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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) October 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 October 15, 1998, HUBCO, Inc. ("HUBCO") reported a loss of $20.1
million or $0.50 per diluted share for the third quarter of 1998 compared to
income of $19.4 million or $0.44 per diluted share in the corresponding 1997
period. HUBCO reported that income in the third quarter was reduced by one time
merger related and restructuring charges of $27.8 million, after-tax, which
relate primarily to the consummation of the Community Financial Holding Corp.,
IBS Financial Corp. and Dime Financial Corp. acquisitions which closed in the
third quarter and were accounted for on a pooling of interests basis. In
addition, HUBCO reported that in the third quarter it incurred a $14.9 million
after-tax one time charge related to a planned bulk sale of non-performing loans
and other real estate owned. For the nine months ended September 30, 1998,
including one time charges, HUBCO's net loss amounted to $0.6 million or $0.02
per share compared to a profit of $1.25 per diluted share or $55.0 million for
the same period in 1997.
Excluding one time charges related to the consummation of the
acquisitions and the bulk sale of non performing loans, HUBCO reported third
quarter core earnings of $0.55 per share on a diluted basis or $22.5 million, a
25 % increase from $0.44 per diluted share or $19.4 million for the same period
in 1997. Return on average assets and return on average equity were 1.31% and
18.49%, respectively, for the third quarter, excluding restructuring charges,
compared to 1.20% and 14.59%, respectively, in the same period in 1997.
HUBCO's total assets at September 30, 1998 were $6.7 billion. Loans
totaled $3.4 billion, deposits were $5.2 billion and stockholders' equity was
$452 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.
A copy of HUBCO's press release is attached to this Form 8-K as an
Exhibit.
Item 7. Exhibits
Exhibit 99 Press Release dated October 15, 1998
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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: October 22, 1998 By:-------------------------------------
Joseph F. Hurley
Chief Financial Officer
<PAGE>
INDEX TO EXHIBIT
Exhibit No. Description
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99 Press Release dated October 15, 1998
HUBCO, INC.
1000 MacArthur Blvd.
Mahwah, NJ 07430
(NASDAQ:HUBC)
AT THE COMPANY:
Kenneth T. Neilson Joseph F. Hurley
Chairman, President & CEO Executive Vice President & CFO
(201) 236-2631 (201) 236-6141
FOR IMMEDIATE RELEASE
October 15, 1998
HUBCO, Inc. Reports a 25% Increase in Core Earnings
and Book Value Increases to $11.15
Mahwah, New Jersey, October 15, 1998--HUBCO, Inc. (NASDAQ:HUBC), today
reported third quarter core earnings of $0.55 per share on a diluted basis or
$22.5 million, a 25% increase from $0.44 per diluted share or $19.4 million for
the same period in 1997. Core earnings excludes $27.8 million after-tax of
merger related and restructuring charges resulting from the acquisitions of
Community Financial Holding Corp., IBS Financial Corp. and Dime Financial Corp.
and a $14.9 million after-tax charge related to a planned bulk sale of
non-performing loans and other real estate owned ("OREO") ("one time charges").
"We are enjoying strong core earnings with excellent operating ratios.
With so much talk about potential softness in the U.S. economy, we have decided
to take action now strengthening HUBCO's credit posture and balance sheet by
selling substantially all of our non-performing loans and OREO", said Ken
Neilson, HUBCO's Chairman and CEO. "With our 1998 acquisitions completed we are
now focused on earnings growth and the opportunities in our marketplace."
HUBCO's Return on Average Assets was 1.31% and Return on Average Equity
was 18.49% for the quarter, excluding one time charges. Including one time
charges, the third quarter loss amounted to $20.1 million or $0.50 per diluted
share, compared to income of $19.4 million or $0.44 per diluted share in the
corresponding 1997 period. Although one time charges impacted HUBCO's three
month and nine month earnings, the net effect of the acquisitions on book value
was a 31% increase or $2.66 per share to $11.15 compared to year end 1997 as
originally reported.
For the nine months ended September 30, 1998, diluted earnings per
share excluding one time charges increased 17% to $1.46 per share or $60.8
million from $1.25 per share or $55.0 million for the same period last year.
Including one time charges, the nine month loss amounted to $0.6 million or
$0.02 per share compared to a profit of $1.25 per diluted share or $55.0 million
in 1997.
Net interest income was $64.4 million and $190.8 million for the third
quarter and nine months of 1998 respectively, which approximated 1997 levels
despite the lower interest rate environment. HUBCO's net interest margin for the
third quarter of 1998 was 4.06% and 4.15% for the nine month period.
Non interest income totaled $13.5 million for the third quarter of
1998 and $39.3 million for the nine month period. These amounts represent
increases of 14% and 20% over the third quarter and nine months of 1997
respectively. Non-interest income as a percent of revenue was 17% for the third
quarter and nine months of 1998 compared to 15% for the corresponding periods of
last year.
Non interest expense for the third quarter of 1998 was $39.9 million,
excluding one time charges, compared with $44.1 million a year ago. While this
decrease reflects efficiencies achieved to date from ongoing operations, they
are partially offset by new expenses incurred with the acquisition earlier this
year of 27 branches accounted for under the purchase method. HUBCO's efficiency
ratio (a ratio of overhead expense to recurring tax equivalent income) was 46.5%
for the third quarter of 1998 and all efficiencies from recent acquisitions have
not yet been achieved.
Included in HUBCO's third quarter results is a $14.9 million after-tax
charge and a $10.3 million write-down against the Allowance for Possible Loan
Losses and OREO reserve. These charges relate to the planned disposal of $64
million of non-performing loans and OREO in a bulk sale. Despite progress in the
resolution of these non-performing assets, HUBCO believes that disposal is
appropriate at this time rather than its standard work-out process given the
potential of a slowing economy and a weakening real estate market. This sale is
anticipated to be completed in the fourth quarter. Non-performing assets held
for sale amounted to $31 million, net of the above mentioned charges, or 0.91%
of total loans and OREO at September 30, 1998. In addition, at period end, the
Allowance for Possible Loan Losses totaled $53.5 million and represented 161% of
net non-performing assets and 1.56% of total loans.
HUBCO's total assets at September 30, 1998 were $6.7 billion. Loans
totaled $3.4 billion, deposits were $5.2 billion and stockholders' equity was
$452 million. All regulatory capital ratios exceed those necessary to be
considered a well-capitalized institution, with HUBCO's leverage capital ratio
at approximately 7%.
HUBCO, Inc. is a multi-state bank holding company with 170 offices
operating under the name Hudson United Bank in New Jersey, Lafayette American
Bank in Connecticut and Bank of the Hudson in New York state.
The foregoing contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Such statements are not
historical facts and include expressions about management's confidence and
strategies and management's expectations about new and existing programs and
products, relationships, opportunities, technology and market conditions. These
statements may be identified by such forward-looking terminology and market
conditions. These statements may be identified by such forward-looking
terminology as "expect", "look", "believe", "anticipate", "may", "will", or
expressions of confidence like "strong" or "on-going" or similar statements or
Variations of such terms. Such forward-looking statements involve certain risks
and uncertainties. These include, but are not limited to, the direction of
movements in interest rates, the possibility of further disruption in the credit
markets, successfully complete implementation of Year 2000 technology changes,
successful implementation and integration of HUBCO's acquisitions, (success of
bulk sale of loans), the effects of economic conditions and the impact of legal
and regulatory barriers and structures. Actual results may differ materially
from such forward-looking statements. HUBCO assumes no obligation for updating
any such forward-looking statements at any time.
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<TABLE>
<CAPTION>
HUBCO, INC.
Financial Highlights
(In thousands, except per share data)
Three Months Ended
September 30,
1998 1997
<S> <C> <C>
Including one time charges:
Net Interest Income $ 64,441 $65,021
Provision for Possible Loan Losses 2,791 3,000
Loss on Assets Held for Sale 23,303 -
Non Interest Income 13,501 11,801
Security Gains 16 2,538
Non Interest Expense 39,878 44,091
Merger Related and Restructuring Charges 38,599 -
Pretax (Loss) Income (26,522) 32,269
Tax (Benefit) Expense (6,389) 12,860
Net (Loss) Income (20,133) 19,409
Basic Earnings Per Share $(0.50) $ 0.46
Diluted Earnings Per Share $(0.50) $ 0.44
Return on Assets (1.17)% 1.20%
Return on Average Equity (16.52)% 14.59%
Excluding one time charges:
Non Interest Expense $ 39,878 $44,091
Pretax Income 35,289 32,269
Tax Expense 12,757 12,860
Net Income 22,532 19,409
Basic Earnings Per Share $ 0.56 $ 0.46
Diluted Earnings Per Share $ 0.55 $ 0.44
Return on Assets 1.31% 1.20%
Return on Average Equity 18.49% 14.59%
Weighted Average Shares - Basic (1) 40,358 41,210
Weighted Average Shares - Diluted (1) 41,243 43,673
</TABLE>
(1) Weighted Average Shares Outstanding have been retroactively adjusted for the
effects of acquisitions accounted for as poolings of interest, and for stock
dividends.
<PAGE>
<TABLE>
<CAPTION>
HUBCO, INC.
Financial Highlights
(In thousands, except per share data)
Nine Months Ended
September 30,
1998 1997
<S> <C> <C>
Including one time charges:
Net Interest Income $190,844 $192,368
Provision for Possible Loan Losses 11,890 7,965
Loss on Assets Held for Sale 23,303 -
Non Interest Income 39,291 32,830
Security Gains 3,187 5,704
Non Interest Expense 126,100 131,778
Merger Related and Restructuring Charges 66,290 -
Pretax Income 5,739 91,159
Tax Expense 6,388 36,187
Net (Loss) Income (649) 54,972
Basic Earnings Per Share $(0.02) $1.31
Diluted Earnings Per Share $(0.02) $1.25
Return on Assets (0.01)% 1.14%
Return on Average Equity (0.17)% 14.03%
Excluding one time charges (1):
Non Interest Expense $126,100 $131,778
Pretax Income 95,995 91,159
Tax Expense 35,185 36,187
Net Income 60,810 54,972
Basic Earnings Per Share $1.49 $1.31
Diluted Earnings Per Share $1.46 $1.25
Return on Assets 1.23% 1.14%
Return on Average Equity 16.28% 14.03%
Weighted Average Shares - Basic (2) 40,725 41,431
Weighted Average Shares - Diluted (2) 41,747 43,905
As of September 30,
1998 1997
Total Assets $6,677,011 $6,576,999
Total Loans 3,437,183 3,567,900
Total Deposits 5,208,331 5,202,575
Stockholders' Equity 451,685 533,306
</TABLE>
(1) Does not include $3,500 loan loss provision taken by Bank of the Hudson and
MSB in the first quarter to bring their reserve policies in line with
Hubco's.
(2) Weighted Average Shares Outstanding have been retroactively adjusted for the
effects of acquisitions accounted for as poolings of interest, and for stock
dividends.
