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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 15, 1998
HUBCO, INC.
(Exact name of registrant as specified in its charter)
New Jersey
(State or other jurisdiction of incorporation)
1-10699 22-2405746
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(Commission File Number) (IRS Employer Identification No.)
1000 MacArthur Boulevard
Mahwah, New Jersey 07430
(Address of principal executive offices)
(201) 236-2600
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(Registrant's telephone number, including area code)
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<PAGE>
Item 5. Other Events
On July 15, 1998, HUBCO, Inc. ("HUBCO") reported earnings for the
second quarter. Net income for the second quarter was $0.3 million compared to
$14.2 million in the second quarter of 1997, including merger related costs.
Income in the second quarter was reduced by merger related and restructuring
charges of $25.0 million, pre-tax, which relate primarily to the consummation of
the Poughkeepsie Financial Corp. and MSB Bancorp, Inc. acquisitions which were
accounted for on a pooling of interests basis of accounting. Excluding such
charges, HUBCO reported second quarter core earnings of $0.57 per share on a
diluted basis ($16.6 million) an increase of 24% from $0.46 per share ($14.2
million) reported for the same period in 1997. Return on average equity and
return on average assets were 1.40% and 22.4%, respectively, for the second
quarter, excluding restructuring charges, compared to 1.20% and 17.46%,
respectively, for the same period in 1997.
HUBCO's total assets at June 30, 1998 were $5.11 billion. Loans totaled
$2.82 billion, deposits were $3.87 billion and stockholders' equity was $273.3
million.
HUBCO, Inc. is the bank holding company for Hudson United Bank which
operates in Northern New Jersey, Lafayette American Bank which operates in
Connecticut and the Bank of the Hudson which is in New York state. In addition,
HUBCO has pending three merger agreements with Community Financial Holding
Corporation, Westmont, NJ, Dime Financial Corporation of Wallingford, CT., and
IBS Financial Corp., Cherry Hill, NJ. The Company also has pending the purchase
of two additional branches in New York from First Union Corporation. After
closing all pending acquisitions, which are still subject to certain conditions,
HUBCO, Inc. will have total assets of approximately $6.5 billion.
A copy of HUBCO's press release is attached to this Form 8-K as an
Exhibit and is incorporated herein by reference.
Item 7. Exhibits
Exhibit 99 Press Release dated July 15, 1998
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HUBCO, INC.
JOSEPH F. HURLEY
Dated: July 14, 1998 By:-------------------------------------
Joseph F. Hurley
Chief Financial Officer
<PAGE>
INDEX TO EXHIBIT
Exhibit No. Description
- ---------- -----------
99 Press Release dated July 15, 1998
HUBCO, INC.
1000 MacArthur Blvd.
Mahwah, NJ 07430
(NASDAQ:HUBC)
AT THE COMPANY: AT THE FINANCIAL RELATIONS
BOARD,INC:
Kenneth T. Neilson, Chairman, Kerry Thalheim/Regina Lenihan
President & CEO (201) 236-2631 675 Third Avenue
Joseph F. Hurley, Executive New York, NY 10017
Vice President & CFO (212) 661-8030
(201) 236-6141
FOR IMMEDIATE RELEASE
July 15, 1998
HUBCO, Inc. Reports a 24% Increase in Core Earnings
Mahwah, New Jersey, July 15, 1998--HUBCO, Inc. (NASDAQ:HUBC), today
reported second quarter core earnings of $0.57 per share on a diluted basis
($16.6 million), a 24% increase from $0.46 per share ($14.2 million) reported
for the same period in 1997. Core earnings excludes $25.0 million pre-tax of
merger related and restructuring charges ("one time charges"). During the
quarter, HUBCO consummated the acquisitions of Poughkeepsie Financial Corp. and
MSB Bancorp Inc. which were accounted for on a pooling of interests basis of
accounting. The results also reflect the acquisition of twenty one branches
located in New Jersey and Connecticut from First Union National Bank under the
purchase method of accounting from the closing of that transaction on June 24,
1998. Return on Average Assets was 1.40% and Return on Average Equity was 22.15%
for the quarter excluding one time charges, compared to 1.20% and 17.46% for the
similar 1997 period, respectively. Including one time charges, second quarter
diluted earnings per share were $0.01 per share ($0.3 million) compared to $0.46
($14.2 million) in 1997.
For the six months ended June 30, 1998, diluted earnings per share
excluding $28.1 million pre-tax of merger related and restructuring costs were
up 12% to $1.00 per share ($29.3 million) from $0.89 per share ($27.7 million)
for the same period last year. Including one time charges, six month diluted
earnings per share were $0.37 per share ($10.8 million) compared to $0.89 ($27.7
million) in 1997.
During the second quarter of 1998, net interest income decreased 3% to
$49.2 million and for the six month period decreased 2% to $97.1 million
reflecting the sale of all new mortgage loans generated and the lower interest
rate environment. HUBCO's net interest margin for the second quarter of 1998 was
4.49% and 4.57% for the six month period.
Non interest income, excluding security gains, totaled $13.0 million
for the second quarter of 1998 and $23.2 million for the six month period. Non
interest income increased 32% in the second quarter compared to the similar 1997
period and increased 27% from the 1998 first quarter driven by significantly
higher loan and Shoppers Charge fee income. Non interest income represents 21%
of total income and is growing faster than any other income segment.
Non interest expense for the second quarter of 1998 was $33.4 million,
excluding one time charges, compared with $36.0 million a year ago. This
decrease reflects efficiencies achieved to date from ongoing operations at the
acquired institutions. HUBCO's efficiency ratio (a ratio of overhead expense to
recurring tax equivalent income) was 49.0% for the second quarter of 1998 and
all efficiencies from recent acquisitions have not yet been reflected in HUBCO's
results.
Total non-performing assets of $60.7 million (1.19% of assets)
decreased 25% from $81.2 million a year ago and decreased 18% from $74.1 million
at year end. Non-performing loans are primarily related to the mortgage
portfolios which are collateralized by real property and, therefore, losses
should be mitigated by the value of such collateral. The Allowance for Possible
Loan Losses totaled $52.5 million, up from $50.4 million a year ago and $51.5
million at December 31, 1997, representing 102% of non-performing loans and
1.86% of the loan portfolio as of June 30, 1998.
HUBCO's total assets at June 30, 1998 were $5.11 billion. Loans totaled
$2.82 billion, deposits were $3.87 billion and stockholders' equity was $273.3
million. All regulatory capital ratios exceed those necessary to be considered a
well-capitalized institution.
HUBCO, Inc. is the bank holding company for Hudson United Bank which
operates in Northern New Jersey, Lafayette American Bank which operates in
Connecticut and the Bank of the Hudson which operates in New York State. In
addition, HUBCO has three pending mergers with Community Financial Holding
Corporation of Westmont NJ, Dime Financial Corporation of Wallingford CT. and
IBS Financial Corp. of Cherry Hill NJ. The Company also has two branches in New
York of First Union National Bank scheduled to be acquired in July 1998. After
closing all pending acquisitions, HUBCO, Inc. will have approximately 160
offices with total assets of approximately $6.5 billion.
<PAGE>
<TABLE>
<CAPTION>
HUBCO, INC.
Financial Highlights
(In thousands, except per share data)
Three Months Ended
June 30,
1998 1997
---- ----
Including merger related and restructuring charges:
- ---------------------------------------------------
<S> <C> <C>
Net Interest Income $49,241 $50,650
Provision for Possible Loan Losses 2,681 2,346
Non Interest Income 12,995 9,843
Security Gains 784 1,861
Non Interest Expense 58,406 35,966
Pretax Income 1,933 24,042
Tax Expense 1,677 9,844
Net Income 256 14,198
Basic Earnings Per Share $ .01 $ .48
Diluted Earnings Per Share $ .01 $ .46
Return on Assets .02% 1.20%
Return on Average Equity .34% 17.46%
Excluding merger related and restructuring charges:
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Non Interest Expense 33,407 35,966
Tax Expense 10,362 9,844
Pretax Income 26,932 24,042
Net Income 16,570 14,198
Basic Earnings Per Share $ .58 $ .48
Diluted Earnings Per Share $ .57 $ .46
Return on Assets 1.40 1.20%
Return on Average Equity 22.15 17.46%
Weighted Average Shares - Basic (1) 28,651 29,267
Weighted Average Shares - Diluted (1) 29,185 30,916
</TABLE>
(1) Weighted Average Shares Outstanding have been retroactively adjusted for the
effects of acqusitions accounted for as pooling of interests, and for stock
dividends.
<PAGE>
<TABLE>
<CAPTION>
HUBCO, INC.
Financial Highlights
(In thousands, except per share data)
Six Months Ended
June 30,
1998 1997
---- ----
Including merger related and restructuring charges:
- ---------------------------------------------------
<S> <C> <C>
Net Interest Income $97,055 $99,138
Provision for Possible Loan Losses 8,794 4,680
Non Interest Income 23,221 19,191
Security Gains 3,053 3,149
Non Interest Expense 96,346 70,755
Pretax Income 18,189 46,043
Tax Expense 7,348 18,378
Net Income 10,841 27,665
Basic Earnings Per Share $ 0.38 $ 0.93
Diluted Earnings Per Share $ 0.37 $ 0.89
Return on Assets 0.47% 1.16%
Return on Average Equity 7.15% 16.96%
Excluding merger related and restructuring charges:(2)
- ---------------------------------------------------
Non Interest Expense 68,896 70,775
Pretax Income 46,302 46,043
Tax Expense 16,998 18,378
Net Income 29,304 27,665
Basic Earnings Per Share $ 1.02 $ .93
Diluted Earnings Per Share $ 1.00 $ .89
Return on Assets 1.27% 1.16%
Return on Average Equity 19.33% 16.96%
Weighted Average Shares - Basic (1) 28,813 29,266
Weighted Average Shares - Diluted (1) 29,371 31,044
<CAPTION>
As of June 30,
1998 1997
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Total Assets $5,109,552 $4,797,503
Total Loans 2,819,123 2,933,112
Total Deposits 3,865,526 3,818,466
Stockholders' Equity 273,320 335,688
</TABLE>
(1) Weighted Average Shares Outstanding have been retroactively adjusted for the
effects of acqusitions accounted for as pooling of interests, and for stock
dividends.
(2) Excludes $3,500 loan loss provision taken by Poughkeepsie Financial Corp.
and MSB Bancorp, Inc. in the first quarter to bring their reserve policy in
line with Hubco's.
