================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
----------
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission File Number 0-010699
HUDSON UNITED BANCORP
------------------------------------------------------
(Exact name of registrant as specified in its charter)
NEW JERSEY 22-2405746
------------------------------- ----------------------
(State of Other Jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1000 MACARTHUR BLVD, MAHWAH, NJ 07430
- --------------------------------------- ----------
(Address of principal executive office) (Zip Code)
(201)-236-2600
----------------------------------------------------
(Registrant's telephone number, including area code)
HUBCO, INC.
----------------------------------------------------
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 Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each, of the issuer's classes of
common stock, as of the last practicable date: 39,465,711 shares, no par value,
outstanding as of May 11, 1999.
================================================================================
<PAGE>
HUDSON UNITED BANCORP
INDEX
PART I. FINANCIAL INFORMATION
- -------------------------------
Item 1. Financial Statements (Unaudited):
Consolidated Balance Sheets
At March 31, 1999 and December 31, 1998........................ 1
Consolidated Statements of Income
For the three-months ended
March 31, 1999 and 1998........................................ 2
Consolidated Statements of Comprehensive Income
For the three-months ended
March 31, 1999 and 1998....................................... 3
Consolidated Statements of Changes in Stockholders' Equity
For the three-months ended
March 31, 1999 and for the Year ended December 31, 1998........ 4
Consolidated Statements of Cash Flows
For the three-months ended
March 31, 1999 and 1998....................................... 5
Notes to Consolidated Financial Statements..................... 6-10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.................. 11-15
PART II. OTHER INFORMATION
- ---------------------------
Item 4. Submission of Matters to a Vote of Security Holders ........... 16
Item 6. Exhibits and Reports on Form 8-K............................... 16-17
Signatures..................................................... 18
FINANCIAL DATA SCHEDULE.................................................. 19
- -----------------------
<PAGE>
<TABLE>
<CAPTION>
HUDSON UNITED BANCORP
- --------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEETS (Unaudited)
MARCH 31, December 31,
(in thousands, except share data) 1999 1998
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Cash and due from banks .............................................................. $ 242,368 $ 217,954
Federal funds sold ................................................................... 8,819 17,697
----------- -----------
TOTAL CASH AND CASH EQUIVALENTS ............................................. 251,187 235,651
Investment securities available for sale, at market value ............................ 2,422,566 2,260,625
Investment securities held to maturity, at cost (market value of $638,772 and
$638,564 for 1999 and 1998, respectively) ........................................ 642,314 634,971
Assets held for sale ................................................................. -- 14,147
Loans:
Residential mortgages ........................................................... 1,508,243 1,601,957
Commercial real estate mortgages ................................................ 678,292 675,366
Commercial and financial ........................................................ 689,517 656,553
Consumer credit ................................................................. 366,645 370,353
Credit card ..................................................................... 181,617 82,581
----------- -----------
TOTAL LOANS ................................................................. 3,424,314 3,386,810
Less: Allowance for possible loan losses ........................................ (54,504) (53,499)
----------- -----------
NET LOANS ................................................................... 3,369,810 3,333,311
Premises and equipment, net .......................................................... 84,708 83,525
Other real estate owned .............................................................. 898 103
Intangibles, net of amortization ..................................................... 84,937 78,990
Other assets ......................................................................... 189,647 137,338
----------- -----------
TOTAL ASSETS ................................................................ $ 7,046,067 $ 6,778,661
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest bearing ............................................................. $ 870,506 $ 941,253
Interest bearing ................................................................ 4,061,461 4,110,137
----------- -----------
TOTAL DEPOSITS .............................................................. 4,931,967 5,051,390
Borrowings ........................................................................... 1,292,644 821,593
Other liabilities .................................................................... 194,287 248,863
----------- -----------
6,418,898 6,121,846
Subordinated debt .................................................................... 100,000 100,000
Company-obligated mandatorily redeemable preferred series B capital securities
of two subsidiary trusts holding solely junior subordinated debentures of
the Company ...................................................................... 100,000 100,000
----------- -----------
TOTAL LIABILITIES............................................................ 6,618,898 6,321,846
Stockholders' Equity:
Convertible preferred stock - Series B, no par value; authorized 10,609,000
shares; 500 shares issued and outstanding in 1998 ............................... -- 50
Common stock, no par value; authorized 54,636,350 shares;
40,633,204 shares issued and 39,573,709 shares outstanding in 1999 and
40,633,204 shares issued and 40,411,521 shares
outstanding in 1998 ............................................................. 72,246 72,246
Additional paid-in capital ......................................................... 262,855 269,264
Retained earnings .................................................................. 128,030 113,787
Treasury stock, at cost, 1,059,495 shares in 1999 and 221,683 shares in 1998 ....... (34,484) (5,980)
Employee stock awards and unallocated shares held in ESOP, at cost ................. (2,243) (2,368)
Accumulated other comprehensive income ............................................. 765 9,816
----------- -----------
TOTAL STOCKHOLDERS' EQUITY .................................................. 427,169 456,815
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .................................. $ 7,046,067 $ 6,778,661
=========== ===========
</TABLE>
See notes to consolidated financial statements.
1
<PAGE>
HUDSON UNITED BANCORP
- --------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
For the Three-Months
Ended March 31,
------------------------
(in thousands, except share data) 1999 1998
- --------------------------------------------------------------------------------
INTEREST AND FEE INCOME:
Loans ............................................. $ 68,862 $ 76,308
Investment securities ............................. 41,956 36,506
Other ............................................. 324 2,168
--------- ---------
TOTAL INTEREST AND FEE INCOME .............. 111,142 114,982
--------- ---------
INTEREST EXPENSE:
Deposits .......................................... 31,984 43,243
Borrowings ........................................ 12,443 3,200
Subordinated and other debt ....................... 4,168 5,999
--------- ---------
TOTAL INTEREST EXPENSE ..................... 48,595 52,442
--------- ---------
NET INTEREST INCOME ........................ 62,547 62,540
PROVISION FOR POSSIBLE LOAN LOSSES ................ 2,500 6,278
--------- ---------
NET INTEREST INCOME AFTER PROVISION
FOR POSSIBLE LOAN LOSSES ................. 60,047 56,262
--------- ---------
NONINTEREST INCOME:
Trust department income ........................... 945 864
Service charges on deposit accounts ............... 5,425 5,238
Securities gains .................................. 914 2,387
Shoppers Charge fees .............................. 3,963 2,271
Other income ...................................... 6,232 3,120
--------- ---------
TOTAL NONINTEREST INCOME ................... 17,479 13,880
--------- ---------
NONINTEREST EXPENSE:
Salaries .......................................... 13,355 15,461
Pension and other employee benefits ............... 2,769 6,075
Occupancy expense ................................. 4,690 4,096
Equipment expense ................................. 2,437 2,817
Deposit and other insurance ....................... 527 777
Outside services .................................. 7,757 6,782
Amortization of intangibles ....................... 3,146 2,421
Other expense ..................................... 4,998 5,793
Merger related and restructuring costs ............ -- 2,630
--------- ---------
TOTAL NONINTEREST EXPENSE .................. 39,679 46,852
--------- ---------
INCOME BEFORE INCOME TAXES ................. 37,847 23,290
PROVISION FOR INCOME TAXES ........................ 13,246 8,356
--------- ---------
NET INCOME ................................. $ 24,601 $ 14,934
========= =========
EARNINGS PER SHARE:
Basic ............................................. $ 0.62 $ 0.36
Diluted ........................................... $ 0.61 $ 0.35
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic ............................................. 39,983 41,016
Diluted ........................................... 40,596 42,356
See notes to consolidated financial statements.
2
<PAGE>
HUDSON UNITED BANCORP
- --------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
Three Months Ended
March 31,
-----------------------
(In thousands) 1999 1998
- --------------------------------------------------------------------------------
NET INCOME ................................ $ 24,601 $ 14,934
======== ========
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Unrealized security gains (losses) arising
during period .................................... $ (8,457) $ (192)
Less: reclassification adjustment for gains
included in net income ...................... (594) (1,432)
-------- --------
Other comprehensive income (loss) .................. (9,051) (1,624)
======== ========
COMPREHENSIVE INCOME ...................... $ 15,550 $ 13,310
======== ========
See notes to consolidated financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
HUDSON UNITED BANCORP
- --------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited)
Convertible
Preferred Stock Common Stock Additional
-------------------------------------------------- Paid-in- Retained
(in thousands) Shares Amount Shares Amount Capital Earnings
- --------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1997 1,250 $ 125 41,208,974 $ 73,269 $ 292,198 $ 164,612
==========================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net income ............................ -- -- -- -- -- 23,151
Cash dividends - common ............... -- -- -- -- -- (34,718)
3% Stock dividend ..................... -- -- 40,213 72 (709) (40,797)
Shares issued for:
Stock options exercised ............. -- -- 330,684 588 (8,410) --
Warrants exercised .................. -- -- 7,158 13 (97) --
Preferred stock conversion .......... (750) (75) 16,608 30 (130) --
Cash in lieu of fractional shares ..... -- -- -- -- (212) --
Other transactions .................... -- -- 3,750 7 (7) --
IBS fiscal year adjustment ............ -- -- -- -- -- 1,539
Purchase of treasury stock ............ -- -- -- -- -- --
Issuance and retirement of
treasury stock ...................... -- -- (989,058) (1,759) (18,930) --
Effect of compensation plans .......... -- -- 14,875 26 5,561 --
Other comprehensive income ............ -- -- -- -- -- --
- --------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1998 .......... 500 50 40,633,204 72,246 269,264 113,787
- --------------------------------------------------------------------------------------------------------------------------
Net income ............................ -- -- -- -- -- 24,601
Cash dividends - common ............... -- -- -- -- -- (10,358)
Shares issued for:
Stock options exercised ............. -- -- -- -- (5,749) --
Warrants exercised .................. -- -- -- -- (182) --
Preferred stock conversion .......... (500) (50) -- -- (478) --
Purchase of treasury stock ............ -- -- -- -- -- --
Effect of compensation plans .......... -- -- -- -- -- --
Other comprehensive income ............ -- -- -- -- -- --
- --------------------------------------------------------------------------------------------------------------------------
Balance at March 31, 1999 ............. -- $ -- 40,633,204 $ 72,246 $ 262,855 $ 128,030
- --------------------------------------------------------------------------------------------------------------------------
See notes to consolidated financial statements.
<CAPTION>
Employee
Stock
Awards and
Unallocated Accumulated
Shares Held Other
Treasury in ESOP, at Comprehensive
Stock Cost Income Total
- ----------------------------------------------------------------------------------------------------------
Balance at December 31, 1997 $(19,133) $(9,609) $ 5,639 $ 507,101
==========================================================================================================
<S> <C> <C> <C> <C>
Net income ............................ -- -- -- 23,151
Cash dividends - common ............... -- -- -- (34,718)
3% Stock dividend ..................... 41,434 -- -- --
Shares issued for:
Stock options exercised ............. 18,373 -- -- 10,551
Warrants exercised .................. 173 -- -- 89
Preferred stock conversion .......... 175 -- -- --
Cash in lieu of fractional shares ..... -- -- -- (212)
Other transactions .................... -- -- -- --
IBS fiscal year adjustment ............ -- -- -- 1,539
Purchase of treasury stock ............ (69,880) -- -- (69,880)
Issuance and retirement of
treasury stock ...................... 20,689 -- -- --
Effect of compensation plans .......... 2,189 7,241 -- 15,017
Other comprehensive income ............ -- -- 4,177 4,177
- ----------------------------------------------------------------------------------------------------------
Balance at December 31, 1998 .......... (5,980) (2,368) 9,816 456,815
- ----------------------------------------------------------------------------------------------------------
Net income ............................ -- -- -- 24,601
Cash dividends - common .............. -- -- -- (10,358)
Shares issued for:
Stock options exercised ............. 11,349 -- -- 5,600
Warrants exercised .................. 236 -- -- 54
Preferred stock conversion .......... 528 -- -- --
Purchase of treasury stock ............ (40,617) -- -- (40,617)
Effect of compensation plans .......... -- 125 -- 125
Other comprehensive income (loss)...... -- -- (9,051) (9,051)
- ----------------------------------------------------------------------------------------------------------
Balance at March 31, 1999 ............. $(34,484) $(2,243) $ 765 $ 427,169
- ----------------------------------------------------------------------------------------------------------
</TABLE>
See notes to consolidated financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
HUDSON UNITED BANCORP
- --------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
THREE MONTHS ENDED
MARCH 31,
--------------------------
(in thousands) 1999 1998
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income ....................................................... $ 24,601 $ 14,934
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for possible loan losses ........................... 2,500 6,278
Provision for depreciation and amortization .................. 5,368 4,784
Amortization of security premiums, net ....................... 486 390
Securities gains ............................................. (914) (2,387)
Gain on sale of premises and equipment ....................... (10) (25)
Gain on sale of loans ........................................ (2,235) (143)
Market adjustment on ESOP .................................... -- 629
MRP earned ................................................... -- 606
IBS fiscal year adjustment ................................... -- 1,539
Net change in assets held for sale ........................... 14,147 --
Decrease (increase) in other assets .......................... 13,154 (8,716)
Increase (decrease) in other liabilities ..................... 13,145 (3,117)
--------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES .......................... 70,242 14,772
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of investment securities:
Available for sale ............................................. 59,911 138,082
Proceeds from repayments and maturities of investment securities:
Available for sale ............................................. 293,871 195,233
Held to maturity ............................................... 46,113 99,813
Purchase of investment securities:
Available for sale ............................................. (657,269) (384,749)
Held to maturity ............................................... (53,744) (64,553)
Net cash acquired through acquisitions ........................... 141,829 (2,270)
Net decrease in loans other than purchases and sales ............. 34,640 26,158
Proceeds from sales of loans ..................................... 42,904 21,470
Purchase of loans ................................................ (114,273) --
Proceeds from sales of premises and equipment .................... 10 84
Purchases of premises and equipment .............................. (3,171) (1,666)
(Increase) decrease in other real estate ......................... (795) 1,441
--------- ---------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES ................ (209,974) 29,043
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net decrease in demand deposits, NOW accounts,
and savings accounts ........................................... (105,385) (18,194)
Net (decrease) increase in certificates of deposit ............... (165,077) 4,887
Net increase (decrease) in borrowed funds ........................ 471,051 (147,296)
Reduction of ESOP loan ........................................... -- 473
Proceeds from issuance of common stock............................ 5,654 2,130
Cash dividends ................................................... (10,358) (8,272)
Acquisition of treasury stock .................................... (40,617) (2,303)
--------- ---------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES ................ 155,268 (168,575)
--------- ---------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ................... 15,536 (124,760)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ................... 235,651 518,159
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ......................... $ 251,187 $ 393,399
========= =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for-
Interest ......................................................... $ 48,595 60,198
Income Taxes ..................................................... 59 3,430
========= =========
</TABLE>
See notes to consolidated financial statements.
5
<PAGE>
HUDSON UNITED BANCORP
- --------------------------------------------------------------------------------
HUDSON UNITED BANCORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE A -- BASIS OF PRESENTATION
The accompanying financial statements of Hudson United Bancorp and Subsidiaries
("the Company") include the accounts of the parent company, Hudson United
Bancorp, and its wholly-owned subsidiaries: Hudson United Bank ("Hudson
United"), MSB Travel Inc., HUBCO Capital Trust I and HUBCO Capital Trust II. All
material intercompany balances and transactions have been eliminated in
consolidation. In March 1999, the former Lafayette American Bank, Bank of the
Hudson, and Hudson United Bank where combined to form Hudson United. In
addition, the shareholders of the Company on April 21, 1999 approved an
amendment to the certificate of incorporation to change the name of the Company
from HUBCO, Inc. to Hudson United Bancorp. These unaudited consolidated
financial statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do
not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, the information presented includes all adjustments, consisting of
normal recurring accruals, considered necessary for a fair presentation, in all
material respects, of the interim period results. The results of operations for
periods of less than one year are not necessarily indicative of results for the
full year. The consolidated financial statements should be read in conjunction
with the Company's Annual Report on Form 10-K filed with the Commission on March
15, 1999, for the year ended December 31, 1998.
NOTE B -- EARNINGS PER SHARE
In the fourth quarter of 1997, the Company adopted SFAS No. 128, "Earnings per
Share." This statement establishes standards for computing and presenting
earnings per share and requires dual presentation of basic and diluted earnings
per share. Basic earnings per share is computed by dividing net income, less
dividends on the convertible preferred stock, by the weighted average number of
common shares outstanding during the period. Diluted earnings per share is
computed by dividing net income by the weighted average number of common shares
plus the number of shares issuable upon conversion of the preferred stock (when
outstanding) and the incremental number of shares issuable from the exercise of
stock options, stock warrants, and includes the impact of the Management
Recognition Plan ("MRP"), calculated using the treasury stock method. All per
share amounts have been retroactively restated to reflect all stock splits and
stock dividends.
6
<PAGE>
A reconciliation of net income to net income available to common stockholders
and of weighted average common shares outstanding to weighted average shares
outstanding assuming dilution follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
----------------------------
(in thousands, except per share data) 1999 1998
- ------------------------------------------------------------------------------------
<S> <C> <C>
BASIC EARNINGS PER SHARE
Net Income .......................................... $ 24,601 $ 14,934
Less Preferred Stock Dividends ...................... -- --
-------- --------
Net Income Available To Common Stockholders ......... 24,601 14,934
Weighted Average Common Shares Outstanding .......... 39,983 41,016
Basic Earnings Per Share ............................ $ 0.62 $ 0.36
======== ========
DILUTED EARNINGS PER SHARE
Net Income .......................................... $ 24,601 $ 14,934
Weighted Average Common Shares Outstanding .......... 39,983 41,016
Effect Of Dilutive Securities:
Convertible Preferred Stock ....................... 3 38
Warrants .......................................... 5 34
Unearned MRP ...................................... -- 125
Stock Options ..................................... 605 1,143
-------- --------
Weighted Average Common Shares Outstanding Assuming
Dilution ............................................ 40,596 42,356
Diluted Earnings Per Share .......................... $ 0.61 $ 0.35
======== ========
</TABLE>
NOTE C -- ACQUISITIONS
On January 26, 1999, the Company announced the signing of a definitive merger to
acquire Little Falls Bancorp, Inc. in a combination stock and cash transaction.
Little Falls Bancorp, Inc. has assets of approximately $341 million and operates
six offices in the New Jersey counties of Hunterdon and Passaic. The Company
anticipates the merger will be completed on May 20, 1999 and that the
acquisition will be accounted for under the purchase method of accounting.
On March 26, 1999, the Company completed its purchase of $151 million in
deposits and a retail branch office in Hartford, Connecticut from First
International Bank.
On May 11, 1999, the Company announced a purchase and sale agreement in which
Hudson United Bank will acquire the loans (approximately $159 million) and other
financial assets, as well as assume the deposit liabilities (approximately $154
million) of Advest Bank and Trust. In addition, the Company simultaneously
announced it had entered into a strategic alliance agreement in which Hudson
United Bank will become the exclusive provider of banking products and services
to the clients of Advest, Inc. The purchase and sale transaction is subject to
regulatory approval and is expected to close in the third quarter.
7
<PAGE>
NOTE D -- SECURITIES
The following table presents the amortized cost and estimated market value of
investment securities available for sale and held to maturity at the dates
indicated:
<TABLE>
<CAPTION>
March 31, 1999
----------------------------------------------------------------
Gross Unrealized Estimated
Amortized ------------------------------ Market
Cost Gains (Losses) Value
--------------- ------------------------------ ---------------
<S> <C> <C> <C> <C>
AVAILABLE FOR SALE
U.S. Government ................... $ 68,549 $ 891 -- $ 69,440
U.S. Government agencies .......... 226,502 1,423 (69) 227,856
Mortgage-backed securities ........ 2,018,210 6,237 (7,366) 2,017,081
States and political subdivisions . 7,371 89 -- 7,460
Other debt securities ............. 4,010 4 (40) 3,974
Equity securities ................. 96,131 1,916 (1,292) 96,755
----------- -------- -------- -----------
$ 2,420,773 $ 10,560 $ (8,767) $ 2,422,566
=========== ======== ======== ===========
<CAPTION>
March 31, 1999
----------------------------------------------------------------
Gross Unrealized Estimated
Amortized ------------------------------ Market
Cost Gains (Losses) Value
--------------- ------------------------------ ---------------
<S> <C> <C> <C> <C>
HELD TO MATURITY
U.S. Government ................... $ 29,138 $ 161 -- $ 29,299
U.S. Government agencies .......... 65,882 1,014 (2) 66,894
Mortgage-backed securities ........ 536,639 562 (5,468) 531,733
States and political subdivisions . 10,583 198 (7) 10,774
Other debt securities ............. 72 -- -- 72
----------- -------- -------- -----------
$ 642,314 $ 1,935 $ (5,477) $ 638,772
=========== ======== ======== ===========
<CAPTION>
December 31, 1998
----------------------------------------------------------------
Gross Unrealized Estimated
Amortized ------------------------------ Market
Cost Gains (Losses) Value
--------------- ------------------------------ ---------------
<S> <C> <C> <C> <C>
AVAILABLE FOR SALE
U.S. Government ................... $ 84,530 $ 1,583 -- $ 86,113
U.S. Government agencies .......... 369,357 3,162 -- 372,519
Mortgage-backed securities ........ 1,688,464 13,645 (4,306) 1,697,803
States and political subdivisions . 11,219 100 (1) 11,318
Other debt securities ............. 4,083 5 (40) 4,048
Equity securities ................. 87,027 2,471 (674) 88,824
----------- -------- -------- -----------
$ 2,244,680 $ 20,966 $ (5,021) $ 2,260,625
=========== ======== ======== ===========
<CAPTION>
December 31, 1998
----------------------------------------------------------------
Gross Unrealized Estimated
Amortized ------------------------------ Market
Cost Gains (Losses) Value
--------------- ------------------------------ ---------------
<S> <C> <C> <C> <C>
HELD TO MATURITY
U.S. Government ................... $ 42,373 $ 393 -- $ 42,766
U.S. Government agencies .......... 37,360 1,462 -- 38,822
States and political subdivisions . 15,513 182 (4) 15,691
Mortgage-backed securities ........ 539,725 2,277 (717) 541,285
----------- -------- -------- -----------
$ 634,971 4,314 $ (721) $ 638,564
=========== ======== ======== ===========
</TABLE>
8
<PAGE>
NOTE E -- COMPANY-OBLIGATED MANDATORILY REDEEMABLE PREFERRED SERIES B CAPITAL
SECURITIES OF TWO SUBSIDIARY TRUSTS HOLDING SOLELY JUNIOR SUBORDINATED
DEBENTURES OF THE COMPANY
On January 31, 1997, the Company placed $50.0 million in aggregate liquidation
amount of 8.98% Capital Securities due February 2027, using HUBCO Capital Trust
I, a statutory business trust formed under the laws of the State of Delaware.
The sole asset of the trust, which is the obligor on the Series B Capital
Securities, is $51.5 million principal amount of 8.98% Junior Subordinated
Debentures due 2027 of the Company. The net proceeds of the offering are being
used for general corporate purposes and to increase capital levels of the
Company and its subsidiaries. The securities qualify as Tier I capital under the
capital guidelines of the Federal Reserve.
On June 19, 1998, the Company placed $50.0 million in aggregate liquidation
amount of 7.65% Capital Securities due June 2028, using HUBCO Capital Trust II,
a statutory business trust formed under the laws of the State of Delaware. The
sole asset of the trust, which is the obligor on the Series B Capital
Securities, is $51.5 million principal amount of 7.65% Junior Subordinated
Debentures due 2028 of the Company. The net proceeds of the offering are being
used for general corporate purposes and to increase capital levels of the
Company and its subsidiaries. The securities qualify as Tier I capital under the
capital guidelines of the Federal Reserve.
NOTE F -- RECENT ACCOUNTING STANDARDS
Effective January 1, 1998, the Company adopted SFAS No. 130, "Reporting
Comprehensive Income", which establishes standards for the reporting of
comprehensive income and its components in a full set of general purpose
financial statements. The Company has elected to display Consolidated Statements
of Income and Consolidated Statements of Comprehensive Income separately for the
disclosed periods. Comprehensive income is displayed on the Consolidated Balance
Sheets and Consolidated Statements of Changes in Stockholders' Equity as a
separate item entitled accumulated other comprehensive income (loss). The
following is a reconciliation of the tax effect allocated to each component of
comprehensive income for the periods presented (in thousands):
<TABLE>
<CAPTION>
For the three-months ended
March 31, 1999
--------------------------------------
Before Tax
Tax Benefit Net of Tax
Amount (Expense) Amount
--------- --------- ----------
<S> <C> <C> <C>
Unrealized security gains (losses) arising during the period .... $ (13,238) $ 4,781 $ (8,457)
Less: reclassification adjustment for gains realized in net
income ........................................................ 914 (320) 594
--------- ------- --------
Net change during period ........................................ $ (14,152) 5,101 $ (9,051)
--------- ------- --------
<CAPTION>
For the three-months ended
March 31, 1998
--------------------------------------
Before Tax
Tax Benefit Net of Tax
Amount (Expense) Amount
--------- --------- ----------
Unrealized security gains (losses) arising during the period .... $ (320) $ 128 $ (192)
Less: reclassification adjustment for gains realized in net
income ........................................................ 2,387 (955) 1,432
--------- ------- --------
Net change during period ........................................ $ (2,707) 1,083 $ (1,624)
--------- ------- --------
</TABLE>
9
<PAGE>
NOTE F -- RECENT ACCOUNTING STANDARDS (CONTINUED)
Effective January 1, 1998, the Company adopted SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information", which requires that a public
business enterprise report financial and descriptive information about its
reportable operating segments. The Company's banking subsidiary, Hudson United
Bank, which meets the criteria of SFAS No. 131, operates in one segment called
financial services. Hudson United Bancorp, the bank's holding company, is not a
reportable segment because it does not exceed any of the quantitative
thresholds.
Effective for the fiscal year ended December 31, 1998, the Company adopted SFAS
No. 132, "Employers' Disclosures about Pensions and Other Postretirement
Benefits," which standardizes the disclosure requirements for pension and other
post retirement benefits to the extent practicable and requires additional
information on changes in the benefit obligations and fair values of plan
assets.
The Financial Accounting Standards Board (FASB) issued SFAS No. 133, "Accounting
for Derivative Instruments and Hedging Activities," establishing standards for
the accounting and reporting of derivatives. The statement is effective for
fiscal years beginning after June 15, 1999; earlier application is permitted.
The Company has elected not to adopt this statement prior to its effective date.
The Company does not expect that application of this statement will have a
material effect on its financial position or results of operations.
10
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This financial review presents management's discussion and analysis of financial
condition and results of operations. It should be read in conjunction with the
Company's Consolidated Financial Statements and the accompanying notes. All
dollar amounts, other than per share information, are presented in thousands
unless otherwise noted.
The financial statements for the comparative periods presented herein have been
restated to reflect the acquisitions that have been accounted for on the pooling
of interests accounting method during the periods presented herein. The Bank of
Southington was acquired on January 8, 1998, Poughkeepsie Financial Corporation
was acquired on April 24, 1998, MSB Bancorp was acquired on May 29, 1998, IBS
Financial Corporation was acquired on August 14, 1998, Community Financial
Holding Corporation was acquired on August 14, 1998, and Dime Financial
Corporation was acquired on August 21, 1998. These acquisitions were accounted
for on the pooling of interests method, and accordingly, the consolidated
financial statements have been restated to include these institutions for all
periods presented. All share data has been retroactively restated to reflect the
shares issued in the aforementioned transactions including restatement of all
prior periods. In addition, the Company acquired Security National Bank on
February 5, 1998, 21 branches of First Union National Bank on June 26, 1998, two
branches of First Union National Bank on July 24, 1998, and one branch from
First International Bank on March 26, 1999, all of which were accounted for
under the purchase method and thus operations and earnings are reflected in the
Company's results subsequent to the date of acquisition. The balance sheet and
income statement comparisons are influenced by these purchase transactions.
STATEMENTS REGARDING FORWARD-LOOKING INFORMATION
This document contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking statements can
be identified by the use of words such as "believes," "expects" and similar
words or variations. Such statements are not historical facts and involve
certain risks and uncertainties. Actual results may differ materially from the
results discussed in these forward-looking statements. Factors that might cause
a difference include, but are not limited to, changes in interest rates,
economic conditions, deposit and loan growth, loan loss provisions, customer
retention, failure to realize expected cost savings or revenue enhancements from
acquisitions, or failure of the Company's Year 2000 compliance program to
effectively address year 2000 computer problems. The Company assumes no
obligation for updating any such forward-looking statements at any time.
YEAR 2000 COMPLIANCE
Hudson United Bancorp has been involved since 1996 in preparing its computer
systems and applications to meet the challenge of the new millennium. The
Company, in conjunction with its data processing subsidiary, has established a
"Year 2000 Team" which is responsible for ensuring implementation of the
required changes to avoid business disruption. The process involves analyzing
and replacing existing computer hardware and software as needed. The Company is
currently communicating with customers and external providers to determine their
status regarding Year 2000 issues. Additionally, the Company is assessing how
problems with third party computer systems may impact its business operations.
To date, the Company has not identified any material third party problems, but
will continue to assess the situation through 1999.
The Company's review of computer and noninformation technology systems was
completed by December 31, 1998. This will allow 1999 for testing and making
adjustments, as necessary, to fine-tune our systems and deal with any customer
or third party developments. Testing is proceeding satisfactorily and is on
schedule.
The Company has been informed that its joint venture partner has decided to
terminate their interest in a computer processing joint venture. In addition,
the Company has entered into a letter of intent and is presently in discussions
with a third-party provider to outsource the Company's internal processing
systems. The potential provider is an industry leader that is actively
conducting its own Year 2000 assessment and testing program. The Company
anticipates a second quarter decision on the ultimate outcome of these matters.
The estimated total cost to become Year 2000 compliant is $5 million. Through
March 31, 1999, the Company has incurred approximately $4.3 million of the above
costs. The Company anticipates most of the remaining costs will be incurred by
mid-year 1999.
11
<PAGE>
A failure by Hudson United Bancorp or by third parties on whom the Company
relies for support to correct Year 2000 issues may cause disruption in the
Company's business operations that could result in reduced revenue, increased
operating costs and other adverse effects. Additionally, to the extent
borrowers' financial positions are weakened as a result of Year 2000 issues,
credit quality could be impacted. It is not possible to forecast with a
reasonable degree of certainty all the negative impacts that could result from a
failure of the Company or third parties to become fully Year 2000-compliant or
whether such effect could have a material impact on Hudson United Bancorp. The
Company has developed contingency plans to mitigate the disruption to business
operations that may occur if Year 2000 compliance is not fully achieved by all
parties.
RESULTS OF OPERATIONS
OVERVIEW
Net income for the three-month period ended March 31, 1999 was $24.6 million
compared to net income of $14.9 million for the same period in 1998. Fully
diluted earnings per share amounted to $0.61 for the 1999 first quarter and
$0.35 for the 1998 first quarter. The 1998 quarter included merger-related and
restructuring charges that amounted to $2.3 million after-tax. Excluding the
charges, net income for the 1998 period was $17.2 million and fully diluted
earnings per share was $0.41. The increase in earnings was primarily the result
of higher noninterest income, lower noninterest expense, and a lower loan loss
provision. The Company's successful integration of its 1998 acquisitions was a
major contributor to the improved earnings performance. Return on average assets
and return on average equity for the three months ended March 31, 1999 was 1.52%
and 23.10%, respectively. In the first quarter of 1998, return on average assets
was 0.95% and return on average equity was 11.84%. Excluding the merger related
and restructuring charges in the 1998 period, return on average assets was 1.09%
and return on average equity was 13.67%. At March 31, 1999, book value per
common share was $10.79 and the Tier 1 leverage ratio was 6.82%.
NET INTEREST INCOME
Net interest income amounted to $62.5 million for both three-month periods ended
March 31, 1999 and 1998. Average interest-earning assets were $172 million
higher in the first quarter of 1999 compared to the same period in 1998. At
March 31, 1999, total interest-earning assets amounted to $6.5 billion compared
to an average of $6.1 billion for the first quarter of 1999. However, this
positive impact on net interest income was offset by an 11 basis point decline
in the net interest margin to 4.16% in the 1999 period. Interest income declined
by $3.8 million in the first quarter of 1999 compared to the first quarter of
1998. This was primarily due to a decline in interest income on loans, which was
mainly the result of the lower 1999 interest rate environment. Partially
offsetting the decline was higher income on investment securities, which was due
to higher average volumes in the 1999 period. Interest expense in the 1999 first
quarter was $3.8 million below the 1998 first quarter due primarily to a more
favorable deposit mix and lower average deposits in 1999 and the impact of the
lower rate environment in that period. Increased borrowing expense, due to
higher average volumes, partially offset the decline in other categories.
PROVISION FOR POSSIBLE LOAN LOSSES
The provision for possible loan losses was $2.5 million and $6.3 million for the
three-month periods ended March 31, 1999 and 1998, respectively. The decline in
the provision was primarily due to the inclusion in the 1998 period of a $3.5
million provision taken by the former Poughkeepsie Financial Corporation to
bring its reserve policy in line with that of Hudson United Bancorp. The
allowance for possible loan losses amounted to $54.5 million at March 31, 1999
compared to $53.5 million at year-end 1998. The allowance represented 1.59% and
1.58% of total loans at March 31, 1999 and December 31, 1998, respectively. The
allowance was 315% of nonaccrual loans at March 31, 1999 and 303% of nonaccrual
loans at December 31, 1998. The Company performs an evaluation of the adequacy
of the allowance for possible loan losses each quarter. The results of this
analysis and the projection of potential credit losses and economic conditions
are some of the factors which determine the required quarterly provision.
Management believes that the allowance for possible loan losses at March 31,
1999 of $54.5 million is adequate.
12
<PAGE>
The following table presents the composition of non-performing assets and loans
past due 90 days or more and accruing and selected asset quality ratios at the
dates indicated
<TABLE>
<CAPTION>
ASSET QUALITY SCHEDULE
(In Thousands)
-------------------------
3/31/99 12/31/98
----------- -----------
<S> <C> <C>
Nonaccrual Loans:
Commercial ..................................... $ 4,879 $ 4,852
Real Estate .................................... 10,313 10,683
Consumer ....................................... 2,134 2,094
------- -------
Total Nonaccrual Loans ....................... 17,326 17,629
Renegotiated Loans ............................... 1,865 3,269
------- -------
Total Nonperforming Loans .................... 19,191 20,898
Other Real Estate Owned .......................... 898 3,727
------- -------
Total Nonperforming Assets ................... $20,089 $24,625
======= =======
Nonaccrual Loans to Total Loans .................. 0.51% 0.52%
Nonperforming Assets to Total Assets ............. 0.29% 0.36%
Allowance for Loan Losses to Nonaccrual Loans .... 315% 303%
Allowance for Loan Losses to Nonperforming Loans . 284% 256%
Loans Past Due 90 Days or More and Accruing
Commercial ..................................... $ 3,143 $ 2,340
Real estate .................................... 6,390 5,547
Consumer ....................................... 2,400 2,470
Credit card .................................... 9,960 3,126
------- -------
Total Past Due Loans ......................... $21,893 $13,483
======= =======
</TABLE>
13
<PAGE>
The following table presents the activity in the allowance for possible loan
losses for the periods indicated:
<TABLE>
<CAPTION>
Summary of Activity in the Allowance
Broken Down by Loan Category
------------------------------------
Three Months Ended Year Ended
3/31/99 12/31/98
------------------------------------
(Dollars in thousands)
<S> <C> <C>
Amount of Loans Outstanding at Period End ....... $ 3,424,314 $ 3,386,810
=========== ===========
Daily Average Amount of Loans Outstanding ....... $ 3,381,333 $ 3,521,561
=========== ===========
ALLOWANCE FOR LOAN LOSSES
Balance at beginning of year .................... $ 53,499 $ 65,858
Loans charged off:
Real estate mortgages ......................... 273 8,050
Commercial .................................... 219 2,498
Consumer ...................................... 2,391 11,457
Write down of Assets held for sale (1) ........ -- 9,521
----------- -----------
Total loans charged off ..................... 2,883 31,526
----------- -----------
Recoveries:
Real estate mortgages ......................... 382 651
Commercial .................................... 363 669
Consumer ...................................... 623 1,523
----------- -----------
Total recoveries ............................ 1,368 2,843
----------- -----------
Net loans charged off ........................... 1,515 28,683
Allowance of acquired companies ................. 20 1,950
Provision for loan losses ....................... 2,500 14,374
----------- -----------
Balance at end of period ........................ $ 54,504 $ 53,499
=========== ===========
Ratio of Annualized Net Loans Charged Off During
Period to Average Loans Outstanding ........... 0.18% 0.81%
=========== ===========
</TABLE>
- ----------
(1) The writedown of assets held for sale pertained to the planned disposal of
$54 million nonaccrual loans.
14
<PAGE>
NONINTEREST INCOME
Noninterest income, excluding security gains, increased to $16.6 million for the
first quarter of 1999 compared to $11.5 million in the first quarter of 1998.
The increase reflects higher income from the Shoppers Charge and mortgage
divisions and increased sales of investment products. Security gains for the
three months ended March 31, 1999 amounted to $0.9 million compared to $2.4
million for the three month period ended March 31, 1998.
NONINTEREST EXPENSE
Noninterest expense for the first quarter of 1999 was $39.7 million compared to
$46.9 million in the first quarter of 1998. The amount for 1998 includes $2.6
million of merger related restructuring costs that were recorded in that period.
The decrease primarily reflects cost savings resulting from the integration of
the 1998 acquisitions. Salaries and employee benefits experienced the largest
decline, with a 25% favorable variance. The efficiency ratio was 46.2% for the
three months ended March 31, 1999 compared to 55.5% for the three months ended
March 31, 1998. The Company's effective tax rate for the three-month period
ended March 31, 1999 was 35%. The effective tax rate for the 1998 first quarter
was 36% and 35% when merger related and restructuring costs are excluded.
FINANCIAL CONDITION
Total assets amounted to $7.0 billion at March 31, 1999, an increase of $267
million or 4% from $6.8 billion at December 31, 1998. At March 31, 1999, total
loans were $3.4 billion and total investment securities were $3.1 billion. These
balances represented increases of $38 million for loans and $169 million for
investment securities when compared to year-end 1998. The increase in credit
card loans of $99 million and the increase in credit card loans past due 90 days
or more and still accruing of $7 million, at March 31, 1999 compared to December
31, 1998, was primarily the result of the purchase of two credit card
portfolios. The loan mix continued to change, as residential and commercial
mortgage loans amounted to 64% of total loans at March 31, 1999, which was lower
than the 67% of total loans at year-end. The increase in the investment
securities portfolio was due primarily to leveraging employed to utilize the
Company's capital position. Intangibles, net of amortization, increased from
$79.0 million at December 31, 1998 to $84.9 million at March 31, 1999 due
primarily to the addition of the goodwill created from the First International
Bank branch acquisition.
Deposits were $4.9 billion at March 31, 1999 compared to $5.1 billion at
December 31, 1998. Borrowings increased to $1.3 billion at March 31, 1999
compared to $822 million at December 31, 1998. The increase in borrowings was
mainly the result of the higher asset level at the March 1999 period end. Total
stockholders' equity at March 31, 1999 was $427 million compared to $457 million
at December 31, 1998. The change in stockholders' equity is primarily
attributable to the purchase of $41 million of treasury shares.
The Company is not aware of any current recommendations by the regulatory
authorities which would have a material adverse effect on the Company's capital
resources or operations. The capital ratios for the Company at March 31, 1999,
and the minimum regulatory guidelines for such capital ratios for qualification
as a well-capitalized institution are as follows:
Ratios at Regulatory
March 31, 1999 Guidelines
-------------- ----------
Tier I Risk-Based Capital ..... 11.51% 6.0%
Total Risk-Based Capital ...... 15.29% 10.0%
Tier 1 Leverage Ratio ......... 6.82% 4.0%
15
<PAGE>
PART II. OTHER INFORMATION
Items 1 through 3 are not applicable or the responses are negative.
Item 4: Submission of Matters to a Vote of Security Holders
(a) The Annual Meeting of Shareholders of Hudson United Bancorp was held on
April 21, 1999.
(b) The names of the directors who are nominees for election for the 1999
Annual Meeting and the names of the directors whose terms extend beyond the
1999 Annual Meeting are set forth in the tables below.
Nominees for 1999 Annual Meeting:
W. Peter McBride
Bryant D. Malcolm
James E. Schierloh
John H. Tatigian, Jr.
Noel De Cordova, Jr., Esq.
Directors whose terms extend beyond this Annual Meeting:
Kenneth T. Neilson Donald P. Calcagnini
Robert J. Burke Thomas R. Farley, Esq.
Charles F. X. Poggi David A. Rosow
Joan David Sister Grace Frances Strauber
(c) The following is a brief description as well as the tabulation of votes for
each of the matters which were voted upon at the 1999 Annual Meeting.
1. Election of the following five persons as directors of Hudson United
Bancorp:
For Authority Withheld
--------- ------------------
W. Peter McBride ........... 34,598,450 513,283
Bryant D. Malcolm .......... 34,609,696 502,007
James E. Schierloh ......... 34,614,210 497,493
John H. Tatigian, Jr. ...... 34,621,044 490,659
Noel De Cardova, Jr., Esq. . 34,551,868 559,834
2. An amendment to the certificate of incorporation to increase the
amount of authorized common stock to 100,000,000 shares from
54,636,350 and increase the amount of authorized preferred stock to
25,000,000 shares from 10,609,000.
Votes
-----
For ................... 26,896,719
Against ............... 8,016,735
Authority Withheld .... 198,240
16
<PAGE>
3. An amendment to the certificate of incorporation to change the name of
the company from HUBCO, Inc. to Hudson United Bancorp.
Votes
-----
For ................... 34,359,282
Against ............... 374,323
Authority Withheld .... 78,307
4. Approval of the 1999 Hudson United Bancorp stock option plan, which
generally gives a committee of three or more non-employee directors of
the Company the authority to grant to employees of the Company
incentive and non-qualified stock options to purchase up to a maximum
of 1,000,000 shares with options to purchase a maximum of 250,000
shares to be issued or granted to any one employee.
Votes
-----
For ................... 32,340,142
Against ............... 2,402,532
Authority Withheld .... 369,018
(d) not applicable
Item 5: not applicable
Item 6: Exhibits and Reports on Form 8-K
(a) Exhibits
(3)(A) The Certificate of Incorporation of the Company in effect on
May 11, 1999.
(3)(B) The By-Laws of HUBCO, Inc. (Incorporated by reference from the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995, Exhibit (3b)).
(b) Reports on Form 8-K
(1) On March 29, 1999, the Company (under the name HUBCO, Inc.) filed a
Form 8-K Item 5 (date of earliest event--March 26, 1999), containing
the Company's press release announcing the completion of its purchase
of the Hartford branch of First International Bank.
(2) On April 19, 1999, the Company (under the name HUBCO, Inc.) filed a
Form 8-K Item 5 (date of earliest event--April 13, 1999), containing
the Company's press release reporting earnings for the first quarter
of 1999.
(3) On April 21, 1999, Hudson United Bancorp filed a Form 8-K Item 5 (date
of earliest event--April 21,1999), to announce that Hudson United
Bancorp amended its Certificate of Incorporation to: (i) change its
name to Hudson United Bancorp, and (ii) increase the number of
authorized shares of its capital stock. The Company also announced
that it will list its shares on the New York Stock Exchange ("NYSE")
under the symbol "HU".
(4) On April 22, 1999, Hudson United Bancorp filed a Form 8-K Item 5 (date
of earliest event--April 21, 1999), to announce the declaration of a
cash dividend of $0.25 per common share, payable June 1, 1999 to
holders of record as of the close of business on May 17, 1999.
17
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities and 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.
May 14, 1999 /S/ KENNETH T. NEILSON
- -------------------------- ---------------------------------------------
Date Kenneth T. Neilson
Chairman, President & Chief Executive Officer
May 14, 1999 /S/ JOSEPH F. HURLEY
- -------------------------- ---------------------------------------------
Date Joseph F. Hurley
Executive Vice President &
Chief Financial Officer
18
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 242,368
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 8,819
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 2,422,566
<INVESTMENTS-CARRYING> 642,314
<INVESTMENTS-MARKET> 638,772
<LOANS> 3,424,314
<ALLOWANCE> 54,504
<TOTAL-ASSETS> 7,046,067
<DEPOSITS> 4,931,967
<SHORT-TERM> 1,292,644
<LIABILITIES-OTHER> 194,287
<LONG-TERM> 200,000
<COMMON> 72,246
0
0
<OTHER-SE> 354,923
<TOTAL-LIABILITIES-AND-EQUITY> 7,046,067
<INTEREST-LOAN> 68,862
<INTEREST-INVEST> 41,956
<INTEREST-OTHER> 324
<INTEREST-TOTAL> 111,142
<INTEREST-DEPOSIT> 31,984
<INTEREST-EXPENSE> 48,595
<INTEREST-INCOME-NET> 62,547
<LOAN-LOSSES> 2,500
<SECURITIES-GAINS> 914
<EXPENSE-OTHER> 39,697
<INCOME-PRETAX> 37,847
<INCOME-PRE-EXTRAORDINARY> 37,847
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 24,601
<EPS-PRIMARY> 0.62
<EPS-DILUTED> 0.61
<YIELD-ACTUAL> 4.16
<LOANS-NON> 17,326
<LOANS-PAST> 21,893
<LOANS-TROUBLED> 1,865
<LOANS-PROBLEM> 41,084
<ALLOWANCE-OPEN> 53,499
<CHARGE-OFFS> 2,833
<RECOVERIES> 1,368
<ALLOWANCE-CLOSE> 54,504
<ALLOWANCE-DOMESTIC> 54,504
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1,709
</TABLE>
