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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, 1997
-----------------------------------------------
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)
- -----------------------------------------------------------------------------
(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, 1997 there were 176,013,383 shares of common stock,
$.80 par value, outstanding.
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<PAGE>
SUMMIT BANCORP.
FORM 10-Q
INDEX
Page No.
Part I Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets -
September 30, 1997, December 31, 1996 and
September 30, 1996........................................ 2
Consolidated Statements of Income -
Three and Nine Months Ended September 30, 1997 and 1996....3
Consolidated Statements of Cash Flows -
Nine Months Ended September 30, 1997 and 1996..............4
Consolidated Statements of Shareholders' Equity -
Nine Months Ended September 30, 1997 and 1996..............5
Consolidated Average Balance Sheets With Resultant
Interest and Rates -
Nine Months Ended September 30, 1997 and 1996..............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...........................................21
Item 2. Changes in Securities.......................................22
Item 3. Defaults Upon Senior Securities.............................22
Item 4. Submission of Matters to a Vote of Security Holders.........22
Item 5. Other Information...........................................22
Item 6. Exhibits and Reports on Form 8-K............................23
Signature...................................................25
Exhibit Index...............................................26
1
<PAGE>
<TABLE>
SUMMIT BANCORP.
CONSOLIDATED BALANCE SHEETS
Unaudited
(dollars in thousands)
<CAPTION>
September 30, December 31, September 30,
1997 1996 1996
------------- ------------ ------------
<S> <C> <C> <C>
Assets
Cash and due from banks $ 1,117,347 $ 1,327,507 $ 1,407,284
Federal funds sold and securities purchased
under agreements to resell 14,359 114,789 4,052
Interest bearing deposits with banks 4,309 24,825 9,136
Securities:
Trading account securities 29,808 26,376 20,049
Securities available for sale 4,596,923 2,872,051 2,643,827
Securities held to maturity 4,078,729 5,422,093 5,492,568
------------- ------------ ------------
Total securities 8,705,460 8,320,520 8,156,444
Loans (net of unearned discount):
Commercial 5,846,194 5,220,939 5,435,472
Commercial mortgage 2,808,423 2,624,427 2,605,424
Residential mortgage 5,803,498 5,904,490 5,689,812
Consumer 4,172,548 3,636,203 3,547,038
------------- ------------ ------------
Total loans 18,630,663 17,386,059 17,277,746
Less: Allowance for loan losses 294,114 280,611 284,223
------------- ------------ ------------
Net loans 18,336,549 17,105,448 16,993,523
------------- ------------ ------------
Premises and equipment 239,209 244,193 243,259
Accrued interest receivable 170,857 169,236 167,303
Due from customers on acceptances 15,814 15,671 15,756
Other assets 487,202 445,082 408,259
------------- ------------ ------------
Total Assets $ 29,091,106 $ 27,767,271 $ 27,405,016
============= ============ ============
Deposits:
Non-interest bearing demand deposits $ 4,256,398 $ 4,080,316 $ 4,178,322
Interest bearing deposits:
Savings and time deposits 16,780,101 16,812,682 16,314,409
Commercial certificates of deposit $100,000 and over 901,529 736,533 960,907
------------- ------------ ------------
Total deposits 21,938,028 21,629,531 21,453,638
------------- ------------ ------------
Other borrowed funds 3,256,136 2,806,367 3,013,320
Accrued expenses and other liabilities 294,432 272,968 264,306
Accrued interest payable 67,640 56,103 65,834
Bank acceptances outstanding 15,814 15,671 15,756
Long-term debt 1,001,617 695,793 397,862
------------- ------------ ------------
Total liabilities 26,573,667 25,476,433 25,210,716
Shareholders' equity:
Preferred stock: Series B and C - - 42,620
Common stock par value $ .80: Authorized 390,000,000 shares;
issued and outstanding 175,735,180 at September 30, 1997; 168,296,135
at December 31, 1996 and issued 168,165,506 at September 30, 1996 140,588 134,637 134,527
Surplus 968,881 918,411 917,238
Retained earnings 1,402,581 1,237,892 1,179,878
ESOP Debt (4,470) (5,816) (6,085)
Net unrealized gain (loss) on securities, net of tax 9,859 5,714 11,985
------------- ------------ ------------
2,517,439 2,290,838 2,280,163
Treasury stock (3,326,663 shares at September 30, 1996) - - (85,863)
------------- ------------ ------------
Total shareholders' equity 2,517,439 2,290,838 2,194,300
------------- ------------ ------------
Total Liabilities and Shareholders' Equity $ 29,091,106 $ 27,767,271 $ 27,405,016
============= ============ ============
<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,
------------------------- -------------------------
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Interest Income
Loans $ 1,121,321 $ 1,034,325 $ 380,000 $ 348,014
Securities:
Trading account securities 1,876 1,172 772 253
Securities available for sale 164,594 121,544 60,313 39,287
Securities held to maturity 243,756 265,282 75,305 86,129
----------- ----------- ----------- -----------
Total securities 410,226 387,998 136,390 125,669
Federal funds sold and securities purchased under agreements to resell 3,579 3,697 982 1,129
Deposits with banks 520 570 129 157
----------- ----------- ----------- -----------
Total interest income 1,535,646 1,426,590 517,501 474,969
----------- ----------- ----------- -----------
Interest Expense
Savings and time deposits 473,169 458,108 158,122 150,774
Commercial certificates of deposit $100,000 and over 35,445 36,376 12,271 12,858
Borrowed funds, including long-term debt 172,420 144,635 59,326 46,192
----------- ----------- ----------- -----------
Total interest expense 681,034 639,119 229,719 209,824
----------- ----------- ----------- -----------
Net interest income 854,612 787,471 287,782 265,145
Provision for loan losses 45,100 47,599 14,500 15,910
----------- ----------- ----------- -----------
Net interest income after provision for loan losses 809,512 739,872 273,282 249,235
----------- ----------- ----------- -----------
Non-Interest Income
Service charges on deposit accounts 85,506 77,823 28,926 26,607
Service and loan fee income 36,753 34,267 12,490 10,999
Trust income 35,342 28,787 12,644 9,975
Securities gains 3,471 1,268 1,265 (237)
Other 54,028 49,378 18,847 16,471
----------- ----------- ----------- -----------
Total non-interest income 215,100 191,523 74,172 63,815
----------- ----------- ----------- -----------
Non-Interest Expenses
Salaries 216,109 200,297 73,254 64,329
Pension and other employee benefits 69,887 68,711 22,233 21,464
Occupancy, net 54,313 59,512 18,027 18,258
Furniture and equipment 57,569 51,236 19,415 17,155
Communications 25,747 24,578 8,416 8,084
Advertising and public relations 16,620 12,673 5,813 4,008
Deposit insurance premiums 4,368 8,352 1,407 2,835
Savings Association Insurance Fund assessment - 11,059 - 11,059
Restructuring charges 83,000 110,700 56,500 -
Other 97,948 96,341 32,221 30,733
----------- ----------- ----------- -----------
Total non-interest expenses 625,561 643,459 237,286 177,925
----------- ----------- ----------- -----------
Income before income taxes 399,051 287,936 110,168 135,125
Federal and state income taxes 140,299 100,992 38,956 47,624
----------- ----------- ----------- -----------
Net Income $ 258,752 $ 186,944 $ 71,212 $ 87,501
=========== =========== =========== ===========
Net Income per Common Share $ 1.48 $ 1.11 $ 0.41 $ 0.52
=========== =========== =========== ===========
Average Common Shares Outstanding (in thousands) 174,896 167,023 175,396 166,908
=========== =========== =========== ===========
<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,
---------------------------
1997 1996
------------- -------------
<S> <C> <C>
Operating activities
Net income $ 258,752 $ 186,944
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses and other real estate owned 46,308 49,943
Depreciation, amortization and accretion, net 58,794 30,410
Restructuring and other non-recurring charges 83,000 121,759
Gains on sales of trading account securities and securities available for sale (1,832) (1,534)
Gains on sales of mortgages held for sale (4,791) (2,968)
Gains on sales of other real estate owned (2,691) (1,616)
Proceeds from sales of other real estate owned 23,865 24,813
Proceeds from sales of mortgages held for sale 318,552 257,643
Originations of mortgages held for sale (336,854) (393,621)
(Increase) decrease in trading account securities (5,071) 22,183
Decrease in accrued interest receivable and other assets 18,475 51,307
Decrease in accrued interest payable, accrued
expenses and other liabilities (107,240) (123,264)
------------- -------------
Net cash provided by operating activities 349,267 221,999
------------- -------------
Investing activities
Purchases of securities held to maturity (191,636) (916,796)
Purchases of securities available for sale (2,050,670) (551,393)
Proceeds from maturities of securities held to maturity 738,691 929,656
Proceeds from maturities of securities available for sale 645,547 376,235
Proceeds from sales of securities available for sale 636,597 151,652
Net decrease in Federal funds sold and securities purchased under
agreements to resell 148,880 174,640
Net decrease in interest bearing deposits with banks 20,614 9,193
Net increase in loans (520,458) (405,692)
Purchases of premises and equipment, net (22,363) (10,794)
------------- -------------
Net cash used in investing activities (594,798) (243,299)
------------- -------------
Financing activities
Net decrease in deposits (541,583) (318,941)
Net increase in short-term borrowings 325,394 523,790
Principal payments on long-term debt (33,452) (33,085)
ESOP debt repayment 911 807
Proceeds from issuance of long-term debt 176,300 -
Proceeds from issuance of capital trust pass-through securities 150,000 -
Dividends paid (120,199) (111,517)
Proceeds from issuance of common stock under dividend
reinvestment and other stock plans 21,704 24,473
Treasury stock purchased - (85,863)
------------- -------------
Net cash used in financing activities (20,925) (336)
------------- -------------
Decrease in cash and due from banks (266,456) (21,636)
Beginning cash balance of acquired entities 56,296 24,946
Cash and due from banks at beginning of period 1,327,507 1,403,974
------------- -------------
Cash and due from banks at end of period $ 1,117,347 $ 1,407,284
============= =============
Supplemental disclosure of cash flow information
Cash paid:
Interest payments $ 671,312 $ 624,193
Income tax payments 145,500 122,836
Noncash investing activities:
Net transfer of securities from held to maturity to available for sale
resulting from acquisitions 805,854 -
Net transfer of loans to other real estate owned 13,518 18,706
<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 ESOP Treasury Unrealized Shareholders'
Stock Stock Surplus Earnings Debt Stock Gain (Loss) Equity
--------- --------- --------- --------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1995 $ 42,620 $ 128,028 $ 864,428 $1,094,624 $ (6,892) $ - $ 7,300 $ 2,130,108
Balances at beginning of
period of immaterial
pooled acquisitions
(6,529,628 shares) - 5,224 29,612 14,054 - - (567) 48,323
Net income - - - 186,944 - - - 186,944
Cash dividends declared:
Preferred stock - - - (1,917) - - - (1,917)
Common stock - - - (113,827) - - - (113,827)
Common stock issued:
Dividend reinvestment
and other stock plans
(431,986 shares) - 339 9,951 - - - - 10,290
Exercise of stock
options, net
(1,169,288 shares) - 936 13,247 - - - - 14,183
ESOP Debt Repayment - - - - 807 - - 807
Treasury stock - - - - - (85,863) - (85,863)
Change in unrealized
gain (loss) on
securities, net of tax - - - - - - 5,252 5,252
--------- --------- --------- --------- ----------- ----------- ----------- -----------
Balance, September 30, 1996 $ 42,620 $ 134,527 $ 917,238 $1,179,878 $ (6,085) $ (85,863) $ 11,985 $ 2,194,300
========= ========= ========= ========= =========== =========== =========== ===========
Balance, December 31, 1996 $ - $ 134,637 $ 918,411 $1,237,892 $ (5,816) $ - $ 5,714 $ 2,290,838
Adjustment for the pooling
of a company with a
different fiscal year end - (158) (4,771) 9,288 539 - 1,832 6,730
--------- --------- --------- --------- ----------- ----------- ----------- -----------
Adjusted beginning balance - 134,479 913,640 1,247,180 (5,277) - 7,546 2,297,568
Balances at beginning of
period of immaterial
pooled acquisition
(6,046,577 shares) - 4,837 34,705 25,562 - - (278) 64,826
Net income - - - 258,752 - - - 258,752
Cash dividends declared
on common stock - - - (128,913) - - - (128,913)
Common stock issued:
Dividend reinvestment
and other stock plans
(184,774 shares) - 148 5,427 - - - - 5,575
Exercise of stock
options, net
(1,404,416 shares) - 1,124 15,005 - - - - 16,129
ESOP Debt repayment - - 104 - 807 - - 911
Change in unrealized
gain (loss) on
securities, net of tax - - - - - - 2,591 2,591
--------- --------- --------- --------- ----------- ----------- ----------- -----------
Balance, September 30, 1997 $ - $ 140,588 $ 968,881 $1,402,581 $ (4,470) $ - $ 9,859 $ 2,517,439
========= ========= ========= ========= =========== =========== =========== ===========
<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,
---------------------------------------------------------------
1997 1996
----------------------------- -----------------------------
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 $ 87,395 $ 3,579 5.48 % $ 76,920 $ 3,697 6.42 %
Interest bearing deposits with banks 12,483 520 5.57 14,168 570 5.37
Securities:
Trading account securities 35,327 1,929 7.30 28,587 1,182 5.52
Securities available for sale 3,446,290 165,933 6.42 2,585,697 122,475 6.32
Securities held to maturity 5,104,860 249,036 6.50 5,609,591 271,122 6.44
----------- --------- ------- ----------- --------- -------
Total securities 8,586,477 416,898 6.47 8,223,875 394,779 6.40
----------- --------- ------- ----------- --------- -------
Loans:
Commercial 5,586,702 355,418 8.51 5,319,191 333,771 8.38
Commercial mortgage 2,798,431 183,432 8.74 2,664,257 172,971 8.66
Residential mortgage 5,985,504 333,928 7.44 5,615,873 314,234 7.46
Consumer 3,997,691 252,690 8.45 3,423,949 217,547 8.49
----------- --------- ------- ----------- --------- -------
Total loans 18,368,328 1,125,468 8.19 17,023,270 1,038,523 8.15
----------- --------- ------- ----------- --------- -------
Total interest earning assets 27,054,683 1,546,465 7.64 25,338,233 1,437,569 7.58
----------- --------- ------- ----------- --------- -------
Non-interest earning assets:
Cash and due from banks 1,033,494 1,287,176
Allowance for loan losses (298,651) (301,051)
Other assets 921,838 876,667
----------- -----------
Total non-interest earning assets 1,656,681 1,862,792
----------- -----------
Total Assets $28,711,364 $27,201,025
=========== ===========
Liabilities and Shareholders' Equity
Interest bearing liabilities:
Savings deposits $ 9,641,202 188,871 2.62 $ 9,268,351 176,387 2.54
Time deposits 7,351,386 284,298 5.17 7,317,940 281,721 5.14
Commercial certificates of deposit
$100,000 and over 880,414 35,445 5.38 901,867 36,376 5.39
----------- --------- ------- ----------- --------- -------
Total interest bearing deposits 17,873,002 508,614 3.80 17,488,158 494,484 3.78
----------- --------- ------- ----------- --------- -------
Commercial paper 44,846 1,830 5.46 43,898 1,726 5.25
Other borrowed funds 3,065,196 125,738 5.48 2,897,490 112,693 5.20
Long-term debt 850,173 44,852 7.03 405,947 30,216 9.92
----------- --------- ------- ----------- --------- -------
Total interest bearing liabilities 21,833,217 681,034 4.17 20,835,493 639,119 4.10
----------- --------- ------- ----------- --------- -------
Non-interest bearing liabilities:
Demand deposits 4,083,140 3,804,624
Other liabilities 335,259 362,201
----------- -----------
Total non-interest bearing liabilities 4,418,399 4,166,825
----------- -----------
Shareholders' equity:
Preferred equity - 42,620
Common equity 2,459,748 2,156,087
----------- -----------
Total Shareholders' Equity 2,459,748 2,198,707
----------- -----------
Total Liabilities and Shareholders' Equity $28,711,364 $27,201,025
=========== --------- =========== ---------
Net Interest Income (tax-equivalent basis) 865,431 3.47 % 798,450 3.48 %
--------- ======= --------- =======
Tax-equivalent basis adjustment (based on a
Federal income tax rate of 35%) (10,819) (10,979)
--------- ---------
Net Interest Income $ 854,612 $ 787,471
========= =========
Net Interest Income as a Percent of Interest
Earning Assets (tax-equivalent basis) 4.28 % 4.21 %
======= =======
<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. In all material respects, the financial
statements presented comply with the current reporting requirements
of supervisory authorities. For additional information and
disclosures required under generally accepted accounting principles
("GAAP"), reference is made to the registrant's 1996 Annual Report
on Form 10-K.
These financial statements give effect to the merger of Collective
Bancorp, Inc. ("Collective") which was consummated on August 1, 1997,
as a result of which all financial information has been restated.
On August 20, 1997, the Board of Directors of the Company approved a
3-for-2 common stock split, payable on September 24, 1997, to
shareholders of record on September 3, 1997. In connection with the
stock split, the Company amended its Restated Certificate of
Incorporation to provide for a corresponding increase in the number
of authorized shares of common stock from 260,000,000 to 390,000,000
and preferred stock from 4,000,000 to 6,000,000 and a decrease in the
par value of the common stock from $1.20 per share to $.80 per share.
Additionally, all share data has been retroactively adjusted for the
common stock split.
The Company currently calculates earnings per share in accordance with
Accounting Principles Board ("APB") Opinion No. 15, "Earnings Per Share."
Earnings per share is calculated by dividing net income, less the
dividends on preferred stocks, 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.
2.) Acquisitions and Restructuring Charges
On August 1, 1997, the Company completed the acquisition of Collective
in an exchange of .895 shares (pre-split) of the Company's common stock
for each share of Collective common stock. As of June 30, 1997,
Collective, which operated Collective Bank, had assets of $5.5 billion,
loans of $2.9 billion and deposits of $3.5 billion, with over 80 branches
in 15 counties located throughout New Jersey.
This acquisition was accounted for as a pooling of interests and all
financial information has been restated to reflect the combined financial
information. After giving effect to the merger exchange ratio and the
common stock split, there were 27.3 million shares of common stock
of the Company issued for all of the outstanding shares of Collective.
A restructuring charge of $56.5 million ($37.1 million or $.21 per share
after tax) was recorded as a result of this acquisition.
7
<PAGE>
On March 1, 1997, the Company completed the acquisition of B.M.J.
Financial Corp. ("BMJ"). This acquisition was accounted for as a
pooling of interests, and was recorded as an adjustment to beginning
shareholders' equity as of January 1, 1997, without restating the
consolidated financial statements for 1996 and prior years.
A restructuring charge of $26.5 million ($16.7 million or $.10 per
share after tax) was recorded as a result of this acquisition.
At December 31, 1996, BMJ had total assets of $676.0 million, loans
of $449.0 million and deposits of $552.0 million, with 20 branches
throughout Burlington, Mercer and Ocean counties.
On December 7, 1996, the Company completed the acquisition of Central
Jersey Financial Corporation ("Central Jersey"). This acquisition
was accounted for as a purchase, and the assets and results of
operations are included from that date. Central Jersey had total
assets of $446.6 million, loans of $200.5 million and deposits of
$376.8 million, with five branches located in central New Jersey.
Intangible assets totaling $41.4 million were recorded as a result
of this acquisition.
On October 1, 1996, Collective completed the acquisition of
Continental Bancorporation ("Continental") for $25.7 million in cash.
This acquisition was accounted for as a purchase. Continental had total
assets of $161.3 million and deposits of $129.5 million, with five
branches located in Camden County. Intangible assets totaling $16.9
million were recorded as a result of this acquisition.
Garden State Bancshares, Inc. was acquired on January 16, 1996, and
The Flemington National Bank and Trust Company was acquired on
February 23, 1996. 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 the consolidated financial statements for 1995 and prior
years. On March 1, 1996, the Company completed its acquisition of
The Summit Bancorporation. This acquisition was accounted for as a
pooling of interests and all financial information has been restated
to reflect the combined results of operations. A restructuring
charge of $110.7 million ($70.0 million or $.42 per share after
tax) was recorded primarily as a result of these acquisitions as well
as a supermarket branch initiative.
3.) Recent Accounting Pronouncements
On March 3, 1997, the Financial Accounting Standards Board (the
"FASB") issued Statement of Financial Accounting Standards ("SFAS")
No. 128, "Earning Per Share." SFAS No. 128 establishes new standards
for the computation and presentation of earnings per share ("EPS") by
simplifying the standards prescribed in APB Opinion No. 15. Under
the new requirements, the Company will be required to present both
basic and diluted EPS on the face of the income statement. Basic EPS
will replace the current EPS terminology and continue to be computed
by dividing income available to common shareholders by the weighted
- -average number of common shares outstanding. Diluted EPS will
include any additional common shares as if all potentially dilutive
common shares were issued. The
8
<PAGE>
Company will be required to adopt
SFAS No. 128 for the period ended December 31, 1997. All prior-period
EPS data is required to be restated. The impact of adopting SFAS
No. 128 is not expected to be material to the Company.
9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
-----------------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
-----------------------------------------------
Summit Bancorp. is a bank holding company located in Princeton,
New Jersey. Effective August 1, 1997, the Company completed its
acquisition of Collective Bancorp, Inc., a unitary savings and loan
holding company and the sole shareholder of Collective Bank, a
federally chartered savings bank. This acquisition was accounted for
as a pooling of interests and all financial information has been
restated to reflect the combined results of operations. See Note 2
of the financial statements.
The Company owns three banks ("bank subsidiaries") and several active
non-bank subsidiaries and currently ranks as the largest New Jersey
- -based bank holding company. The Company's bank subsidiaries provide
a broad range of retail, commercial and private banking services as
well as trust and investment services through a line of business
approach to individuals, businesses, not-for-profit organizations,
government entities and other financial institutions. These services
are provided through an extensive branch network, including
supermarket branches and private banking facilities, as well as
through automated teller machines and personal computers.
Since October 1996, the Company completed three acquisitions that
affect comparisons to prior year financial information. The purchase
acquisitions of Continental Bancorporation and Central Jersey
Financial Corporation were completed on October 1,1996 and
December 7, 1996, respectively. The first quarter acquisition of
B.M.J. Financial Corp. was completed on March 1, 1997, and has
been reflected in the financial statements from January 1, 1997.
FINANCIAL CONDITION
September 30, 1997 versus December 31, 1996
Total assets at September 30, 1997, were $29.1 billion, an increase
of $1.3 billion or 4.8 percent from year-end 1996. Approximately
$816.6 million of this increase was the result of the acquisitions
that were not reflected in the 1996 results. Excluding the impact of
these acquisitions, total assets increased $507.3 million, or 1.8
percent from year-end 1996.
Securities held to maturity at September 30, 1997, were $4.1 billion
and were comprised of $2.9 billion of U.S. Government and Federal agency
securities, $200.8 million of state and political subdivision
securities and $1.0 billion of other securities, predominately
corporate collateralized mortgage obligations. These securities
decreased $1.3 billion or 24.8 percent from year-end 1996. This
decrease primarily resulted from the transfer of securities,
predominately U.S. Government and Federal agency securities, with a
carrying value of $805.9 million to the available-for-sale portfolio.
These securities had a fair market value of $808.4 million. These
transfers were made in connection with the Collective and BMJ
acquisitions and were made to maintain the Company's interest rate
risk position under its existing asset and liability management approach.
10
<PAGE>
Also contributing to this decrease in securities held to maturity were
$738.7 million in maturities, most of which were reinvested in the
available-for-sale portfolio. This decrease was offset by $191.6
million in purchases. At September 30, 1997, the aggregate market
value of the held-to-maturity portfolio was $4.1 billion. The
aggregate market value at December 31, 1996, was $5.3 billion.
At September 30, 1997, securities available for sale amounted to $4.6
billion and were predominately comprised of U.S. Government and Federal
agency securities. These securities increased $1.7 billion or 60.1
percent from year-end 1996. This increase resulted primarily from the
transfer of securities from the held-to-maturity portfolio. For the
first nine months of 1997, $2.1 billion of securities were purchased.
These increases were offset by maturities of $645.5 million and
sales of $636.6 million.
At September 30, 1997, total loans amounted to $18.6 billion and
increased $1.2 billion or 7.2 percent from year-end 1996.
Approximately $502.7 million of this increase was attributable to
acquisitions that were not reflected in the 1996 results. Commercial
loans at September 30, 1997, increased $625.3 million or 12.0
percent from year-end 1996 due to growth in both the middle market
and asset based lending areas. Commercial mortgage loans increased
$184.0 million or 7.0 percent, and residential mortgage loans
decreased $101.0 million or 1.7 percent from December 31, 1996.
Contributing to this decline, in the third quarter $140.5 million of
mortgage loans, predominately adjustable rate, were sold to mitigate
prepayment risk. Consumer loans increased $536.3 million or 14.8
percent from year-end 1996 to $4.2 billion, due to growth in home
equity lending and automobile financing.
Total deposits were $21.9 billion at September 30, 1997, an increase
of $308.5 million or 1.4 percent from December 31, 1996. Demand
deposits increased $176.1 million or 4.3 percent from year-end 1996
to $4.3 billion. Savings and time deposits at $16.8 billion
decreased $32.6 million or .2 percent from December 31, 1996.
Commercial certificates of deposit $100,000 and over were $901.5
million an increase of $165.0 million or 22.4 percent compared to
December 31, 1996.
Borrowed funds, including long-term debt, at September 30, 1997,
increased $755.6 million or 21.6 percent from December 31, 1996, to
$4.3 billion. In the first quarter of 1997, the Company issued
$150.0 million of 8.40 percent capital trust pass-through securities.
The Company has used the proceeds from the capital trust securities
for general corporate purposes. Most of the remaining increase in
borrowed funds was in short-term borrowings which were used to fund
growth in interest-earning assets, particularly in the commercial and
consumer loan categories and securities available for sale.
Total shareholders' equity increased $226.6 million or 9.9 percent
from December 31, 1996, to $2.5 billion. In addition to earnings,
contributing to this increase in shareholders' equity was the BMJ
acquisition, which added $64.8 million. During the third quarter
of 1997, the quarterly dividend paid on common stock was increased
from $.24 to $.27 per share on a
11
<PAGE>
post-split basis. At September 30,
1997, the unrealized gain on securities, net of tax, amounted to
$9.9 million, compared to an unrealized gain of $5.7 million at
year-end 1996.
Capital ratios for September 30, 1997, as compared to select prior
periods, are shown in the following table. The capital ratios for
1997 were benefited by the first quarter issuance of $150.0 million
of capital trust pass-through securities.
<TABLE>
<CAPTION>
Sept. 30, Dec. 31, Sept. 30,
Selected Capital Ratios: 1997 1996 1996
------------------------- --------- -------- ---------
<S> <C> <C> <C>
Equity to assets 8.65% 8.25% 8.01%
Leverage ratio 8.72 7.73 7.57
Tier I capital 12.73 11.68 11.30
Total risk-based capital 15.13 14.17 13.84
</TABLE>
Non-performing Assets
Non-performing assets include non-performing loans and other real
estate owned ("OREO") and are shown in the following table as of
September 30, 1997, December 31, 1996, and September 30, 1996.
<TABLE>
<CAPTION>
Sept. 30, Dec. 31, Sept. 30,
1997 1996 1996
--------- --------- ---------
<S> <C> <C> <C>
Non-performing loans:
Commercial and industrial $ 31,368 $ 54,308 $ 52,961
Construction 10,760 31,901 32,857
Real estate related 46,829 52,922 81,648
--------- --------- ---------
Total non-performing loans 88,957 139,131 167,466
OREO 19,121 26,406 26,618
--------- --------- ---------
Total non-performing assets $ 108,078 $ 165,537 $ 194,084
========= ========= =========
Non-performing loans to
total loans 0.48% 0.80% 0.97%
Non-performing assets to
total loans and OREO 0.58 0.95 1.12
</TABLE>
The average balance of non-performing loans for the nine months
ended September 30, 1997, was $113.1 million. Interest income
received on non-performing loans amounted to $2.0 million for the
nine months ended September 30, 1997. Certain loans, primarily
consumer and residential mortgage loans, which are 90 days past
due are not included in non-performing loans because they are well
collateralized and in the process of collection. These loans
amounted to $67.5 million at September 30, 1997, compared to $79.0
million and $85.1 million at December 31, 1996, and September 30,
1996, respectively.
12
<PAGE>
Allowance for Loan Losses
The allowance for loan losses at September 30, 1997, was $294.1
million, or 1.58 percent of loans, compared to $280.6 million or
1.61 percent of loans at December 31, 1996, and $284.2 million or
1.65 percent of loans at September 30, 1996. For the nine months
ended September 30, 1997, net charge offs were $41.6 million, or
.30 percent of average loans compared to $62.9 million, or .49
percent of average loans in the first nine months of 1996. For
the quarter ended September 30, 1997, net charge offs amounted to
$14.5 million, or .31 percent of average loans compared to $20.9
million, or .48 percent of average loans for the third quarter of
1996. The coverage of non-performing loans at September 30, 1997,
was 330.62 percent compared to 201.69 percent at year-end 1996,
respectively.
Transactions in the allowance for loan losses are shown in the
following table (dollars in thousands):
<TABLE>
<CAPTION>
Nine Months Ended September 30,
-------------------------------
1997 1996
--------------- -------------
<S> <C> <C>
Balance, January 1 $ 280,611 $ 293,160
Acquisition adjustments, net 9,994 6,342
Provision charged to expense 45,100 47,599
--------------- -------------
335,705 347,101
Less charge offs:
Commercial and industrial 19,143 29,725
Construction and development 2,872 15,327
Commercial mortgage 9,687 16,985
Residential mortgage 11,622 4,799
Consumer 21,522 13,504
--------------- -------------
Total charge offs 64,846 80,340
--------------- -------------
Add recoveries:
Commercial and industrial 10,562 9,034
Construction and development 3,274 2,321
Commercial mortgage 3,841 2,238
Residential mortgage 769 497
Consumer 4,809 3,372
--------------- -------------
Total recoveries 23,255 17,462
--------------- -------------
Net charge offs 41,591 62,878
--------------- -------------
Balance, September 30 $ 294,114 $ 284,223
=============== =============
</TABLE>
13
<PAGE>
A standardized process has been established to assess the adequacy
of the allowance for loan losses and to identify the risks inherent
in the loan portfolio. This process incorporates credit reviews
and gives consideration to areas of exposure such as concentrations
of credit, economic and industry conditions, trends in delinquencies
and collections, collateral coverage, and the composition of the
performing and non-performing loan portfolios. The allowance for
loan losses is maintained at a level that management believes to be
adequate to absorb anticipated loan losses. The unallocated portion
of the allowance for loan losses, in excess of specific and general
reserves, was $155.5 million at September 30, 1997, compared to
$133.2 million at December 31, 1996.
14
<PAGE>
RESULTS OF OPERATIONS
For the third quarter of 1997, the Company reported net income of
$71.2 million or $.41 per share compared to net income of $87.5
million or $.52 per share earned during the third quarter of 1996.
The results for the three months ended September 30, 1997, include
a merger-related restructuring charge of $56.5 million ($37.1
million or $.21 per share, after tax) associated with the
Collective acquisition. Included in the results for the third
quarter of 1996 was an $11.1 million ($6.8 million or $.04 per
share, after tax) accrual for a one-time special assessment to
recapitalize the Savings Association Insurance Fund.
For the nine months ended September 30, 1997, net income amounted to
$258.8 million, or $1.48 per share compared to $186.9 million, or
$1.11 per share for the nine months ended September 30, 1996. In
addition to the Collective restructuring charge the nine months
ended September 30, 1997, includes a first quarter restructuring
charge of $26.5 million, $16.7 million or $.10 per share, after-tax,
related to the BMJ acquisition. The results for the nine months
ended September 30, 1996, also include first quarter restructuring
charges of $110.7 million, $70.0 million or $.42 per share, after
- -tax, primarily related to the acquisitions of The Summit
Bancorporation, Flemington, and Garden State. Included in the
1996 charges were expenses recorded in conjunction with an announced
agreement to open 70 in-store supermarket branches. Excluding the
effects of the non-recurring charges, net income would have been
$312.5 million or $1.79 per share for the first nine months of 1997,
and $263.7 million or $1.57 per share for the prior year period,
a 14.0 percent increase. Key performance indicators are as follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
1997 1996 1997 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Before non-recurring charges charges
Net income $108,312 $94,266 $312,532 $263,688
Dividends per share 0.27 0.24 0.75 0.66
Earnings per share 0.62 0.56 1.79 1.57
Return on:
Average assets 1.50% 1.38% 1.46% 1.29%
Average common equity 17.02 17.20 16.99 16.22
Efficiency ratio 49.64 49.91 50.12 52.22
After non-recurring charges
Net income $ 71,212 $87,501 $258,752 $186,944
Earnings per share 0.41 0.52 1.48 1.11
Return on:
Average assets 0.98% 1.29% 1.20% 0.92%
Average common equity 11.19 15.96 14.06 11.46
</TABLE>
15
<PAGE>
Net interest income
Interest income on a tax-equivalent basis was $1.5 billion for the
nine months ended September 30, 1997, an increase of $108.9 million,
or 7.6 percent, compared to the prior year period. This increase
was primarily due to growth in interest earning assets. Interest
- -earning assets averaged $27.1 billion, an increase of $1.7 billion,
or 6.8 percent compared to the prior year period.
Interest expense increased $41.9 million, or 6.6 percent, for the
nine months ended September 30, 1997, compared to the same period
in 1996. Interest-bearing liabilities averaged $21.8 billion, an
increase of $997.7 million, or 4.8 percent, from the prior year
period. This increase in interest-bearing liabilities contributed
$30.9 million to the increase in interest expense.
Net interest income on a tax-equivalent basis was $291.3 million for
the three months ended September 30, 1997, an increase of $22.9
million, or 8.5 percent, compared to the same period in 1996. Net
interest income on a tax-equivalent basis was $865.4 million for the
nine months ended September 30, 1997, an increase of $67.0 million,
or 8.4 percent, compared to the same period in 1996.
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 3.43 percent for the quarter ended September 30, 1997, compared
to 3.48 percent for the prior year period. The net interest spread
was 3.47 percent for the nine months ended September 30, 1997,
compared to 3.48 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 4.26 percent
during the third quarter of 1997 compared to 4.23 percent during
the same period in 1996. Net interest margin was 4.28 percent during
the first nine months of 1997 compared to 4.21 percent during the
same period in 1996. The increase in net interest margin reflected
the benefits from an improved asset mix and favorable spreads on
loan yields and deposit costs.
Asset and liability management efforts involve the use of certain
derivative financial instruments for purposes of stabilizing net
interest income in a changing interest rate environment. At
September 30, 1997, the derivative financial instruments portfolio
consisted primarily of interest rate swaps, caps and floors with
notional values of $413.0 million, $1.2 billion and $430.0 million,
respectively. These derivatives resulted in a net interest income
reduction of $.9 million for the first nine months of 1997 compared
to a reduction of $1.3 million through the nine months of 1996.
The cost to terminate these contracts at September 30, 1997 would
have been $.3 million.
As a result of continued improvement in asset quality ratios, the
third quarter provision for loan losses for 1997 was $14.5 million,
a decrease of $1.4 million or 8.9 percent compared with $15.9
million for the same period a year ago. For the nine months ended
September
16
<PAGE>
30, 1997 the provision for loan losses was $45.1 million,
a decrease of $2.5 million or 5.3 percent compared to the prior year
period.
Non-interest income
Non-interest income for the third quarter of 1997 totaled $74.2
million, an increase of $10.4 million, or 16.2 percent, compared
with the third quarter of 1996. Excluding securities gains, total
non-interest income was $72.9 million for the third quarter of 1997,
an increase of $8.9 million, or 13.8 percent, from the prior year
quarter. For the nine months ended September 30, 1997, non-interest
income totaled $215.1 million, an increase of $23.6 million, or
12.3 percent from the prior year period.
Excluding securities gains, total non-interest income was $211.6
million for the nine months ended September 30, 1997, an increase
of $21.4 million, or 11.2 percent, from the prior year period. For
the third quarter of 1997, net gains of $1.3 million on the sales
and early redemptions of securities were realized compared with net
loses of $.2 million in the third quarter of 1996. On a year-to-date
basis, securities gains were $3.5 million, compared to $1.3 million
during the first nine months of 1996.
For the third quarter of 1997, service charges on deposits were
$28.9 million, an increase of $2.3 million or 8.7 percent compared
with the third quarter of 1996. On a year-to-date basis, 1997
service charges on deposit accounts have increased $7.7 million,
or 9.9 percent as compared to the same period in 1996. These
increases were primarily attributable to higher fee income from
business and personal demand deposit accounts. Fee income on
demand deposit accounts increased primarily as a result of a
larger customer base, resulting from acquisitions, in 1997 when
compared to 1996.
Service and loan fee income for the third quarter of 1997 was $12.5
million, an increase of $1.5 million or 13.6 percent compared with
the third quarter of 1996. On a year-to-date basis, 1997 service
and loan fee income has increased $2.5 million, or 7.3 percent as
compared to the same period in 1996. These increases are
attributable to higher fee income on commercial loans, merchant
credit card and consumer debit card processing, partially offset
by a decline in mortgage origination fees.
Trust fee income for the third quarter of 1997 was $12.6 million,
an increase of $2.7 million or 26.8 percent compared with the
third quarter of 1996. For the nine months ended September 30,
1997, trust fee income amounted to $35.3 million, an increase of
$6.6 million or 22.8 percent compared to the prior year period.
These increases were largely due to increases in fee income from
the sales of mutual funds through the Company's extensive retail
distribution channels.
For the three months ended September 30, 1997, other income
increased $2.4 million, or 14.4 percent as compared to the third
quarter of 1996. For the nine months ended September 30, 1997,
other income amounted to $54.0 million, an increase of $4.7 million, or
17
<PAGE>
9.4 percent as compared to the prior year period. These
increases were primarily attributable to service fees earned on
the sale of annuity products and ATM access fees.
Non-interest expenses
Non-interest expenses for the third quarter of 1997 totaled
$237.3 million compared to $177.9 for the third quarter of 1996,
representing an increase of $59.4 million, or 33.4 percent.
For the first nine months of 1997, non-interest expenses amounted
to $625.6 million, compared to $643.5 million for the prior year
period. Non-interest expenses for the first nine months of 1997
and 1996 included non-recurring charges of $83.0 million and
$121.8 million, respectively. Excluding these non-recurring
charges, non-interest expenses increased $20.9 million, or 4.0
percent for the first nine months of 1997 when compared to the
prior year period.
During the third quarter of 1997, the Company recorded a
non-recurring restructuring charge of $56.5 million in connection
with the Collective acquisition. This charge anticipates the
expenses associated with the costs of integrating Collective into
the Company. These costs will include severance pay and benefits
for terminated employees, real estate expenses incurred when
branches and other operational facilities are consolidated,
charges for professional fees and data processing, which primarily
include costs associated with the disposal or write-offs of duplicate
or non-useable software or hardware systems. Management believes
that this charge is for non-recurring expenses which will have no
future economic value to the Company. Funding for cash expenditures
related to this charge has, and will be paid for out of operations
of the Company. Liquidity will not be significantly impacted by
these restructuring costs.
Salaries expense for the third quarter of 1997 was $73.3 million,
which increased $8.9 million, or 13.9 percent from the prior year
period. On a year-to-date basis, salaries expense for 1997 amounted
to $216.1 million, an increase of $15.8 million, or 7.9 percent
from a year ago. Salaries expenses for the third quarter and the
nine months ended September 30, 1997 reflected expense associated
with certain acquisitions which are not included in 1996 results.
Salaries expense for the quarter and nine-month period ended
September 30, 1997 have been impacted by merit increases and
higher levels of commissions and fee-based compensation.
For the third quarter of 1997, pension and other employee benefits
increased $.8 million, or 3.6 percent, as compared to the third
quarter of 1996. For the first nine months of 1997, pension and
other employee benefits increased $1.2 million, or 1.7 percent, as
compared to the prior year period.
Occupancy expenses for the third quarter of 1997 decreased $.2
million, or 1.3 percent, compared to the prior year period. On a
year-to-date basis, occupancy expenses for 1997 decreased $5.2
million, or 8.7 percent as compared to 1996. These decreases were
due in part to the lower rental and maintenance expenses associated
with the 419 full-service branches operated at September 30, 1997,
as compared to 440 full-service branches operated
18
<PAGE>
at September 30,
1996. In addition, the year-to-date decrease was partially
attributable to the expenses associated with the severe weather
conditions experienced during the first quarter of 1996.
Furniture and equipment expenses rose $2.3 million, or 13.2 percent,
in the third quarter of 1997 when compared with the third quarter of
1996. For the nine months ended September 30, 1997, furniture and
equipment expenses increased $6.3 million, or 12.4 percent as
compared to the prior year period. These increases were due in
part to new computer equipment leases for branch automation
equipment installed at acquired institutions.
Communications expense increased $.3 million, or 4.1 percent for
the three months ended September 30, 1997, as compared to the prior
year quarter. On a year-to-date basis, communications expense
increased $1.2 million, or 4.8 percent when compared to the first
nine months of 1996. These increases were attributable to higher
telecommunications expenses, as a result of branch rewiring and
technology updates.
Advertising and public relations expense for the three months and
nine months ended September 30, 1997, increased $1.8 million and
$3.9 million respectively over the comparable periods in 1996. These
increases were due in part to the additional costs to promote the
Company and its products in the new markets it serves as a result of
the acquisitions in late 1996 and 1997.
Deposit insurance premiums decreased $1.4 million and $4.0 million
for the respective three and nine-month periods ended September 30,
1997 compared to the prior year periods.
For the third quarter of 1997, other operating expenses increased
$1.5 million, or 4.8 percent as compared to the third quarter of
1996. For the nine months ended September 30, 1997, other operating
expenses increased $1.6 million, or 1.7 percent as compared to the
prior year period. These increases can be partially attributable to
an increase in acquisition premium amortization for purchase
acquisitions in 1996 and employment agency fees offset by declines
in OREO expenses.
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 due from banks from operating, investing and financing activities.
During the first nine months of 1997, net cash provided by operating
activities totaled $349.3 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.
19
<PAGE>
Net cash used in investing activities totaled $594.8 million and was
the result of investment and loan activity. For the nine months
ended September 30, 1997, net cash used in transactions involving
the investment portfolios totaled $221.5 million, while the growth
in the loan portfolio used $520.5 million. These net uses of cash
were partially offset by a decrease of $148.9 million Federal funds
sold and securities purchased under agreements to resell.
Scheduled maturities and anticipated principal repayments of the
held to maturity portfolio will approximate $325 million throughout
the balance of 1997. In addition, the securities available for
sale portfolio is another source of liquidity. These sources can
also be used to meet the funding needs during periods of loan growth.
Net cash used in financing activities totaled $20.9 million. During
the first nine months of 1997, total deposits decreased $541.6
million and the payment of dividends totaled $120.2 million. These
uses of cash were partially offset by the issuance of $150.0 million
in capital trust pass-through securities and a net increase in short
- -term and long-term borrowings totaling $469.2 million. Liquidity
is also available through additional lines of credit and the ability
to incur additional debt. 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 correspondent banks
which further support and enhance liquidity.
LOOKING AHEAD
This report contains certain forward-looking statements, either
expressed or implied, which are provided to assist the reader to
understand anticipated future financial performance. These
forward-looking statements involve certain risks, uncertainties,
estimates and assumptions made by management. Factors that
may cause actual results to differ from those results expressed
or implied include, but are not limited to, the interest rate
environment and the overall economy, the ability of customers to
repay their obligations, the adequacy of the allowance for loan
losses, the progress of integrating acquired financial
institutions, competition and technological changes. Although
management has taken certain steps to mitigate the negative effect
of the above mentioned items, significant unfavorable changes could
severely impact the assumptions used and have an adverse affect on
profitability.
20
<PAGE>
PART II. OTHER INFORMATION
---------------------------
ITEM 1. LEGAL PROCEEDINGS.
- ---------------------------
1. Michael Hochman and Joan Hochman, individually and on behalf
------------------------------------------------------------
of a class of similarly situated depositors v. United Jersey Bank,
- ------------------------------------------------------------------
a New Jersey corporation and UJB Financial Corp., a New Jersey
- ------------------------
Corporation, filed on December 7, 1995 in the Superior Court of
New Jersey, Law Division, Middlesex County, Docket No.
MID-L-10623-95. Reported on Form 10-K for the period ended December
31, 1996 and on Form 10-Q for the periods ended March 31, 1997 and
June 30, 1997. On August 1, 1997, the court dismissed the remaining
counts of the complaint against the Bank and the holding company.
The plaintiffs did not appeal the decision and this matter
is now concluded.
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-43 149 (CB) and
92-B-43 150 (CB). Reported on Form 10-K for the period ended
December 31, 1996 and on Form 10-Q for the period ended June
30, 1997. On September 4, 1997, the court approved a settlement
in John E. Pereira, as Chapter 11 Trustee of the Estate of
-------------------------------------------------------
Payroll Express Corporation et al v. United Jersey Bank, United
- -------------------------------------------------------
States Bankruptcy Court for the Southern District of New York,
Adversary Proceeding No. 94-8297A, pursuant to which Summit paid
the sum of $300,000.00 to the Trustee. The adversary proceeding
was dismissed on September 16, 1997. Neither the trustee's
preference claim against the Bank nor the Payroll Express
customers' claims are affected by the settlement.
3. 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. 95-5258 (JBS), filed on
October 4, 1995. Robert M. Gundle, on behalf of himself and all
----------------------------------------------
other 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), filed on October 14, 1996.
Reported on Form 10-K for the period ended December 31, 1996.
On August 28, 1997, the court entered an order directing the Bank
to compensate Loatman's attorneys for fees and costs stemming from
their efforts to enjoin employees of the Bank from contacting
plaintiff personally and in connection with their motion for
sanctions. On August 29, 1997, the court granted the Bank's
motion for summary judgment as to all federal claims asserted
in both matters, and dismissed the plaintiffs' complaints as to
the remaining claims for lack of supplemental jurisdiction.
On September 19, 1997, Plaintiff's attorneys filed a fee application
in the U.S. District Court, pursuant to the August 28, 1997 order,
which the Bank opposed. No decision has been rendered by the court.
On September 24, 1997, the Bank filed a notice of appeal from the
August 28, 1997 order to the United States Court of Appeals for
the Third Circuit.
On September 26, 1997, the Superior Court of New Jersey, Camden
County, orally granted Loatman's application to reinstate her state
court complaint in the matter Annette Loatman, on
-------------------
21
<PAGE>
behalf of herself
- -----------------
and all others similarly situated v. United Jersey Bank, Superior
- -------------------------------------------------------
Court of New Jersey, Docket No. CAM-L-3526-96. No formal order has
yet been entered.
4. Daniel Iverson, Lawrence Cohen and Terri Cohen, on behalf of
------------------------------------------------------------
themselves and all others similarly situated v. Collective Bank, a
- ------------------------------------------------------------------
federally chartered savings bank organized under the laws of the
- ----------------------------------------------------------------
United States of America (improperly named as Collective Bancorp,
- -----------------------------------------------------------------
Inc., a Delaware corporation), on behalf of itself and all others
- -----------------------------------------------------------------
similarly situated. Superior Court of New Jersey, Atlantic County,
- ------------------
Docket No. ATL-L-2578-95, filed on July 26, 1995. In their
complaint, plaintiffs contend that, under the New Jersey Mortgage
Financing Law, a lender may not charge an attorney review fee to
a borrower in connection with a residential mortgage transaction.
They contend that Collective's so doing was a violation of that law
and of the New Jersey Consumer Fraud Act. The measure of damages
sought is the total amount of review fees paid by members of the
putative (but as yet uncertified) class. Plaintiffs also seek
treble damages under the Consumer Fraud Act. On October 2, 1997,
the court entered an order granting partial summary judgment to
the plaintiffs. On October 17, 1997, the Bank filed a notice of
motion for leave to appeal to the Appellate Division of the
Superior Court of New Jersey.
ITEM 2. CHANGES IN SECURITIES.
- -------------------------------
(a) On August 20, 1997, the Board of Directors of the Registrant
approved a three for two split up on the capital stock of the
Registrant, payable on September 24, 1997 to shareholders of
record on September 3, 1997. In connection with the stock
split, the Registrant amended its Restated Certificate of
Incorporation to provide for a corresponding increase in the
number of authorized shares of common stock from 260,000,000
to 390,000,000 and preferred stock from 4,000,000 to
6,000,000 and a decrease in the par value of the common stock
from $1.20 per share to $.80 per share.
Also in connection with this stock split, pursuant to the
Rights Agreement, dated as of August 16, 1989 between the
Registrant and First Chicago Trust Company of New York, the
exercise price and the number of shares of Series R Preferred
Stock purchasable upon exercise of the Registrants preferred
stock purchase rights were adjusted from $90 to $60 and from
one-hundredth of a share to one-hundred and fiftieth of a
share, respectively.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
- -----------------------------------------
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
- -------------------------------------------------------------
Not applicable.
ITEM 5. OTHER INFORMATION.
- ---------------------------
Not applicable.
22
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
- ------------------------------------------
(a) Exhibits
--------
(2) A(i) Certificate of Amendment effective September 24,
1997 to the Restated Certificate of
Incorporation of Summit Bancorp.
(2) A(ii) Restated Certificate of Incorporation of Summit
Bancorp. dated August 8, 1997 as amended
effective September 24, 1997
(3) A(i) Notice to Rights Agent dated August 20, 1997
(27.1) Summit Bancorp. financial data schedule - September 30, 1997
(27.2) Summit Bancorp. financial data schedule - June 30, 1997
(27.3) Summit Bancorp. financial data schedule - March 31, 1997
(27.4) Summit Bancorp. financial data schedule - September 30, 1996
(27.5) Summit Bancorp. financial data schedule - December 31, 1996
(27.6) Summit Bancorp. financial data schedule - December 31, 1995
(27.7) Summit Bancorp. financial data schedule - December 31, 1994
(b) Reports on Form 8-K
-------------------
In a current report on Form 8-K dated July 28, 1997, the
Company under Item 7 Financial Statements, Pro Forma Financial
Information and Exhibits reported audited financial statements
and notes for Collective Bancorp, Inc. ("Collective"). These
financial statements included audited balance sheets at June 30,
1996 and 1995, audited statements of income, cash flows, and
stockholders' equity for the three years ended June 30, 1996.
The Company also reported interim financial statements for
Collective. These financial statements included balance sheets
at March 31, 1997 and June 30, 1996, statements of income, cash
flows and stockholders' equity for the three months and nine
months ended March 31, 1997 and 1996. The Company also reported
Pro Forma Financial Information which included a condensed pro
forma balance sheet at March 31, 1997 and condensed pro forma
statements of income
23
<PAGE>
for the nine months ended March 31, 1997
and 1996 and the years ended December 31, 1996, 1995, and 1994.
In a current report on Form 8-K dated August 1, 1997, the
Company under Item 2 Acquisitions or Disposition of Assets
reported the completion of the pooling acquisition of
Collective on August 1, 1997.
In a current report on Form 8-K dated August 20, 1997, the
Company under Item 5 Other Events reported that Board of
Directors of the Company approved a 3-for-2 stock split of
its common stock, payable on September 24, 1997 to shareholders
of record on September 3, 1997. The Board of Directors of the
Company also approved a 12.5 percent increase in the Company's
quarterly common stock cash dividend from $.24 per common share
(as adjusted for the stock split) to $.27 per share on a post
-split basis.
24
<PAGE>
SIGNATURE
---------
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, 1997 BY: /s/ WILLIAM J. HEALY
-----------------------
William J. Healy
Executive Vice President
and Comptroller
(Duly Authorized Officer
and Chief Accounting
Officer)
25
<PAGE>
EXHIBIT INDEX
-------------
Exhibit No. Description
- ----------- -------------------------------------------------
(2) A(i) Certificate of Amendment effective September 24,
1997 to the Restated Certificate of
Incorporation of Summit Bancorp.
(2) A(ii) Restated Certificate of Incorporation of Summit
Bancorp. dated August 8, 1997 as amended
effective September 24, 1997
(3) A(i) Notice to Rights Agent dated August 20, 1997
(27.1) Summit Bancorp. financial data schedule - September 30, 1997
(27.2) Summit Bancorp. financial data schedule - June 30, 1997
(27.3) Summit Bancorp. financial data schedule - March 31, 1997
(27.4) Summit Bancorp. financial data schedule - September 30, 1996
(27.5) Summit Bancorp. financial data schedule - December 31, 1996
(27.6) Summit Bancorp. financial data schedule - December 31, 1995
(27.7) Summit Bancorp. financial data schedule - December 31, 1994
26
CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
SUMMIT BANCORP.
_______________
To: The Secretary of State
State of New Jersey
Pursuant to the provisions of Section 14A:7-15.1(3) of the New Jersey
Business Corporation Act, the undersigned corporation hereby executes the
following Certificate of Amendment to its Restated Certificate of
Incorporation dated August 8, 1997 (the "Certificate of Incorporation"):
1. The name of the corporation is Summit Bancorp. (the "Corporation").
2. The Board of Directors of the Corporation duly adopted a resolution
approving of the division of the shares of the Corporation at a regular
meeting of the Board of Directors held on August 20, 1997.
3. The Amendment to the Certificate of Incorporation set forth in Section
Five hereof shall not adversely affect the rights or preferences of the
holders of outstanding shares of any class or series and will not result in
the percentage of authorized shares that remains unissued after the share
division exceeding the percentage of authorized shares that was unissued
before the share division.
4. (a) The Two Hundred Sixty Million (260,000,000) shares of the Common
Stock, $1.20 par value per share, of the Corporation presently authorized
are to be divided into Three Hundred Ninety Million (390,000,000) of Common
Stock, $0.80 par value per share.
(b) The Four Million (4,000,000) shares of the Preferred Stock, without
par value, of the Corporation presently authorized are to be divided into
Six Million (6,000,000) shares of the Preferred Stock, without par value.
5. The following amendment to the Certificate of Incorporation set forth
below was approved by the Board of Directors of the Corporation on August 20,
1997 in connection with the three-for- two division of the shares of the
capital stock of the Corporation authorized, issued and outstanding at the
close of business September 3, 1997, payable on September 24, 1997 to
shareholders of record
<PAGE>
at the close of business on September 3, 1997 and the
change in the par value of all authorized common stock of the Corporation
from $1.20 per share to $0.80 per share:
3. The total number of shares of capital stock authorized and which
may be issued by this Corporation is Three Hundred Ninety-Six Million
(396,000,000) shares, of which Three Hundred Ninety Million (390,000,000)
shares of Eighty Cents ($0.80) par value each shall be designated as Common
Stock, and of which Six Million (6,000,000) shares without par value shall
be designated as Preferred Stock. All or any part of such authorized
Common Stock and Preferred Stock may be issued by the Corporation from
time to time and for such consideration as may be determined upon and
fixed by the Board of Directors as provided by law.
6. The dividend of shares set forth herein is to become payable and the
amendment to the Certificate of Incorporation set forth herein is to become
effective at 11:59 p.m., September 24, 1997.
Dated this 16th day of September, 1997.
By:/s/RICHARD F. OBER, JR.
_______________________________
Richard F. Ober, Jr.
Executive Vice President
RESTATED
CERTIFICATE OF INCORPORATION
OF
SUMMIT BANCORP.
(Filed August 8, 1997)
SUMMIT BANCORP., a corporation formed pursuant to the provisions of
the New Jersey Business Corporation Act (N.J.S.A. 14A: 1-1 et. seq.), hereby
restates its Certificate of Incorporation pursuant to the provisions of the
New Jersey Business Corporation Act (N.J.S.A. 14A:9-5).
1. The name of the Corporation is SUMMIT BANCORP.
2. The purposes for which the corporation is formed are:
A. To engage in and carry on the business of a
registered bank holding company.
B. To acquire, by purchase, subscription or
otherwise, own, hold for investment or otherwise, use, sell, exchange,
mortgage, pledge, hypothecate, create a security interest in, or
otherwise deal with and dispose of, any and all securities, as
hereinafter defined, and to possess and exercise any and all rights,
powers and privileges of ownership of any and all such securities,
including the right to vote thereon and to consent, assent or dissent
with respect thereto for any and all purposes, and to issue or deliver
its own securities in payment or exchange, in whole or in part, for
any securities or to make payment therefor by any other lawful means;
to aid by loan, subsidy or in any other lawful manner any corporation,
firm, organization, association or other entity in which the
Corporation may be or become interested through the direct or indirect
holding of securities or in any other manner; to do any and all acts
and things for the enhancement, protection or preservation of
any securities which are in any manner, directly or indirectly, held
or guaranteed by the Corporation, and to do any and all acts and
things designed to accomplish any such purpose.
The term "securities", as used in this article,
shall mean any and all shares, stocks, bonds, debentures, notes,
acceptances, voting trust certificates, certificates of deposit,
evidences of indebtedness, other obligations, certificates of any
interest in or of the deposit of any of the foregoing, scrip, interim
or other receipts, warrants or rights to subscribe for or purchase, or
guarantees of, any of the foregoing, or any other interests or
instruments commonly known as securities.
C. To the extent permitted by law, to cause to be
formed, organized, reorganized, consolidated, merged or liquidated and
to take charge of, any corporation, firm, organization, association or
other entity, foreign or domestic.
D. To the extent permitted by law, to furnish
services to and perform services for, and to act in any representative
capacity for, any corporation, firm, organization, association, or
other entity in which the Corporation may be or become interested
through the direct or indirect holding of securities or in any other
manner, whether in the development, exploitation, promotion, operation,
management, liquidation, or otherwise, of any of the business or
property thereof or of any lawful enterprise related thereto.
E. To make loans and give other forms of credit
with or without security.
<PAGE>
F. To borrow money for its corporate purposes; to
draw, make, accept, endorse, execute, issue, deliver and negotiate
bonds, debentures, promissory notes, drafts, bills of exchange and
other negotiable or transferable instruments and to secure the payment
thereof and the interest thereon by a deed or deeds of trust or by
mortgage or pledge of or upon, or by the creation of a security
interest in, all or any part of the property of the Corporation, real
or personal, or any interest therein, wherever situated, whether at
the time owned or thereafter acquired, and to sell, pledge, create a
security interest in or otherwise dispose of such bonds, debentures,
notes or other obligations.
G. To purchase, lease or otherwise acquire, take,
hold, own, use, improve, maintain, develop, complete, extend, manage,
operate, mortgage or otherwise impose a lien upon or create a security
interest in, sell, exchange, lease or otherwise dispose of or convey
or transfer in any manner, buildings, storage and other facilities,
real and personal property of all kinds, and any and all rights,
interests or easements therein, without limit as to amount and
wherever situated.
H. To engage in any such activity directly or
through a subsidiary or subsidiaries, and to take all acts deemed
appropriate to promote the interest of such subsidiary or
subsidiaries, including without limiting the foregoing, making
contracts and incurring liabilities for the benefit of such
subsidiary or subsidiaries; and transferring or causing to be
transferred to any such subsidiary or subsidiaries assets of the
Corporation.
I. To guarantee the bonds, debentures, notes or
other evidences of indebtedness issued, or obligations incurred by
subsidiary companies in which the Corporation holds, directly or
indirectly, at least a majority of the voting stock, or by any
corporation, partnership, limited partnership, joint venture or other
association where the Corporation has or may acquire a substantial
interest in such corporation, partnership, limited partnership,
joint venture or other association or where such guarantee is
otherwise in furtherance of the interest of the Corporation.
J. To provide that the obligations of such
subsidiary companies may be convertible into, or exchangeable for,
or carry rights or options to purchase or subscribe to, or both,
shares of the Corporation of any class.
<PAGE>
K. In general, to do any and all of the acts
and things herein set forth to the same extent as natural persons
could do, and in any part of the world, as principal, factor, agent,
contractor or otherwise, either alone or in company with any person,
entity, syndicate, partnership, association, corporation or others;
to establish and maintain offices and agencies within and anywhere
outside of the State of New Jersey; and to exercise all or any of its
corporate powers and rights in the State of New Jersey and in any and
all other states, territories, districts, possessions or dependencies
of the United States of America and in any other countries or places.
L. To do everything necessary, proper, advisable
or convenient for the accomplishment of any of the purposes herein
set forth and to do every other act and thing incidental thereto or
connected therewith, provided the same be not forbidden by law.
3. The total number of shares of capital stock authorized and
which may be issued by this Corporation is Two Hundred Sixty-Four Million
(264,000,000) shares, of which Two Hundred Sixty Million (260,000,000) shares
of One and 20/100 Dollars ($1.20) par value each shall be designated as Common
Stock, and of which Four Million (4,000,000) shares without par value shall
be designed as Preferred Stock. All or any part of such authorized Common
Stock and Preferred Stock may be issued by the Corporation from time to time
and for such consideration as may be determined upon and fixed by the Board
of Directors as provided by law.
No holders of shares of Common Stock or Preferred Stock of the
Corporation shall be entitled, as such, as a matter of preemptive or
preferential right, to subscribe for or purchase any part of any new or
additional issue of shares of Common Stock or Preferred Stock, or any
treasury shares of Common Stock or Preferred Stock, or of securities of the
Corporation or of any subsidiary of the Corporation convertible into or
exchangeable for, or carrying rights or options to purchase or subscribe to,
or both, shares of any class whatsoever, whether now or hereafter authorized,
and whether issued for cash, property, services or otherwise.
The Board of Directors of the Corporation is, pursuant to the New
Jersey Business Corporation Law (N.J.S.A. 14A:7-2), authorized to amend this
Restated Certificate of Incorporation of the Corporation so as (a) to divide
the authorized shares of Preferred Stock of the Corporation into series
within such class, (b) to determine the designation and the number of shares
of any such series, and (c) to determine the relative voting, dividend,
conversion, redemption, liquidation and other rights, preferences and
limitations of the authorized shares of Preferred Stock of the Corporation.
A. Creation of Preferred Stock, Series R.
--------------------------------------
A series of Preferred Stock of the Corporation, consisting of
1,500,000 Shares, is hereby created and designated as "Series R
Preferred Stock" (the "Series R Preferred Stock") which series of
Preferred Stock shall have a stated value of $100 per share and the
following rights and preferences:
<PAGE>
(a) Dividends and Distributions.
----------------------------
(1) Subject to the provisions for
adjustment hereinafter set forth, the holders of shares of Series R
Preferred Stock shall be entitled to receive, when, as and if declared
by the Board of Directors out of funds legally available for the
purpose, (i) cash dividends in an amount per share (rounded to the
nearest cent) equal to one hundred (100) times the aggregate per share
amount of all cash dividends declared or paid on the Common Shares,
$1.20 par value per share, of the Corporation (the "Common Shares"),
and (ii) a preferential cash dividend (the "Preferential Dividends"),
if any, on the first business day of February, May, August and
November of each year (each a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the
first issuance of a share or fraction of a share of Series R Preferred
Stock in an amount equal to $1.00 per share of Series R Preferred
Stock reduced (but not to an amount less than zero) by the per
share amount of all cash dividends declared on the Series R Preferred
Stock pursuant to clause (i) of this sentence since the immediately
preceding Quarterly Dividend Payment Date or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of
any share or fraction of a share of Series R Preferred Stock. In
the event the Corporation shall, at any time after the issuance of
any share or fraction of a share of Series R Preferred Stock, make
any distribution on the Common Shares of the Corporation, whether by
way of a dividend or a reclassification of stock, a recapitalization,
reorganization or partial liquidation of the Corporation or otherwise,
which is payable in cash or any debt security, debt instrument, real
or personal property or any other property (other than cash dividends
subject to the immediately preceding sentence, a distribution of
Common Shares or other capital stock of the Corporation or a
distribution of rights or warrants to acquire any such share,
including any debt securityconvertible into or exchangeable
for any such share, at a price less than the Fair Market Value
(as hereinafter defined) of such share), then and in each such event
the Corporation shall simultaneously pay on each then outstanding
share of Series R Preferred Stock of the Corporation a distribution,
in like kind, of one hundred (100) times such distribution paid on a
Common Share (subject to the provisions for adjustment hereinafter set
forth). The dividends and distributions on the Series R Preferred
Stock to which holders thereof are entitled pursuant to clause (i)
of the first sentence of this paragraph and pursuant to the second
sentence of this paragraph are hereinafter referred to as
"Participating Dividends" and the multiple of such cash and non-cash
dividends on the Common Shares applicable to the determination of the
Participating Dividends, which shall be one hundred (100) initially
but shall be adjusted from time to time as hereinafter provided, is
hereinafter referred to as the "Dividend Multiple". In the event the
Corporation shall at any time after August 28, 1989 declare or pay
any dividend or make any distribution on Common Shares payable in
Common Shares or any class or series thereof, or effect a
subdivision or split or a combination, consolidation or reverse split
of the outstanding Common Shares into a greater or lesser number of
Common Shares, then in each such case the Dividend Multiple thereafter
applicable to the determination of the amount of Participating
Dividends which holders of shares of Series R Preferred Stock shall
be entitled to receive shall be the Dividend Multiple applicable
immediately prior to such event multiplied by a fraction the numerator
of which is the number of Common Shares outstanding immediately after
such event and the denominator of which is the number of Common Shares
that were outstanding immediately prior to such event.
<PAGE>
(2) The Corporation shall declare
each Participating Dividend at the same time it declares any cash or
non-cash dividend or distribution on the Common Shares in respect of
which a Participating Dividend is required to be paid. No cash or
non-cash dividend or distribution on the Common Shares in respect of
which a Participating Dividend is required to be paid shall be paid or
set aside for payment on the Common Shares unless a Participating
Dividend in respect of such dividend or distribution on the Common
Shares shall be simultaneously paid, or set aside for payment, on the
Series R Preferred Stock.
(3) Preferential Dividends shall
begin to accrue on outstanding shares of Series R Preferred Stock
commencing with the Quarterly Dividend Payment Date next following the
date of issuance of any shares of Series R Preferred Stock and shall
accrue on and as of such date and each successive Quarterly Dividend
Payment Date thereafter. Accrued but unpaid Preferential Dividends
shall cumulate but shall not bear interest. Preferential Dividends
paid on the shares of Series R Preferred Stock in an amount less than
the total amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding.
(b) Voting Rights. The holders of shares
--------------
of Series R Preferred Stock shall have the following voting rights:
(1) Subject to the provisions for
adjustment hereinafter set forth, each share of Series R Preferred
Stock shall entitle the holder thereof to one hundred (100) votes on
all matters submitted to a vote of the shareholders of the Corporation.
The number of votes which a holder of Series R Preferred Stock is
entitled to cast, as the same may be adjusted from time to time as
hereinafter provided, is hereinafter referred to as the "Vote
Multiple." In the event the Corporation shall at any time after
August 28, 1989 declare or pay any dividend on Common Stock payable
in Common Shares, or effect a subdivision or split or a combination,
consolidation or reverse split of the outstanding Common Shares into
a greater or lesser number of Common Shares, then in each such case
the Vote Multiple thereafter applicable to the determination of the
number of votes per share to which holders of shares of Series R
Preferred Stock shall be entitled after such event shall be the Vote
Multiple immediately prior to such event multiplied by a fraction
the numerator of which is the number of Common Shares outstanding
immediately after such event and the denominator of which is the
number of Common Shares that were outstanding immediately prior to
such event.
(2) Except as otherwise provided
herein, or by law, the Certificate of Incorporation or the By-laws,
the holders of shares of Series R Preferred Stock and the holders
of Common Shares shall vote together as one class on all matters
submitted to a vote of shareholders of the Corporation.
(3) If at the time of any annual
meeting of shareholders of the Corporation for the election of
directors, the Corporation shall have failed to pay the Preferential
Dividends on the shares of the Series R Preferred Stock for six
dividend payment periods, whether or not consecutive, or shall
fail to pay in full such dividends, if any, as may accumulate on
any other series of Preferred Stock for a period of 18 months
(referred to herein as a "Dividend Payment Default"), the number
of directors of the Corporation shall be increased by two and the
holders of the all outstanding series of Preferred Stock in respect
of which such a default in payment of dividends as described
<PAGE>
hereinabove exists, voting as a single class without regard to series,
will be entitled to elect such additional two directors until full
cumulative dividends for all past dividend periods upon all series
of Preferred Stock have been paid or declared and set apart for
payment. If and when the full cumulative dividends on all
series of Preferred Stock for all past dividend payment periods
shall have been paid or declared and set apart for payment, the
holders of Preferred Stock shall be divested of the foregoing special
voting right, subject to revesting in the event of each and every
subsequent Dividend Payment Default. Upon the termination of each
such special voting right, the term of office of each director
elected by the holders of shares of Preferred Stock in respect of
which a default exists in the payment of dividends as described
hereinabove (herein referred to as a "Preferred Director") pursuant
to such special voting right shall forthwith terminate and the number
of directors constituting the Board of Directors shall be reduced by
two. Any Preferred Director may be removed by, and shall not be
removed except by, the vote of the holders of record of the
outstanding shares of Preferred Stock in respect of which such a
default exists, voting together as a single class without regard to
series, at a meeting of the shareholders, or of the holders of shares
of such Preferred Stock, called for the purpose. As long as a
Dividend Payment Default shall continue (A) any vacancy in the
office of a Preferred Director may be filled (except as provided
in the following clause (B)) by an instrument in writing signed by
the remaining Preferred Director and filed with the Corporation and
(B) in the case of the removal of any Preferred Director, the vacancy
may be filled by the vote of the holders of the outstanding shares of
Preferred Stock in respect of which such a default exists, voting
together as a single class without regard to series, at the same
meeting at which such removal shall be voted or a subsequent meeting.
Each director appointed as aforesaid by the remaining Preferred
Director shall be deemed, for all purposes hereof, to be a Preferred
Director.
(4) Except as otherwise set forth
herein or required by law, the Certificate of Incorporation or the
By-laws, holders of Series R Preferred Stock shall have no special
voting rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Common Shares as set
forth herein) for the taking of any corporate action.
(c) Certain Restrictions.
---------------------
(1) Whenever Preferential
Dividends or Participating Dividends are in arrears or the Corporation
shall be in default of payment thereof, thereafter and until all
accrued and unpaid Preferential Dividends and Participating Dividends,
whether or not declared, on shares of Series R Preferred Stock
outstanding shall have been paid or declared and a sum sufficient for
the payment thereof set apart for payment, and in addition to any and
all other rights which any holder of shares of Series R Preferred
Stock may have in such circumstances, the Corporation shall not:
(i) declare or pay or set
apart for payment dividends on, make any other distributions
on, or redeem or purchase or otherwise acquire for
consideration, any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding
up) to the Series R Preferred Stock;
(ii) declare or pay or set
apart for payment dividends on or make any other distributions
on any shares of stock ranking on a parity as to dividends
with the Series R Preferred Stock, unless dividends are paid
ratably on the Series R Preferred Stock and all such parity
stock on which dividends are
<PAGE>
payable or in arrears in
proportion to the total amounts to which the holders of
all such shares are then entitled if the full dividends
accrued thereon were to be paid;
(iii) except as permitted
by subparagraph (iv) of this paragraph (c)(1), redeem or
purchase or otherwise acquire for consideration shares of
any stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series
R Preferred Stock, provided that the Corporation may at any
time redeem, purchase or otherwise acquire shares of any
such parity stock in exchange for shares of any stock of the
Corporation ranking junior (both as to dividends and upon
liquidation, dissolution or winding up) to the Series R
Preferred Stock; or
(iv) purchase or otherwise
acquire for consideration any shares of Series R Preferred
Stock, or any shares of stock ranking on a parity with the
Series R Preferred Stock (either as to dividends or upon
liquidation, dissolution or winding up), except in accordance
with a purchase offer made to all holders of such shares upon
such terms as the Board of Directors, after consideration of
the respective annual dividend rates and other relative rights
and preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(2) The Corporation shall not
permit any Subsidiary (as hereinafter defined) of the Corporation to
purchase or otherwise acquire for consideration any shares of stock of
the Corporation unless the Corporation could, under paragraph (1) of
this Section (c), purchase or otherwise acquire such shares at such
time and in such manner. A "Subsidiary" of the Corporation shall mean
any corporation or other entity of which securities or other ownership
interests having ordinary voting power sufficient to elect a majority
of the board of directors or other persons performing similar
functions are beneficially owned, directly or indirectly, by the
Corporation or by any corporation or other entity that is otherwise
controlled by the Corporation.
(3) The Corporation shall not
issue any shares of Series R Preferred Stock except upon exercise of
rights issued pursuant to that certain Rights Agreement dated as of
August 16, 1989 between the Corporation and First Chicago Trust
Company of New York, as Rights Agent, a copy of which is on file with
the Secretary of the Corporation at its principal executive office and
shall be made available to shareholders of record without charge upon
written request therefor addressed to said Secretary. Notwithstanding
the foregoing sentence, nothing contained in the provisions hereof
shall prohibit or restrict the Corporation from issuing for any
purpose any series of Preferred Stock with rights and privileges
similar to, different from, or greater than, those of the Series R
Preferred Stock.
(d) Reacquired Shares. Any shares of
------------------
Series R Preferred Stock purchased or otherwise acquired by the Corporation
in any manner whatsoever shall be retired and canceled promptly after the
acquisition thereof. All such shares upon their retirement and cancellation
shall become authorized but unissued shares of Preferred Stock, without
designation as to series, and such shares may be reissued as part of a new
series of Preferred Stock to be created by resolution or resolutions of the
Board of Directors.
<PAGE>
(e) Liquidation, Dissolution or Winding Up.
---------------------------------------
Upon the dissolution, liquidation or winding up of the Corporation, no
distribution shall be made (i) to the holders of shares of stock ranking
junior (either as to dividends or upon liquidation, dissolution or winding
up) to the Series R Preferred Stock unless the holders of shares of Series R
Preferred Stock shall have received, subject to adjustment as hereinafter
provided, (1) $1.00 per one-hundredth share ($100 per share) plus an amount
equal to accrued and unpaid dividends and distributions thereon, whether or
not declared, to the date of such payment, or (2) if greater than the amount
specified in clause (i)(1) of this sentence, an amount equal to one hundred
(100) times the aggregate amount to be distributed per share to holders of
Common Shares, as the same may be adjusted as hereinafter provided, and (ii)
to the holders of stock ranking on a parity upon liquidation, dissolution
or winding up with the Series R Preferred Stock, unless simultaneously
therewith distributions are made ratably on the Series R Preferred Stock
and all other shares of such parity stock in proportion to the total amounts
to which the holders of shares of Series R Preferred Stock are entitled under
clause (i)(1) of this sentence and to which the holders of such parity shares
are entitled, in each case upon such liquidation, dissolution or winding up.
The amount to which holders of Series R Preferred Stock may be entitled upon
liquidation, dissolution or winding up of the Corporation pursuant to clause
(i)(2) of the foregoing sentence is hereinafter referred to as the
"Participating Liquidation Amount" and the multiple of the amount to be
distributed to holders of Common Shares upon the liquidation, dissolution
or winding up of the Corporation applicable, pursuant to said clause, to the
determination of the Participating Liquidation Amount, as said multiple may
be adjusted from time to time as hereinafter provided, is hereinafter referred
to as the "Liquidation Multiple". In the event the Corporation shall at
any time after August 28, 1989 declare or pay any dividend on Common Shares
payable in Common Shares or any class or series thereof, or effect a
subdivision or split or a combination, consolidation or reverse split of the
outstanding Common Shares into a greater or lesser number of Common Shares,
then in each such case the Liquidation Multiple thereafter applicable to the
determination of the Participating Liquidation Amount to which holders of
Series R Preferred Stock shall be entitled after such event shall be the
Liquidation Multiple applicable immediately prior to such event multiplied
by a fraction the numerator of which is the number of Common Shares
outstanding immediately after such event and the denominator of which is the
number of Common Shares that were outstanding immediately prior to such event.
The sale, conveyance, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all the property
and assets of the Corporation shall not be deemed a dissolution, liquidation
or winding up of the Corporation for the purposes of this Section (e), nor
shall the merger or consolidation of the Corporation into or with any other
corporation or association or the merger or consolidation of any other
corporation or association into or with the Corporation, be deemed to be a
dissolution, liquidation or winding up of the Corporation for the purposes
of this Section (e).
(f) Certain Reclassifications and Other Events.
-------------------------------------------
(1) In the event that holders of
Common Shares of the Corporation receive after August 28, 1989 in
respect of their Common Shares any share of capital stock of the
Corporation (other than any Common Shares of the Corporation of the
same class and series as such outstanding Common Shares), whether
by way of reclassification, recapitalization, reorganization,
dividend or other distribution or otherwise (a "Transaction"), then
and in each such event the dividend rights, voting rights and rights
upon the liquidation, dissolution or winding up of the Corporation
of the shares of Series R Preferred Stock shall be adjusted so that
after such event the holders of Series R Preferred Stock shall be
entitled, in respect of each share of Series R Preferred Stock held,
in addition to such rights in respect thereof to which such holder
was entitled immediately prior to such adjustment, to (i) such
additional dividends as
<PAGE>
equal the Dividend Multiple in effect
immediately prior to such Transaction multiplied by the additional
dividends which the holder of a Common Share shall be entitled to
receive by virtue of the receipt in the Transaction of such capital
stock; (ii) such additional voting rights as equal the Vote Multiple
in effect immediately prior to such Transaction multiplied by the
additional voting rights which the holder of a Common Share shall
be entitled to receive by virtue of the receipt in the Transaction
of such capital stock; and (iii) such additional distributions upon
liquidation, dissolution or winding up of the Corporation as equal
the Liquidation Multiple in effect immediately prior to such
Transaction multiplied by the additional amount which the holder of
a Common Share shall be entitled to receive upon liquidation,
dissolution or winding up of the Corporation by virtue of the
receipt in the Transaction of such capital stock, as the case may be,
all as provided by the terms of such capital stock.
<PAGE>
(2) In the event that all holders
of Common Shares of the Corporation receive after August 28, 1989 in
respect of their Common Shares any right or warrant to purchase
Common Shares (including as such a right, for all purposes of this
paragraph, any security convertible into or exchangeable for Common
Shares) at a purchase price per share less than the Fair Market
Value of a Common Share on the date of issuance of such right or
warrant, then and in each such event the dividend rights, voting
rights and rights upon the liquidation, dissolution or winding up of
the Corporation of the shares of Series R Preferred Stock shall each
be adjusted so that after such event the Dividend Multiple, the Vote
Multiple and the Liquidation Multiple shall each be the product of
the Dividend Multiple, the Vote Multiple and the Liquidation
Multiple, as the case may be, in effect immediately prior to such
event multiplied by a fraction the numerator of which shall be the
number of Common Shares outstanding immediately before such issuance
of rights or warrants plus the maximum number of Common Shares which
could be acquired upon exercise in full of all such rights or
warrants and the denominator of which shall be the number of Common
Shares outstanding immediately before such issuance of rights or
warrants plus the number of Common Shares which could be purchased,
at the Fair Market Value of the Common Shares at the time of such
issuance, by the maximum aggregate consideration payable upon
exercise in full of all such rights or warrants.
(3) In the event that holders
of Common Shares of the Corporation receive after August 28, 1989 in
respect of their Common Shares any right or warrant to purchase
capital stock of the Corporation (other than Common Shares of any
class or series), including as such a right, for all purposes of this
paragraph, any security convertible into or exchangeable for capital
stock of the Corporation (other than Common Shares of any class or
series), at a purchase price per share less than the Fair Market
Value of such shares of capital stock on the date of issuance of such
right or warrant, then and in each such event the dividend rights,
voting rights and rights upon liquidation, dissolution or winding up
of the Corporation of the shares of Series R Preferred Stock shall
each be adjusted so that after such event each holder of a share of
Series R Preferred Stock shall be entitled, in respect of each share
of Series R Preferred Stock held, in addition to such rights in
respect thereof to which such holder was entitled immediately
prior to such event, to receive (i) such additional dividends as
equal the Dividend Multiple in effect immediately prior to such
event multiplied, first, by the additional dividends to which the
holder of a Common Share shall be entitled upon exercise of such
right or warrant by virtue of the capital stock which could be
acquired upon such exercise and multiplied again by the Discount
Fraction (as hereinafter defined); (ii) such additional voting
rights as equal the Vote Multiple in effect immediately prior to
such event multiplied, first, by the additional voting rights to
which the holder of a Common Share shall be entitled upon exercise
of such right or warrant by virtue of the capital stock which could
be acquired upon such exercise and multiplied again by the Discount
Fraction; and (iii) such additional distributions upon liquidation,
dissolution or winding up of the Corporation as equal the Liquidation
Multiple in effect immediately prior to such event multiplied,
first, by the additional amount which the holder of a Common Share
shall be entitled to receive upon liquidation, dissolution or winding
up of the Corporation upon exercise of such right or warrant by
virtue of the capital stock which could be acquired upon such
exercise and multiplied again by the Discount Fraction. For purposes
of this paragraph, the "Discount Fraction" shall be a fraction the
numerator of which shall be the difference between the Fair Market
Value of a share of the capital stock subject to a right or warrant
distributed to holders of Common Shares of the Corporation as
contemplated by this paragraph immediately after the distribution
thereof
<PAGE>
and the purchase price per share for such share of capital
stock pursuant to such right or warrant and the denominator of which
shall be the Fair Market Value of a share of such capital stock
immediately after the distribution of such right or warrant.
(4) For purposes hereof, the
"Fair Market Value" of a share of capital stock of the Corporation
(including a Common Share) on any date shall be deemed to be the
average of the daily closing price per share thereof over the 30
consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date; provided, however, that, in the event
that such Fair Market Value of any such share of capital stock is
determined during a period which includes any date that is within 30
Trading Days after (i) the ex-dividend date for a dividend or
distribution on stock payable in shares of such stock or securities
convertible into shares of such stock, or (ii) the effective date of
any subdivision, split, combination, consolidation, reverse stock
split or reclassification of such stock, then, and in each such case,
the Fair Market Value shall be appropriately adjusted by the Board of
Directors of the Corporation to take into account ex-dividend or
post-effective date trading. The closing price for any day shall be
the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices,
regular way (in either case, as reported in the applicable
transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange), or, if the
shares are not listed or admitted to trading on the New York Stock
Exchange, as reported in the applicable transaction reporting system
with respect to securities listed on the principal national
securities exchange on which the shares are listed or admitted to
trading or, if the shares are not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not
so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or
such other system then in use, or if on any such date the
shares are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market
maker making a market in the shares selected by the Board of
Directors of the Corporation. The term "Trading Day" shall mean a
day on which the principal national securities exchange on which the
shares are listed or admitted to trading is open for the transaction
of business or, if the shares are not listed or admitted to trading
on any national securities exchange, on which the New York Stock
Exchange or such other national securities exchange as may be
selected by the Board of Directors of the Corporation is open. If
the shares are not publicly held or not so listed or traded on any
day within the period of 30 Trading Days applicable to the
determination of Fair Market Value thereof as aforesaid, "Fair Market
Value" shall mean the fair market value thereof per share as
determined in good faith by the Board of Directors of the
Corporation. In either case referred to in the foregoing sentence,
the determination of Fair Market Value shall be described in a
statement filed with the Secretary of the Corporation.
(g) Consolidation, Merger, etc. In case
---------------------------
the Corporation shall enter into any consolidation, merger, combination or
other transaction in which the Common Shares are exchanged for or changed
into other stock or securities, cash and/or any other property, then in any
such case each outstanding share of Series R Preferred Stock shall at the
same time be similarly exchanged for or changed into the aggregate amount
of stock, securities, cash and/or other property (payable in like kind), as
the case may be, for which or into which each Common Share is changed or
exchanged multiplied by the highest of the Dividend Multiple, the Vote
Multiple or the Liquidation Multiple in effect immediately prior to such
event.
<PAGE>
(h) Effective Time of Adjustments.
------------------------------
(1) Adjustments to the Series R
Preferred Stock required by the provisions hereof shall be effective
as of the time at which the event requiring such adjustments occurs.
(2) The Corporation shall give
prompt written notice to each holder of a share of Series R Preferred
Stock of the effect of any adjustment to the voting rights, dividend
rights or rights upon liquidation, dissolution or winding up of the
Corporation of such shares required by the provisions hereof.
Notwithstanding the foregoing sentence, the failure of the Corporation
to give such notice shall not affect the validity of or the force or
effect of or the requirement for such adjustment.
(i) No Redemption. The shares of Series
--------------
R Preferred Stock shall not be redeemable at the option of the Corporation or
any holder thereof. Notwithstanding the foregoing sentence of this Section,
the Corporation may acquire shares of Series R Preferred Stock in any other
manner permitted by law, the provisions hereof and the Certificate of
Incorporation of the Corporation.
(j) Ranking. Unless otherwise provided
--------
in the Certificate of Incorporation of the Corporation or a Certificate of
Amendment relating to a subsequent series of preferred stock of the
Corporation, the Series R Preferred Stock shall rank junior to all other
series of the Corporation's Preferred Stock as to the payment of dividends
and the distribution of assets on liquidation, dissolution or winding up and
senior to the Common Shares.
(k) Conversion or Exchange. The holders
-----------------------
of shares of Series R Preferred Stock shall not have any rights to convert
such shares into or exchange such shares for Common Shares of the Corporation
or any other stock of the Corporation.
(l) Preemptive Rights. Shares of the
------------------
Series R Preferred Stock are not entitled to any preemptive rights.
(m) Amendment. Unless the vote or
----------
consent of the holders of a greater number of shares shall then be required
by law, the consent of the holders of at least 66-2/3% of all of the shares
of this Series R Preferred Stock at the time outstanding given in person or
by proxy, either in writing or by a vote at a meeting called for the purpose,
on which matter the holders of shares of this Series R Preferred Stock shall
vote together as a separate class, shall be necessary to authorize, effect or
validate any amendment, alteration or repeal of any of the provisions of the
Restated Certificate of Incorporation of the Corporation or of any
certificate amendatory or supplemental thereto which amendment, alteration
or repeal would, if effected, adversely affect the preferences, rights,
powers or privileges of this Series R Preferred Stock.
4. The location of the current registered office of the
Corporation in this State is 301 Carnegie Center, P. O. Box 2066, Princeton,
New Jersey 08543-2066, and the name of the current agent therein and in
charge thereof upon whom process against this Corporation may be served is
Richard F. Ober, Jr.
<PAGE>
5. The current Board of Directors consists of eighteen persons
whose names and addresses are as follows:
S. RODGERS BENJAMIN Chairman
Flemington Fur Company
8 Spring Street
Flemington, NJ 08822
ROBERT L. BOYLE Publisher Emeritus
of the Dispatch
7 Orchard Lane
Rumson, NJ 07760
JAMES C. BRADY, JR. Partner
Mill House Associates, Inc.
Box 351
Gladstone, NJ 07934
JOHN G. COLLINS Vice Chairman
Summit Bancorp.
301 Carnegie Center
P.O. Box 2066
Princeton, NJ 08543-2066
ROBERT G. COX President
Summit Bancorp.
301 Carnegie Center
P.O. Box 2066
Princeton, NJ 08543-2066
T. J. DERMOT DUNPHY President & CEO
Sealed Air Corporation
Park 80 Plaza East
Saddle Brook, NJ 07662
ANNE EVANS ESTABROOK Owner
Elberon Development Co.
P.O. Box 677
Kenilworth, NJ 07033-0677
ELINOR J. FERDON Professional Volunteer
Litchfield Way
P.O. Box 255
Alpine, NJ 07620
FRED G. HARVEY Vice President
E. & E. Corp.
225 West 2nd Street
Bethlehem, PA 18015
<PAGE>
JOHN R. HOWELL Chairman
First Valley Corporation
One Bethlehem Plaza
Bethlehem, PA 18018
FRANCIS J. MERTZ President
Fairleigh Dickinson University
1000 River Road
Teaneck, NJ 07666
GEORGE L. MILES, JR. President & CEO
WQED Pittsburgh
4802 Fifth Avenue
Pittsburgh, PA 15213
HENRY S. PATTERSON II President
E'town Corporation
P.O. Box 788
Westfield, NJ 07091
T. JOSEPH SEMROD Chairman and CEO
Summit Bancorp.
301 Carnegie Center
P.O. Box 2066
Princeton, NJ 08543-2066
RAYMOND SILVERSTEIN Consultant
Alloy, Silverstein, Shapiro, Adams
Mulford & Co.
900 North Kings Highway
Cherry Hill, NJ 08034
ORIN R. SMITH Chairman and CEO
Engelhard Corporation
101 Wood Avenue
Iselin, NJ 08830
JOSEPH M. TABAK President and CEO
JPC Enterprises, Inc.
30 South Adelaide Avenue
Penthouse F
Highland Park, NJ 08904
DOUGLAS G. WATSON President
Pharmaceuticals Division
Ciba-Geigy Corporation
556 Morris Avenue
Summit, NJ 07901
<PAGE>
The Board of Directors shall consist of not less than five (5)
persons and not more than forty (40) persons, as may be determined from time
to time in the discretion of the Board of Directors.
Except as otherwise provided by statute, by this Restated
Certificate of Incorporation as the same may be amended from time to time,
or by By-Laws as the same may be amended from time to time, all corporate
powers may be exercised by the Board of Directors. Without limiting the
foregoing, the Board of Directors shall have power, without shareholders'
action:
A. To authorize and cause to be executed and/or
issued mortgages, liens, bonds, debentures or other obligations
including bonds, debentures or other obligations convertible into,
or exchangeable for stock of any class, or bearing, warrants or other
evidences of optional rights to purchase or subscribe to, or both,
stock of any class, upon the terms, in the manner and under the
condition fixed by resolution of the Board of Directors prior to the
issue thereof, secured or not secured, upon the real and personal or
other property of the Corporation, or any part thereof, provided that
a majority of the whole Board of Directors concur therein by
resolution or in writing.
B. With the sanction of a resolution passed by
the holders of two-thirds of the shares issued and outstanding at
any annual or special meeting of shareholders duly called for that
purpose, to sell, assign, transfer or otherwise dispose of all the
rights, franchises and property of the Corporation as an entirety;
and any such sale may be wholly or partly in consideration of the
bonds, mortgages, debenture obligations, securities or evidences of
indebtedness, or shares of the capital stock, of any corporation or
corporations of any state, territory or foreign country, formed or
to be formed for the purpose of purchasing the same.
C. To loan money to, or guarantee an obligation
of, or otherwise assist any officer or other employee of the
Corporation or of any subsidiary, including an officer or employee
who is also a director of the Corporation, whenever, in the judgment
of the Board of Directors, such loan, guarantee, or assistance may
reasonably be expected to benefit the Corporation.
D. To designate three (3) or more of their number
to constitute an executive committee, which committee shall for the
time being and subject to the control and direction of the Board of
Directors have and exercise all the powers of the Board of Directors
which may be lawfully delegated for the management of the business
and affairs of the Corporation, and shall have power to authorize the
seal of the Corporation to be affixed to all papers which may require
it.
6. Except to the extent prohibited by law, no Director or officer
of the Corporation shall be personally liable to the Corporation or its
shareholders for damages for breach of any duty owed to the Corporation or
its shareholders, provided that a Director or officer shall not be relieved
from liability for any breach of duty based upon an act or omission (a) in
breach of such person's duty of loyalty to the Corporation or its
shareholders, (b) not in good faith or involving a knowing violation of law
or (c) resulting in receipt by such person of an improper personal benefit.
Neither the amendment or repeal of this Article 7, nor the adoption of any
provision of this Restated Certificate of Incorporation inconsistent with
this Article 7, shall eliminate or reduce the effect of this Article 7 in
respect of any matter which occurred, or any cause of action, suit or claim
which but for this Article 7 would have accrued or arisen, prior to such
amendment, repeal or adoption.
7. Except as may be otherwise provided in respect of directors
to be elected by the holders of Preferred Stock, or any series thereof, by
the terms of any resolution or resolutions of the Board of Directors
providing for any series of Preferred Stock adopted pursuant to the
provisions of Article 3 hereof, the Board of Directors shall be classified,
with respect to the time for which directors shall hold office, into three
classes, as determined by the Board of Directors, each as nearly equal in
number as possible. At the annual meeting of the shareholders of the
Corporation at which this Article 8 is adopted, the first such class of
directors shall be elected for a term expiring upon the next following
annual meeting of shareholders and upon the election and qualification
<PAGE>
of their respective successors, the second such class of directors shall be
elected for a term expiring upon the second following annual meeting of
shareholders and upon the election and qualification of their respective
successors, and the third such class of directors shall be elected
for a term expiring upon the third following annual meeting of shareholders
and upon the election and qualification of their respective successors. At
each annual meeting of shareholders following the annual meeting at which
this Article 8 is adopted, directors of the class of directors whose term
expires at such annual meeting shall be elected for a term expiring upon the
third following annual meeting of shareholders and upon the election and
qualification of their respective successors. Whenever the number of
directors constituting the whole Board of Directors is changed, except as
may be otherwise provided in respect of directors to be elected by the
holders of Preferred Stock, or any series thereof, by the terms of any
resolution or resolutions of the Board of Directors providing for any series
of Preferred Stock adopted pursuant to the provisions of Article 3 hereof,
any increase or decrease in the number of directors shall be apportioned
by the Board of Directors among the three classes so as to maintain all the
classes as equal in number as possible, and each such director shall hold
office until the next annual meeting of shareholders and until such
director's successor shall have been elected and qualified; provided,
however, that no decrease in the number of directors shall effect the
then-current term of any director then in office.
A director may be disqualified from office as required by
law or under any applicable rules, regulations or orders of any federal or
state regulatory authority or by provisions of general applicability in the
Restated Certificate of Incorporation or By-Laws adopted prior to such
director's election.
Any action by the Board of Directors or shareholders creating
one or more vacancies on the Board of Directors by increasing the authorized
number of directors shall be effective only if such action has received the
affirmative vote, in the case of the Board of Directors, of eighty percent
(80%) or more of the directors then holding office or, in the case of the
shareholders, of eighty percent (80%) or more of the combined voting power
of the then outstanding shares of all classes and series of stock of the
Corporation entitled to vote generally in the election of directors, voting
together as a single class.
8. Subject to the rights of the holders of shares of any series
of Preferred Stock or any other class of stock or series thereof having a
preference over the Common Stock as to dividends or upon liquidation, any
action required or permitted to be taken by the shareholders of the
Corporation must be effected exclusively either at a duly called annual or
special meeting of shareholders of the Corporation or by the unanimous (but
no less than unanimous) written consent of the shareholders.
9. In addition to any requirements of law and any other
provision of the Restated Certificate of Incorporation of the Corporation or
any resolution or resolutions of the Board of Directors providing for any
series of Preferred Stock adopted pursuant to Article 3 hereof (and
notwithstanding the fact that approval by a lesser vote may be permitted by
law, any other Article, or other provisions hereof or any such resolution or
resolutions), the affirmative vote of the holders of eighty percent (80%) or
more of the combined voting power of the then outstanding shares of all
classes and series of stock of the Corporation entitled to vote generally in
the election of directors, voting together as a single class, shall be
required to amend, alter or repeal, or adopted any provision or take action
inconsistent with, this Article 10 or Articles 8 or 9 hereof.
<PAGE>
CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
SUMMIT BANCORP.
_______________
To: The Secretary of State
State of New Jersey
Pursuant to the provisions of Section 14A:7-15.1(3) of the New Jersey
Business Corporation Act, the undersigned corporation hereby executes the
following Certificate of Amendment to its Restated Certificate of
Incorporation dated August 8, 1997 (the "Certificate of Incorporation"):
1. The name of the corporation is Summit Bancorp. (the "Corporation").
2. The Board of Directors of the Corporation duly adopted a resolution
approving of the division of the shares of the Corporation at a regular
meeting of the Board of Directors held on August 20, 1997.
3. The Amendment to the Certificate of Incorporation set forth in Section
Five hereof shall not adversely affect the rights or preferences of the
holders of outstanding shares of any class or series and will not result in
the percentage of authorized shares that remains unissued after the share
division exceeding the percentage of authorized shares that was unissued
before the share division.
4. (a) The Two Hundred Sixty Million (260,000,000) shares of the Common
Stock, $1.20 par value per share, of the Corporation presently authorized
are to be divided into Three Hundred Ninety Million (390,000,000) of Common
Stock, $0.80 par value per share.
(b) The Four Million (4,000,000) shares of the Preferred Stock, without
par value, of the Corporation presently authorized are to be divided into
Six Million (6,000,000) shares of the Preferred Stock, without par value.
5. The following amendment to the Certificate of Incorporation set forth
below was approved by the Board of Directors of the Corporation on August 20,
1997 in connection with the three-for- two division of the shares of the
capital stock of the Corporation authorized, issued and outstanding at the
close of business September 3, 1997, payable on September 24, 1997 to
shareholders of record
<PAGE>
at the close of business on September 3, 1997 and the
change in the par value of all authorized common stock of the Corporation
from $1.20 per share to $0.80 per share:
3. The total number of shares of capital stock authorized and which
may be issued by this Corporation is Three Hundred Ninety-Six Million
(396,000,000) shares, of which Three Hundred Ninety Million (390,000,000)
shares of Eighty Cents ($0.80) par value each shall be designated as Common
Stock, and of which Six Million (6,000,000) shares without par value shall
be designated as Preferred Stock. All or any part of such authorized
Common Stock and Preferred Stock may be issued by the Corporation from
time to time and for such consideration as may be determined upon and
fixed by the Board of Directors as provided by law.
6. The dividend of shares set forth herein is to become payable and the
amendment to the Certificate of Incorporation set forth herein is to become
effective at 11:59 p.m., September 24, 1997.
Dated this 16th day of September, 1997.
By:/s/RICHARD F. OBER, JR.
_______________________________
Richard F. Ober, Jr.
Executive Vice President
CERTIFICATE OF ADJUSTMENT
TO: FIRST CHICAGO TRUST COMPANY OF NEW YORK AS RIGHTS AGENT UNDER
RIGHTS AGREEMENT DATED AS OF AUGUST 16, 1989 WITH UJB FINANCIAL
CORP. (NOW SUMMIT BANCORP) AND TRANSFER AGENT OF SERIES R
PREFERRED STOCK OF SUMMIT BANCORP
30 West Broadway
New York, NY 10007
ATTN: Tenders and Exchange Administration
This certificate is delivered pursuant to Section 12 of the Rights
Agreement between UJB Financial Corp. (now Summit Bancorp) and First
Chicago Trust Company of New York dated as of August 16, 1989.
Any capitalized terms not defined herein shall have the same meanings
as in such Rights Agreement.
On August 20, 1997, the Board of Directors declared a 3 for 2 stock
split on the Common Stock, par value $1.20 of Summit Bancorp, with a
record date of September 3, 1997 and a distribution date of September 24,
1997. Upon such distribution:
The Adjusted Exercise Price of each right shall be $60.00.
The Adjusted Number of Shares which may be purchased upon the
exercise of a right shall be 1/150 of a share of Series R
Preferred Stock without par value (stated value $100).
Dated: August 20, 1997 /s/ Richard F. Ober, Jr.
------------------------
Richard F. Ober, Jr.
Executive Vice President & Secretary
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE SEPTEMBER 30, 1997 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-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 1,117,347
<INT-BEARING-DEPOSITS> 4,309
<FED-FUNDS-SOLD> 14,359
<TRADING-ASSETS> 29,808
<INVESTMENTS-HELD-FOR-SALE> 4,596,923
<INVESTMENTS-CARRYING> 4,078,729
<INVESTMENTS-MARKET> 4,061,421
<LOANS> 18,630,663
<ALLOWANCE> 294,114
<TOTAL-ASSETS> 29,091,106
<DEPOSITS> 21,938,028
<SHORT-TERM> 3,256,136
<LIABILITIES-OTHER> 377,886
<LONG-TERM> 1,001,617
0
0
<COMMON> 140,588
<OTHER-SE> 2,376,851
<TOTAL-LIABILITIES-AND-EQUITY> 29,091,106
<INTEREST-LOAN> 1,121,321
<INTEREST-INVEST> 410,226
<INTEREST-OTHER> 4,099
<INTEREST-TOTAL> 1,535,646
<INTEREST-DEPOSIT> 508,614
<INTEREST-EXPENSE> 681,034
<INTEREST-INCOME-NET> 854,612
<LOAN-LOSSES> 45,100
<SECURITIES-GAINS> 3,471
<EXPENSE-OTHER> 625,561
<INCOME-PRETAX> 399,051
<INCOME-PRE-EXTRAORDINARY> 258,752
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 258,752
<EPS-PRIMARY> 1.48
<EPS-DILUTED> 1.48
<YIELD-ACTUAL> 4.28
<LOANS-NON> 88,957
<LOANS-PAST> 67,496
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 19,174
<ALLOWANCE-OPEN> 290,605
<CHARGE-OFFS> 64,846
<RECOVERIES> 23,255
<ALLOWANCE-CLOSE> 294,114
<ALLOWANCE-DOMESTIC> 138,581
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 155,533
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
ON AUGUST 1, 1997, SUMMIT BANCORP. COMPLETED ITS ACQUISITION OF
COLLECTIVE BANCORP, INC. THIS ACQUISITION WAS ACCOUNTED FOR AS
A POOLING OF INTEREST AND THE SUMMARY FINANCIAL INFORMATION HAS
BEEN RESTATED.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 1,153,517
<INT-BEARING-DEPOSITS> 6,879
<FED-FUNDS-SOLD> 143,497
<TRADING-ASSETS> 43,407
<INVESTMENTS-HELD-FOR-SALE> 3,513,390
<INVESTMENTS-CARRYING> 5,138,227
<INVESTMENTS-MARKET> 5,072,035
<LOANS> 18,597,663
<ALLOWANCE> 294,066
<TOTAL-ASSETS> 29,224,687
<DEPOSITS> 22,167,140
<SHORT-TERM> 3,332,234
<LIABILITIES-OTHER> 330,485
<LONG-TERM> 910,766
0
0
<COMMON> 140,291
<OTHER-SE> 2,343,771
<TOTAL-LIABILITIES-AND-EQUITY> 29,224,687
<INTEREST-LOAN> 741,321
<INTEREST-INVEST> 273,836
<INTEREST-OTHER> 2,988
<INTEREST-TOTAL> 1,018,145
<INTEREST-DEPOSIT> 338,221
<INTEREST-EXPENSE> 451,315
<INTEREST-INCOME-NET> 566,830
<LOAN-LOSSES> 30,600
<SECURITIES-GAINS> 2,206
<EXPENSE-OTHER> 388,275
<INCOME-PRETAX> 288,883
<INCOME-PRE-EXTRAORDINARY> 187,540
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 187,540
<EPS-PRIMARY> 1.07
<EPS-DILUTED> 1.07
<YIELD-ACTUAL> 4.28
<LOANS-NON> 110,177
<LOANS-PAST> 71,510
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 18,745
<ALLOWANCE-OPEN> 290,605
<CHARGE-OFFS> 42,782
<RECOVERIES> 15,643
<ALLOWANCE-CLOSE> 294,066
<ALLOWANCE-DOMESTIC> 147,366
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 146,700
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
ON AUGUST 1, 1997, SUMMIT BANCORP. COMPLETED ITS ACQUISITION OF
COLLECTIVE BANCORP, INC. THIS ACQUISITION WAS ACCOUNTED FOR AS
A POOLING OF INTEREST AND THE SUMMARY FINANCIAL INFORMATION HAS
BEEN RESTATED.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 1,034,857
<INT-BEARING-DEPOSITS> 13,457
<FED-FUNDS-SOLD> 243,395
<TRADING-ASSETS> 33,806
<INVESTMENTS-HELD-FOR-SALE> 3,366,770
<INVESTMENTS-CARRYING> 5,196,227
<INVESTMENTS-MARKET> 5,015,456
<LOANS> 18,376,154
<ALLOWANCE> 290,471
<TOTAL-ASSETS> 28,907,850
<DEPOSITS> 22,330,582
<SHORT-TERM> 2,948,117
<LIABILITIES-OTHER> 395,392
<LONG-TERM> 835,744
0
0
<COMMON> 139,925
<OTHER-SE> 2,258,090
<TOTAL-LIABILITIES-AND-EQUITY> 28,907,850
<INTEREST-LOAN> 365,230
<INTEREST-INVEST> 134,658
<INTEREST-OTHER> 1,426
<INTEREST-TOTAL> 501,314
<INTEREST-DEPOSIT> 168,314
<INTEREST-EXPENSE> 221,299
<INTEREST-INCOME-NET> 280,015
<LOAN-LOSSES> 15,510
<SECURITIES-GAINS> 1,431
<EXPENSE-OTHER> 206,942
<INCOME-PRETAX> 126,963
<INCOME-PRE-EXTRAORDINARY> 82,482
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 82,482
<EPS-PRIMARY> 0.47
<EPS-DILUTED> 0.47
<YIELD-ACTUAL> 4.29
<LOANS-NON> 125,583
<LOANS-PAST> 76,429
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 7,502
<ALLOWANCE-OPEN> 290,605
<CHARGE-OFFS> 21,658
<RECOVERIES> 6,014
<ALLOWANCE-CLOSE> 290,471
<ALLOWANCE-DOMESTIC> 156,350
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 134,121
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
ON AUGUST 1, 1997, SUMMIT BANCORP. COMPLETED ITS ACQUISITION OF
COLLECTIVE BANCORP, INC. THIS ACQUISITION WAS ACCOUNTED FOR AS
A POOLING OF INTEREST AND THE SUMMARY FINANCIAL INFORMATION HAS
BEEN RESTATED.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 1,407,284
<INT-BEARING-DEPOSITS> 9,136
<FED-FUNDS-SOLD> 4,052
<TRADING-ASSETS> 20,049
<INVESTMENTS-HELD-FOR-SALE> 2,643,827
<INVESTMENTS-CARRYING> 5,492,568
<INVESTMENTS-MARKET> 5,369,211
<LOANS> 17,277,746
<ALLOWANCE> 284,223
<TOTAL-ASSETS> 27,405,016
<DEPOSITS> 21,453,638
<SHORT-TERM> 3,013,320
<LIABILITIES-OTHER> 345,896
<LONG-TERM> 397,862
0
42,620
<COMMON> 134,527
<OTHER-SE> 2,017,153
<TOTAL-LIABILITIES-AND-EQUITY> 27,405,016
<INTEREST-LOAN> 1,034,325
<INTEREST-INVEST> 387,998
<INTEREST-OTHER> 4,267
<INTEREST-TOTAL> 1,426,590
<INTEREST-DEPOSIT> 494,484
<INTEREST-EXPENSE> 639,119
<INTEREST-INCOME-NET> 787,471
<LOAN-LOSSES> 47,599
<SECURITIES-GAINS> 1,268
<EXPENSE-OTHER> 643,459
<INCOME-PRETAX> 287,936
<INCOME-PRE-EXTRAORDINARY> 186,944
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 186,944
<EPS-PRIMARY> 1.11
<EPS-DILUTED> 1.11
<YIELD-ACTUAL> 4.21
<LOANS-NON> 167,466
<LOANS-PAST> 85,090
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 20,631
<ALLOWANCE-OPEN> 299,502
<CHARGE-OFFS> 80,340
<RECOVERIES> 17,462
<ALLOWANCE-CLOSE> 284,223
<ALLOWANCE-DOMESTIC> 156,377
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 127,846
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
ON AUGUST 1, 1997, SUMMIT BANCORP. COMPLETED ITS ACQUISITION OF
COLLECTIVE BANCORP, INC. THIS ACQUISITION WAS ACCOUNTED FOR AS
A POOLING OF INTEREST AND THE SUMMARY FINANCIAL INFORMATION HAS
BEEN RESTATED.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 1,327,507
<INT-BEARING-DEPOSITS> 24,825
<FED-FUNDS-SOLD> 114,789
<TRADING-ASSETS> 26,376
<INVESTMENTS-HELD-FOR-SALE> 2,872,051
<INVESTMENTS-CARRYING> 5,422,093
<INVESTMENTS-MARKET> 5,321,724
<LOANS> 17,386,059
<ALLOWANCE> 280,611
<TOTAL-ASSETS> 27,767,271
<DEPOSITS> 21,629,531
<SHORT-TERM> 2,806,367
<LIABILITIES-OTHER> 344,742
<LONG-TERM> 695,793
0
0
<COMMON> 134,637
<OTHER-SE> 2,156,201
<TOTAL-LIABILITIES-AND-EQUITY> 27,767,271
<INTEREST-LOAN> 1,383,150
<INTEREST-INVEST> 517,584
<INTEREST-OTHER> 6,262
<INTEREST-TOTAL> 1,906,996
<INTEREST-DEPOSIT> 659,034
<INTEREST-EXPENSE> 853,707
<INTEREST-INCOME-NET> 1,053,289
<LOAN-LOSSES> 64,034
<SECURITIES-GAINS> 3,862
<EXPENSE-OTHER> 815,591
<INCOME-PRETAX> 433,706
<INCOME-PRE-EXTRAORDINARY> 283,675
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 283,675
<EPS-PRIMARY> 1.69
<EPS-DILUTED> 1.69
<YIELD-ACTUAL> 4.21
<LOANS-NON> 139,130
<LOANS-PAST> 79,013
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 11,048
<ALLOWANCE-OPEN> 299,502
<CHARGE-OFFS> 108,307
<RECOVERIES> 23,231
<ALLOWANCE-CLOSE> 280,611
<ALLOWANCE-DOMESTIC> 147,387
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 133,224
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
ON AUGUST 1, 1997, SUMMIT BANCORP. COMPLETED ITS ACQUISITION OF
COLLECTIVE BANCORP, INC. THIS ACQUISITION WAS ACCOUNTED FOR AS
A POOLING OF INTEREST AND THE SUMMARY FINANCIAL INFORMATION HAS
BEEN RESTATED.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 1,403,974
<INT-BEARING-DEPOSITS> 18,329
<FED-FUNDS-SOLD> 165,367
<TRADING-ASSETS> 41,965
<INVESTMENTS-HELD-FOR-SALE> 2,521,700
<INVESTMENTS-CARRYING> 5,463,303
<INVESTMENTS-MARKET> 5,385,830
<LOANS> 16,413,221
<ALLOWANCE> 293,160
<TOTAL-ASSETS> 26,647,452
<DEPOSITS> 21,232,926
<SHORT-TERM> 2,096,184
<LIABILITIES-OTHER> 361,480
<LONG-TERM> 826,754
0
42,620
<COMMON> 128,029
<OTHER-SE> 1,959,459
<TOTAL-LIABILITIES-AND-EQUITY> 26,647,452
<INTEREST-LOAN> 1,297,168
<INTEREST-INVEST> 526,997
<INTEREST-OTHER> 7,769
<INTEREST-TOTAL> 1,831,934
<INTEREST-DEPOSIT> 630,303
<INTEREST-EXPENSE> 822,232
<INTEREST-INCOME-NET> 1,009,702
<LOAN-LOSSES> 72,090
<SECURITIES-GAINS> 8,595
<EXPENSE-OTHER> 707,839
<INCOME-PRETAX> 467,405
<INCOME-PRE-EXTRAORDINARY> 300,412
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 300,412
<EPS-PRIMARY> 1.89
<EPS-DILUTED> 1.89
<YIELD-ACTUAL> 4.29
<LOANS-NON> 193,561
<LOANS-PAST> 60,463
<LOANS-TROUBLED> 199
<LOANS-PROBLEM> 18,708
<ALLOWANCE-OPEN> 330,172
<CHARGE-OFFS> 130,492
<RECOVERIES> 22,095
<ALLOWANCE-CLOSE> 293,160
<ALLOWANCE-DOMESTIC> 207,302
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 85,858
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
ON AUGUST 1, 1997, SUMMIT BANCORP. COMPLETED ITS ACQUISITION OF
COLLECTIVE BANCORP, INC. THIS ACQUISITION WAS ACCOUNTED FOR AS
A POOLING OF INTEREST AND THE SUMMARY FINANCIAL INFORMATION HAS
BEEN RESTATED.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 1,254,506
<INT-BEARING-DEPOSITS> 18,822
<FED-FUNDS-SOLD> 56,600
<TRADING-ASSETS> 34,870
<INVESTMENTS-HELD-FOR-SALE> 1,339,725
<INVESTMENTS-CARRYING> 7,071,341
<INVESTMENTS-MARKET> 6,672,271
<LOANS> 15,048,579
<ALLOWANCE> 323,336
<TOTAL-ASSETS> 25,484,073
<DEPOSITS> 19,981,071
<SHORT-TERM> 2,451,154
<LIABILITIES-OTHER> 320,667
<LONG-TERM> 917,736
0
50,008
<COMMON> 123,770
<OTHER-SE> 1,639,667
<TOTAL-LIABILITIES-AND-EQUITY> 25,484,073
<INTEREST-LOAN> 1,080,046
<INTEREST-INVEST> 487,852
<INTEREST-OTHER> 4,472
<INTEREST-TOTAL> 1,572,370
<INTEREST-DEPOSIT> 464,033
<INTEREST-EXPENSE> 599,732
<INTEREST-INCOME-NET> 972,638
<LOAN-LOSSES> 94,347
<SECURITIES-GAINS> 4,954
<EXPENSE-OTHER> 758,355
<INCOME-PRETAX> 337,662
<INCOME-PRE-EXTRAORDINARY> 215,648
<EXTRAORDINARY> 0
<CHANGES> (1,731)
<NET-INCOME> 213,917
<EPS-PRIMARY> 1.37
<EPS-DILUTED> 1.37
<YIELD-ACTUAL> 4.42
<LOANS-NON> 206,943
<LOANS-PAST> 59,780
<LOANS-TROUBLED> 2,920
<LOANS-PROBLEM> 34,614
<ALLOWANCE-OPEN> 363,229
<CHARGE-OFFS> 119,546
<RECOVERIES> 22,258
<ALLOWANCE-CLOSE> 323,336
<ALLOWANCE-DOMESTIC> 217,476
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 105,860
</TABLE>
