off 60,738 72,655
--------- ---------
Balance, September 30 $ 271,138 $ 291,156
========= =========
12
<PAGE>
RESULTS OF OPERATIONS
For the third quarter of 1996, the Company reported net income
of $74.0 million or $.79 per share compared to net income of
$62.2 million or $.70 per share earned during the third quarter
of 1995. The results for the three months ended September 30,
1996, include a non-recurring charge relating to a one-time
special assessment in conjunction with legislation passed to
recapitalize the Savings Association Insurance Fund (SAIF). The
assessment amounted to $11.1 million (pre-tax). Excluding the
effect of the one-time SAIF assessment, net income would have
been $80.7 million or $.86 per share.
Net income for the nine months ended September 30, 1996 was
$147.1 million compared to $177.7 million for the first nine
months of 1995. On a per common share basis, net income for the
nine months ended September 30, 1996 was $1.56 compared to $2.04
for the same period in 1995. The results for the nine months
ended September 30, 1996, also include non-recurring
restructuring charges of $110.7 million (pre-tax) which were
recorded in the first quarter. These charges included
merger-related expenses for The Summit Bancorporation,
Flemington, and Garden State. Also included in these charges
were branch-related expenses recorded in conjunction with an
announced agreement to open 70 in-store supermarket branches.
Excluding the effect of the SAIF assessment and restructuring
charges, net income would have been $223.8 million or $2.38 per
share.
Interest income on a tax-equivalent basis was $1.2 billion for
the nine months ended September 30, 1996, an increase of $42.4
million, or 3.8 percent, compared to the prior year period. For
the nine months ended September 30, 1996, interest earning
assets averaged $20.4 billion, an increase of $1.3 billion, or
6.7 percent. This increase in interest earning assets
contributed $88.3 million to interest income. Offsetting this
volume increase was a $45.9 million decrease due to the decline
in interest rates. The average prime rate for the third quarter
of 1996 declined approximately 52 basis points from the prior
year period.
Interest expense increased $9.4 million, or 2.0 percent, for the
nine months ended September 30, 1996 compared to the same period
in 1995. For the nine months ended September 30, 1996 interest
bearing liabilities averaged $16.2 billion, an increase of
$794.8 million, or 5.1 percent, from the prior year period. This
increase in interest bearing liabilities contributed $30.1
million to interest expense offset by a decrease of $20.7
million due to the decline in interest rates.
Net interest income on a tax-equivalent basis was $693.1 million
for the nine months ended September 30, 1996, an increase of
$33.0 million, or 5.0 percent, compared to the same period in
1995. 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 3.73
13
<PAGE>
percent for the nine months ended September 30, 1996 compared to
3.82 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 4.53 percent during the first nine months of 1996
compared to 4.60 percent during the same period in 1995. The
decline in net interest margin was primarily due to a decline of
22 basis points on interest earning assets resulting from a
lower interest rate and competitive loan pricing.
Asset and liability management efforts involve the use of
certain derivative financial instruments. At September 30,
1996, the derivative financial instruments portfolio primarily
consisted of interest rate swaps, with a notional value of
$282.6 million. Interest rate swaps are contractual agreements
between two parties to exchange interest payments at particular
intervals. Interest rate 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 $1.6 million
through the third quarter of 1996, compared to a $5.3 million
reduction during the first three quarters of 1995. The cost to
terminate these contracts at September 30, 1996 would have been
$2.2 million compared to $1.1 million at December 31, 1995, and
$10.5 million at September 30, 1995.
The provision for loan losses for the third quarter was $15.5
million, compared with $19.2 million for the same period a year
ago. On a year-to-date basis, the provision was $46.5 million,
a decline of $5.9 million or 11.2 percent, compared with the
prior year period.
Non-interest income
Non-interest income for the third quarter of 1996 totaled $61.0
million, an increase of $2.9 million, or 5.0 percent, compared
with the third quarter of 1995. Excluding securities gains,
total non-interest income was $60.8 million for the third
quarter of 1996, an increase of $4.4 million, or 7.9 percent,
from the prior year period. For the nine months ended September
30, 1996, non-interest income totaled $182.1 million, an
increase of $16.1 million, or 9.7 percent from the prior year
period. Excluding securities gains, total non-interest income
was $179.6 million for the nine months ended September 30, 1996,
an increase of $20.4 million, or 12.8 percent, from the prior
year period.
For the third quarter of 1996, service charges on deposits were
$24.9 million, an increase of $2.4 million or 10.9 percent
compared with the third quarter of 1995. On a year-to-date
basis, 1996 service charges on deposits accounts have increased
$7.9 million, or 12.2 percent as compared to the same period in
1995. These increases are primarily attributable to higher fees
from business and personal demand deposit accounts.
14
<PAGE>
Service and loan fee income for the third quarter of 1996
increased $.2 million, or 1.6 percent, as compared to the
quarter ended September 30, 1995. For the first nine months of
1996, service and loan fee income increased $4.9 million, or
19.1 percent as compared to the same period in 1995. These
increases are primarily due to increases in merchant card
processing and consumer debit card fees, partially offset by a
decline in mortgage origination fees.
Trust fee income for the third quarter of 1996 was $10.0
million, an increase of $1.3 million or 14.7 percent compared
with the third quarter of 1995. During the first nine months of
1996, trust fee income increased $3.6 million or 14.4 percent
compared to the prior year period. These increases are primarily
due to higher fees from mutual funds and investment advisory
accounts.
For the third quarter of 1996, net gains of $.3 million on the
sales and early redemptions of securities were realized
compared with net gains of $1.8 million in the third quarter of
1995. On a year-to-date basis, securities gains were $2.5
million, compared to $6.8 million during the first nine months
of 1995. For the three months ended September 30, 1996, other
income increased $.7 million, or 4.4 percent as compared to the
third quarter of 1995. Other income for the first nine months
of 1996 increased $4.6 million, or 10.8 percent as compared to
the same period in 1995. These increases are primarily
attributable to increases in ATM fees.
Non-interest expense
Non-interest expenses for the third quarter of 1996 totaled
$160.3 million compared to $158.3 for the third quarter of 1995.
For the first nine months of 1996, non-interest expenses
amounted to $592.7 million, which compared to $483.0 million for
the same period in 1995. Non-interest expenses for the first
nine months of 1996 included non-recurring charges, which were
comprised of a special one-time assessment for SAIF deposits of
$11.1 million, which was incurred in the third quarter of 1996,
and restructuring charges of $110.7 million, which were incurred
in the first quarter of 1996. Excluding these non-recurring
charges, non-interest expenses decreased $9.1 million or 5.7
percent for the third quarter of 1996 and $12.1 million or 2.5
percent for the first nine months of 1996 compared to the
respective prior year periods.
Salaries expense for the third quarter of 1996 was $58.6
million, which decreased $5.3 million, or 8.3 percent from the
prior year period. For the first nine months of 1996, salaries
expense decreased $4.6 million or 2.5 percent compared to the
same period in 1995. This expense decreased as the Company has
begun to realize anticipated cost savings from the mergers. For
the third quarter of 1996, pension and other employee benefits
decreased $1.7 million, or 7.8 percent, as compared to the third
quarter of 1995. Pension and other employee benefits for the
first nine months of 1996 were $63.7 million, down $2.4 million,
or 3.7 percent, compared
15
<PAGE>
with the first nine months of 1995. The declines in pension and other
employee benefits for the three months and nine months ended September 30,
1996 were primarily attributable to lower medical insurance, and other
post-retirement costs.
Occupancy expenses for the third quarter of 1996 decreased $.7
million, or 4.0 percent, compared to the prior year period. On
a year-to-date basis, occupancy expenses for 1996 increased $2.8
million, or 5.4 percent, as compared to the same period in 1995.
The year-to-date expense increase was due in part to the higher
rental and maintenance expenses associated with the additional
branch locations operated during the first nine months of 1996
and severe weather conditions experienced during the first
quarter of 1996. Furniture and equipment expenses rose $.8
million, or 5.3 percent, in the third quarter of 1996 when
compared with the third quarter of 1995. For the first nine
months of 1996, furniture and equipment expenses increased $2.6
million, or 5.8 percent as compared to the same period in 1995.
These increases are due in part to the increases in depreciation
and lease expense on equipment acquired through the Flemington
and Garden State acquisitions and expenses associated with
office automation and technological upgrades.
For the third quarter of 1996, the deposit insurance assessment
expense increased $12.1 million, as compared to the third
quarter of 1995. The increase for the third quarter of 1996 is
related to the special one-time SAIF assessment of $11.1 million
(pre-tax). For the first nine months of 1996 the deposit
insurance assessment expense was $14.8 million, a decline of
$4.0 million, or 21.4 percent from the same period of 1995. The
decrease on a year-to-date basis is attributable to two
reductions of the deposit insurance assessment rate on deposits
insured under the Bank Insurance Fund (BIF), offset by the
special one-time SAIF assessment in the third quarter of 1996.
The rate on BIF insured deposits declined from 23 cents per $100
of deposits to 4 cents per $100 of deposits, effective June 1,
1995, and then the rate was subsequently reduced to a fee of
$2,000 per year during 1996. The new rates, for well
capitalized financial institutions, effective 1997 through 1999,
are 1.29 cents per $100 of BIF insured deposits, and 6.44 cents
per $100 of SAIF insured deposits.
Other real estate owned expenses were $.6 million for the third
quarter of 1996, a decrease of $3.5 million from the third
quarter of 1995. For the nine months ended September 30, 1996,
other real estate owned expenses were $4.9 million, which
represents a decrease of $2.9 million, or 37.5 percent from the
prior year period.
For the third quarter of 1996, other operating expense increased
$.7 million, or 2.2 percent as compared to the third quarter of
1995. On a year-to-date basis, other operating expense was
$100.7 million, which increased $8.8 million, or 9.6 percent as
compared to the same period in 1995. These increases are
partially attributable to increases in communication,
acquisition premium amortization for Bancorp. NJ,
16
<PAGE>
and printing stationery and supplies expenses in conjunction with the Summit
merger.
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 nine months of 1996, net
cash provided by operating activities totaled $157.6 million.
Contributing to net cash provided by operating activities were
the results of operations adjusted for the restructuring
charges, the provisions for loan losses and other real estate
owned, and proceeds from the sales of mortgages held for sale.
Net cash used in investing activities totaled $979.4 million and
was the result of investment and loan activity. Net cash
provided by financing activities totaled $672.8 million,
reflecting the increases in time deposits and short-term
borrowings from year-end 1995.
During the first nine months of 1996, proceeds of $874.7 million
from maturities in the securities portfolios, including
securities available for sale, an increase of $136.8 million in
interest bearing deposits, and an increase of $434.7 million in
borrowed funds contributed to liquidity. Complimenting these
sources, demand deposits increased $218.0 million from year-end
1995. Other uses of funds included an increase in total loans
of $797.9 million, and purchases totaling $1.2 billion of
securities, including held to maturity and available for sale.
On November 7, 1996, the Company announced that it will call for
redemption on December 15, 1996 all the outstanding shares of
its Series B Adjustable Rate Cumulative Preferred Stock, stated
value $50.00, and Series C Adjustable Rate Cumulative Preferred
Stock, stated value $25.00. Each Series B share will be
redeemed at a price of $50.375, consisting of the $50.00 stated
value and accrued dividends of $.375 through the redemption date
at the current annual rate of 6.0 percent. Each Series C share
will be redeemed at a price of $25.375, consisting of the $25.00
stated value and accrued dividends of $.375 through the
redemption date at the current annual rate of 6.0 percent. At
September 30, 1996, there were 600,166 shares of Series B and
504,481 shares of Series C Preferred Stock outstanding.
Additional liquidity is generated from maturities and principal
repayments in the investment portfolio. Scheduled maturities
and anticipated principal repayments of the held to maturity
portfolio will approximate $173 million throughout the balance
17
<PAGE>
of 1996. In addition, all or part of the securities available
for sale portfolio of $2.5 billion 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, 1996, there were $38.0
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
and other banks which further support and enhance liquidity.
18
<PAGE>
PART II. OTHER INFORMATION
---------------------------
ITEM 1. LEGAL PROCEEDINGS.
- ---------------------------
1. Annette Loatman on behalf of herself and all others
---------------------------------------------------
similarly situated v. United Jersey Bank, U.S. District Court
- ----------------------------------------
for the District of New Jersey, Civil Action No. 95-05258 (JBS),
filed October 4, 1995. Reported on Form 10-K for the period
ended December 31, 1995 and on Forms 10-Q for the periods ended
March 31, 1996 and June 30, 1996. Summit Bank (formerly United
Jersey Bank) served a motion for summary judgment on August 22,
1996. The plaintiff's responsive papers have not yet been
received. Additionally, on October 14, 1996, counsel for the
plaintiff filed a companion case, Robert M. Gundle, III, on
-------------------------
behalf of himself and all others similarly situated v. Summit
- -------------------------------------------------------------
Bank, successor in interest to United Jersey Bank, U.S. District
- -------------------------------------------------
Court for the District of New Jersey, Civil Action No. 96-4477
(JBS), which they are seeking to have consolidated into the
Loatman action. The Bank intends to file a motion to dismiss
- -------
this lawsuit, which contains allegations substantially similar
to those set forth in the Loatman matter.
-------
2. In re Payroll Express Corporation of New York and Payroll
---------------------------------------------------------
Express Corporation, United States Bankruptcy Court for the
- -------------------
Southern District of New York, Case Nos. 92-B-43149 (CB) and
92-B-43150 (CB). Reported on Form 10-K for the period ended
December 31, 1995 and on Form 10-Q for the period ended June 30,
1996. In four related matters brought by customers of Payroll
Express, Beth Israel Medical Center et al v. United Jersey Bank
------------------------------------------------------
and National Westminster Bank New Jersey, United States District
- ----------------------------------------
Court for the Southern District of New York, Civil Action No.
94-8256 (LAP); Frederick Goldman, Inc. v. United Jersey Bank and
-------------------------------------------------
National Westminster Bank New Jersey, United States District
- ------------------------------------
Court for the Southern District of New York, Civil Action No.
94-8256 (LAP); New York City Transit Authority v. United Jersey
------------------------------------------------
Bank and National Westminster Bank New Jersey, United States
- ---------------------------------------------
District Court for the Southern District of New York, Civil
Action No. 95-3685; and Copytone, Inc., suing on behalf of
----------------------------------
itself and all others similarly situated, v. United Jersey Bank
- ---------------------------------------------------------------
New Jersey, and John Does 1 through 20, United States District
- --------------------------------------
Court for the Southern District of New York, Civil Action No.
95-3685, the Bank moved to dismiss the customers' claims for
failure to state a claim upon which relief could be granted. On
October 11, 1996, the court granted the Bank's motion in part,
dismissing the claims against the Bank which were based on
negligence, aiding and abetting the wrongful conduct of Payroll
Express, breach of fiduciary duty, fraud, equitable fraud,
conspiracy to conceal check-kiting by Payroll Express, as well
as a part of the conversion claims. The court denied the
remainder of the Bank's motion
19
<PAGE>
but stayed the proceedings as to the remaining
claims until the completion of the preference
action entitled In re Payroll Express Corporation et al - John
----------------------------------------------
S. Pereira, as Chapter 11 Trustee of the Estate of Payroll
- ----------------------------------------------------------
Express Corporation et al v. United Jersey Bank, United States
- -----------------------------------------------
District Court for the Southern District of New York, Civil
Action No. 94-1565 (LAP). Also on October 11, 1996, the court
denied both the Bank's and the Trustee's cross-Motions for
summary judgment in the preference action.
20
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
- ------------------------------------------
(a) Exhibits
--------
(27) Summit Bancorp. financial data schedule - September 30, 1996
(b) Reports on Form 8-K
-------------------
In a current report on Form 8-K dated July 16, 1996, the Company
under Item 5, Other Events, and Item 7, Financial Statements and
Exhibits, issued consolidated balance sheets at June 30, 1996,
December 31, 1995, and June 30, 1995 and consolidated statements
of income for the six months and three months ended June 30,
1996 and 1995.
In a current report on Form 8-K dated August 28, 1996, the
Company under Item 5, Other Events, and Item 7, Financial
Statements and Exhibits, reported the execution of an Agreement
and Plan of Merger, dated August 28, 1996, among B.M.J.
Financial Corp. and Summit Bancorp.
21
<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.
Summit Bancorp.
----------------------
Registrant
DATE: November 13, 1996 BY: /s/ William J. Healy
----------------------
William J. Healy
Executive Vice President and Comptroller
(Chief Accounting Officer)
22
<PAGE>
EXHIBIT INDEX
-------------
Exhibit No. Description
- ----------- ------------------------------------------------------------
(27) Summit Bancorp. financial data schedule - September 30, 1996
23
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
SEPTEMBER 30, 1996 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-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 1349896
<INT-BEARING-DEPOSITS> 9136
<FED-FUNDS-SOLD> 372
<TRADING-ASSETS> 20049
<INVESTMENTS-HELD-FOR-SALE> 2452800
<INVESTMENTS-CARRYING> 3245175
<INVESTMENTS-MARKET> 3208922
<LOANS> 14817455
<ALLOWANCE> 271138
<TOTAL-ASSETS> 22388229
<DEPOSITS> 18309952
<SHORT-TERM> 1510352
<LIABILITIES-OTHER> 338296
<LONG-TERM> 391777
0
42620
<COMMON> 112610
<OTHER-SE> 1682622
<TOTAL-LIABILITIES-AND-EQUITY> 22388229
<INTEREST-LOAN> 891777
<INTEREST-INVEST> 264704
<INTEREST-OTHER> 3831
<INTEREST-TOTAL> 1160312
<INTEREST-DEPOSIT> 395354
<INTEREST-EXPENSE> 477289
<INTEREST-INCOME-NET> 683023
<LOAN-LOSSES> 46500
<SECURITIES-GAINS> 2514
<EXPENSE-OTHER> 592688
<INCOME-PRETAX> 225980
<INCOME-PRE-EXTRAORDINARY> 147103
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 147103
<EPS-PRIMARY> 1.56
<EPS-DILUTED> 1.56
<YIELD-ACTUAL> 4.53
<LOANS-NON> 160881
<LOANS-PAST> 2641
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 20631
<ALLOWANCE-OPEN> 285376
<CHARGE-OFFS> 78200
<RECOVERIES> 17462
<ALLOWANCE-CLOSE> 271138
<ALLOWANCE-DOMESTIC> 143292
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 127846
</TABLE>
