<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1996
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For transition period from __________ to ___________________
Commission File Number: 0-26086
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YARDVILLE NATIONAL BANCORP
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(Exact name of registrant as specified in its charter)
NEW JERSEY 22-2670267
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3111 Quakerbridge Road, Mercerville, New Jersey 08619
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(Address of principal executive offices) (Zip Code)
(609) 585-5100
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name, former address and former fiscal year,
if changed from 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( )
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of May 1, 1996
Common Stock, no par value 2,419,910
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Class Number of shares outstanding
<PAGE>
INDEX
YARDVILLE NATIONAL BANCORP AND SUBSIDIARY
PART I FINANCIAL INFORMATION PAGE NO.
- - ----------------------------- --------
Item 1. Financial Statements
Consolidated Statements of Condition
March 31, 1996 and December 31, 1995 3
Consolidated Statements of Income
Three months ended March 31, 1996
and 1995 4
Consolidated Statements of Cash Flows
Three months ended March 31, 1996
and 1995 5
Notes to Consolidated Financial Statements 6-7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-15
PART II OTHER INFORMATION
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Item 6. Exhibits and Reports on Form 8-K 16
SIGNATURES 17
INDEX TO EXHIBITS 18
Exhibit 11 Statement re Computation of Per Share
Earnings 19-20
Exhibit 27.1 Financial Data Schedule 21-22
2
<PAGE>
Yardville National Bancorp and Subsidiary
Consolidated Statements of Condition
(unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
- - ------------------------------------------------------------------------------------------
(in thousands, except share data) 1996 1995
- - ------------------------------------------------------------------------------------------
<S> <C> <C>
Assets:
Cash and due from banks $ 9,689 $ 10,040
Federal funds sold 7,470 2,795
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Cash and Cash Equivalents 17,159 12,835
- - ------------------------------------------------------------------------------------------
Interest bearing deposits 4,154 1,033
Securities available for sale 90,937 98,469
Investment securities 34,576 35,384
Loans 262,918 245,054
Less: Allowance for loan losses (3,858) (3,677)
- - ------------------------------------------------------------------------------------------
Loans, net 259,060 241,377
Bank premises and equipment, net 4,964 4,026
Other real estate 659 625
Other assets 10,408 9,366
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Total Assets $ 421,917 $ 403,115
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Liabilities and Stockholders' Equity:
Deposits
Non-interest bearing $ 49,032 $ 46,682
Interest bearing 261,450 256,290
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Total Deposits 310,482 302,972
Borrowed funds
Securities sold under agreements to repurchase 59,055 54,830
Other 16,215 10,391
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Total Borrowed Funds 75,270 65,221
Other liabilities 3,802 3,205
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Total Liabilities $ 389,554 $ 371,398
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Stockholders' equity
Preferred stock: no par value
Authorized 1,000,000 shares, none issued
Common stock: no par value
Authorized 6,000,000 shares
Issued and outstanding 2,395,171 shares in 1996
and 2,349,592 shares in 1995 16,870 16,409
Surplus 2,205 2,205
Undivided Profits 13,731 12,997
Unrealized gain (loss) - securities available for sale (443) 106
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Total Stockholders' Equity 32,363 31,717
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Total Liabilities and Stockholders' Equity $ 421,917 $ 403,115
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</TABLE>
See Accompanying Notes to Unaudited Consolidated Financial Statements.
3
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Yardville National Bancorp and Subsidiary
Consolidated Statements of Income
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
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(in thousands, except per share amounts) 1996 1995
- - ----------------------------------------------------------------------------------------------
INTEREST INCOME:
<S> <C> <C>
Interest and fees on loans $ 5,887 $ 4,842
Interest on deposits with banks 34 5
Interest on securities available for sale 1,403 380
Interest on investment securities:
Taxable 410 468
Exempt from Federal income tax 96 94
Interest on Federal funds sold 57 89
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Total Interest Income 7,887 5,878
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INTEREST EXPENSE:
Interest on savings account deposits 972 1,007
Interest on certificates of deposit of $100,000 or more 203 263
Interest on other time deposits 1,617 1,083
Interest on borrowed funds 975 173
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Total Interest Expense 3,767 2,526
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Net Interest Income 4,120 3,352
Less provision for loan losses 265 180
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Net Interest Income After Provision for Loan Losses 3,855 3,172
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NON-INTEREST INCOME:
Service charges on deposit accounts 290 270
Losses on sales of mortgages, net - (1)
Securities losses, net (21) -
Other non-interest income 241 205
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Total Non-Interest Income 510 474
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NON-INTEREST EXPENSE:
Salaries and employee benefits 1,581 1,387
Occupancy expense, net 220 164
Equipment 177 113
Other non-interest expense 840 854
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Total Non-Interest Expense 2,818 2,518
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Income before income tax expense 1,547 1,128
Income tax expense 555 372
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Net Income $ 992 $ 756
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EARNINGS PER SHARE:
Primary $ 0.40 $ 0.40
Fully diluted $ 0.40 $ 0.40
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Weighted average shares outstanding 2,530 2,047
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</TABLE>
See Accompanying Notes to Unaudited Consolidated Financial Statements.
4
<PAGE>
Yardville National Bancorp and Subsidiary
Consolidated Statements of Cash Flows
(unaudited)
<TABLE>
<CAPTION>
Three months ended March 31,
- - -----------------------------------------------------------------------------------------------------
(in thousands) 1996 1995
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<S> <C> <C>
Cash Flows from Operating Activities:
Net Income $ 992 $ 756
Adjustments:
Provision for loan losses 265 180
Depreciation 173 105
Amortization and accretion 130 43
Securities losses, net 21 -
Writedown of other real estate 25 1
Increase in other assets (676) (1,175)
Increase in other liabilities 597 923
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Net Cash Provided by Operating Activities 1,527 833
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Cash Flows from Investing Activities:
Net decrease (increase) in interest bearing deposits (3,121) 651
Purchase of securities available for sale (28,153) (6,685)
Maturities, calls, and paydowns of securities available for sale 10,612 305
Proceeds from sales of securities available for sale 24,049 -
Proceeds from maturities and paydowns of investment securities 767 718
Net increase in loans (18,008) (19,346)
Expenditures for bank premises and equipment (1,111) (247)
Capital improvements to other real estate - (12)
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Net Cash Used by Investing Activities (14,965) (24,616)
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Cash Flows from Financing Activities:
Net increase in non-interest bearing
demand, money market, and saving deposits 6,477 7,820
Net increase in certificates of deposit 1,033 9,940
Net increase in borrowed funds 10,049 21,143
Proceeds from issuance of common stock 461 8
Dividends paid (258) (139)
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Net Cash Provided by Financing Activities 17,762 38,772
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Net increase in cash and cash equivalents 4,324 14,989
Cash and cash equivalents as of beginning of period 12,835 11,100
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Cash and Cash Equivalents as of End of Period $ 17,159 $ 26,089
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Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for:
Interest expense $ 3,789 $ 2,047
Income taxes 150 130
- - -----------------------------------------------------------------------------------------------------
Supplemental Schedule of Non-cash Financing Activities:
</TABLE>
During the three month period ended March 31, 1996 the Corporation
transferred $60,000, net of charge offs, from loans to other real estate.
See Accompanying Notes to Unaudited Consolidated Financial Statements.
5
<PAGE>
Yardville National Bancorp and Subsidiary
Notes to Consolidated Financial Statements
Three Months Ended March 31, 1996
(Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Financial Statement Presentation
The consolidated financial statements have been prepared in conformity
with generally accepted accounting principles. In preparing the financial
statements, management is required to make estimates and assumptions that affect
the reported amounts of assets and liabilities as of the date of the balance
sheet and revenues and expenses for the period. Actual results could differ
significantly from those estimates.
The consolidated financial data as of and for the three months ended
March 31, 1996 and 1995 include, in the opinion of management, all adjustments,
consisting of only normal recurring accruals, necessary for a fair presentation
of such periods. The consolidated financial data for the interim periods
presented are not necessarily indicative of the results of operations that might
be expected for the entire year ending December 31, 1996.
Material estimates that are particularly susceptible to significant
change in the near-term relate to the determination of the allowance for loan
losses and the valuation of real estate acquired in connection with foreclosures
or in satisfaction of loans. In connection with the determination of the
allowance for loan losses and the valuation of other real estate, management
obtains independent appraisals for significant properties.
Consolidation
The consolidated financial statements include the accounts of Yardville
National Bancorp (the "Corporation") and its sole subsidiary, the Yardville
National Bank (the "Bank") and the Bank's wholly owned subsidiary, The
Yardville National Investment Corporation. All significant intercompany accounts
and transactions have been eliminated.
6
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Allowance for Loan Losses
For financial reporting purposes, the provision for loan losses charged to
operating expense is determined by management and is based upon a periodic
review of the loan portfolio, past experience, the economy, and other factors
that may affect the borrower's ability to repay the loan. This provision is
based on management's estimates, and actual losses may vary from these
estimates. These estimates are reviewed and, as adjustments become necessary,
they are reported in the periods in which they become known. Management believes
that the allowance for losses on loans is adequate. While management uses
available information to recognize losses on loans and other real estate, future
additions to the allowance may be necessary based on changes in economic
conditions, particularly in New Jersey. In addition, various regulatory
agencies, as an integral part of their examination process, periodically review
the Corporation's allowance for losses on loans and the valuation of other real
estate. Such agencies may require the Bank to recognize additions to the
allowance or adjustments to the carrying value of other real estate based on
their judgments about information available to them at the time of their
examination.
7
<PAGE>
YARDVILLE NATIONAL BANCORP AND SUBSIDIARY
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
consolidated financial statements and the accompanying notes. The term
"Yardville" as used herein refers to the Corporation together with its sole
subsidiary, the Bank.
FINANCIAL CONDITION
Assets
Total consolidated assets at March 31, 1996 totaled $421,917,000, an increase of
$18,802,000 or 4.7%, compared to $403,115,000 at December 31, 1995. The growth
in Yardville's asset base during the first quarter of 1996 was, in part, the
product of a strategy to improve the profitability of the organization through
relationship banking and the origination of quality loans in Yardville's
marketplace. Yardville's asset base includes investments of approximately
$59,000,000 purchased since June 1995 utilizing repurchase agreements.
Securities
Total securities decreased by $8,340,000 in the first three months of 1996
compared to year end 1995. The investment portfolio through the maturity and
sales of U.S. Treasuries, calls of U.S. agency securities and principal paydowns
from mortgage-backed securities provided funding for strong first quarter loan
growth.
At March 31, 1996 the amortized cost of investment securities classified as held
to maturity was $34,576,000, compared to $35,384,000 at December 31, 1995, a
decrease of $808,000 or 2.3%.
Net unrealized losses as of March 31, 1996 in Yardville's available for sale
securities portfolio were $737,000. Net unrealized losses of $443,000, net of
tax effect, were reported as a reduction of stockholders' equity at March 31,
1996. The available for sale portfolio represents 73% of the entire investment
portfolio and provides a secondary source of liquidity, except those securities
purchased utilizing repurchase agreements.
8
<PAGE>
Federal Funds
At March 31, 1996 Federal funds sold totaled $7,470,000,an increase of
$4,675,000 as compared to $2,795,000 at December 31, 1995. Federal funds sold
levels reflect management's desire to maintain adequate short term liquidity
funds.
Loans
Total loans, net of unearned discounts, increased by $17,864,000 or 7.3%, to
$262,918,000 at March 31, 1996 compared to $245,054,000 at year end 1995.
Yardville's loan portfolio represented 62.3% of assets at March 31, 1996
compared to 60.8% of assets at December 31, 1995.
Yardville's lending focus continues to be centered on commercial loans,
owner-occupied commercial mortgage loans and tenanted commercial real estate
loans.
Yardville showed positive results throughout its loan portfolio for the three
months ended March 31, 1996 as a result of management's emphasis on customer
service and relationships and taking advantage of opportunities associated with
consolidation in the banking industry, particularly in Yardville's markets. On a
component basis, for the three month period ended March 31, 1996, commercial
loan balances increased 3.3%. Real estate - commercial mortgages and real
estate - residential mortgages increased 25.6% and 2.9%, respectively, for the
first quarter of 1996. The increase in actual dollars in these loans since year
end 1995 is $18,783,000 and $2,120,000, respectively. The increase in real
estate-mortgage loans in the first quarter was reflective of lower mortgage
rates early in 1996. Consumer loan balances decreased 5.9% through the
first three months of 1996.
Liabilities
Yardville's deposit base is the principal source of funds supporting interest
earning assets. Total deposits amounted to $310,482,000 at March 31, 1996
compared to $302,972,000 at December 31, 1995, an increase of 2.5%.
Growth in Yardville's deposit base continues in higher yielding certificates of
deposit (CD's) and premium money market accounts, both higher cost funding
sources. Average time deposits, including CD's of $100,000 or more, increased
$10,584,000 or 8.9% to total $129,742,000 for the three month period ended March
31, 1996 as compared to $119,158,000 at year end 1995. Interest bearing and
non-interest bearing deposits have increased 2.0% and 5.0%, respectively, in the
first three months of 1996. At March 31, 1996 interest bearing and non-interest
bearing deposits totaled $261,450,000 and $49,032,000, respectively.
9
<PAGE>
Borrowed funds totaled $75,270,000 at March 31, 1996 compared to $65,221,000 at
December 31, 1995. The growth in the first quarter of 1996 was due to the
increase of $4,225,000 in repurchase agreements and an additional $5,000,000 in
Federal Home Loan Bank (FHLB) advances to strengthen short term liquidity and
support core deposits in funding balance sheet growth. Through March 31, 1996
Yardville has $15,000,000 outstanding in FHLB advances all with a maturity of
less than 1 year.
Yardville has the availability to borrow up to $16,000,000 from the FHLB through
its line of credit program. In addition, the bank is eligible to borrow up to
30% of assets under the FHLB advance program subject to FHLB stock level
requirements, collateral requirements and individual advance proposals based on
FHLB credit standards. Yardville also has the ability to borrow at the Federal
Reserve discount window along with agreements to use two unsecured federal funds
lines of credit with two of its correspondent banks for daily funding needs.
Management's strategy, however, is to further build the bank's core deposit base
to fund asset growth and use borrowed funds to meet short term liquidity needs
and as an additional source of funding for the loan and investment portfolios.
Capital
Total stockholders' equity of $32,363,000 at March 31, 1996 increased $646,000
or 2.0% from $31,717,000 at December 31, 1995. This increase resulted from (i)
earnings of $992,000 over the first three months of 1996 less dividend payments
of $258,000 and a negative equity adjustment of $549,000 for the unrealized
loss on securities available for sale, (ii) proceeds of $327,000 from the
exercise of options to purchase shares of the common stock, no par value, in
the Corporation (the "Common Stock") and (iii) proceeds of $134,000 from the
exercise of Class A Warrants of the Corporation (the "Warrants").
Warrants to purchase 526,950 shares of Common Stock were outstanding at March
31, 1996. 8,259 shares of Common Stock were issued upon exercise of Warrants
during the first quarter. The exercise price of the Warrants is calculated at
120% of consolidated book value ($16.21 until June 13, 1996) as defined and as
determined as of the calendar quarter immediately preceding the notice of
exercise. All Warrants will expire on June 13, 1996.
Yardville's leverage ratio was 7.8% at March 31, 1996 and at December 31, 1995.
At March 31, 1996 tier I and total tier I and II capital to risk weighted assets
were 11.4% and 12.7%, respectively. The risk based capital levels at year end
1995 were 12.0% and 13.2% for tier I and total risk based capital, respectively.
10
<PAGE>
The minimum regulatory requirements require financial institutions to have a
leverage ratio of 3.0%, a tier I risk-based ratio of 4.0% and a total tier I
and tier II ratio of 8.0%. A bank is considered "well capitalized" if it has a
minimum tier I and total risk-based capital ratios of 6% and 10%, respectively,
and a minimum tier I leverage ratio of 5%.
Credit risk
At March 31, 1996, nonperforming loans, consisting of loans 90 days or more past
due, nonaccruing loans and insubstance foreclosures, totaled $2,413,000 compared
to $2,819,000 at December 31, 1995. Other real estate owned at March 31, 1996
totaled $659,000 compared to $625,000 at December 31, 1995.
Total nonperforming assets decreased to $3,072,000 at March 31, 1996 compared to
$3,444,000 at year end 1995. Nonperforming assets as a percentage of total loans
were 1.17% at March 31, 1996. The decline in nonperforming assets is reflective
of an active strategy to reduce these assets and improve asset quality.
At March 31, 1996, the Bank's investment in impaired loans totaled $1,320,000
and the total allowance for loan losses related to those loans amounted to
$175,000. Of the total investment in impaired loans, $1,280,000 had related
allowance for credit losses of $175,000 and the remaining $40,000 had no
related allowance for credit losses.
The allowance for loan losses increased to $3,858,000, or 1.47% of total loans,
at March 31, 1996 compared to $3,677,000, or 1.50% of total loans, at year end
1995. The provision for loan losses through March 31, 1996 was $265,000,
reflective of the continued growth in the loan portfolio. Yardville had net loan
charge-offs of $84,000 for that time period. At March 31, 1996 the allowance for
loan losses covered 159.9% of nonperforming loans and 125.6% of nonperforming
assets. The allowance for loan losses, in management's judgment, is adequate to
provide for potential losses.
11
<PAGE>
RESULTS OF OPERATIONS
Net Income
Yardville reported net income of $992,000 for the three months ended March 31,
1996, an increase of $236,000 or 31.2%, from net income of $756,000 reported for
the same time period in 1995. The increase in net income for the three months
ended March 31, 1996 compared to the same period of 1995 was primarily
attributable to an increase in net interest income partially offset by increases
in the provision for loan losses and non-interest expenses.
On a per share basis, the net income was $.40 for the first three months of 1996
compared to the same $.40 for the first three months of 1995 on a fully diluted
basis. While net income rose by 31% in the first quarter of 1996 compared to the
first quarter of 1995, earnings per share stayed the same as a result of the
additional shares of Common Stock issued in the Corporation's 1995 underwritten
public offering. Earnings per share amounts for 1996 and 1995 were calculated
utilizing the modified treasury stock method. The modified treasury stock method
includes the potential dilutive effect of outstanding stock options and Warrants
not included in the treasury stock method.
Net Interest Income
Yardville's net interest income for the three months ended March 31, 1996 was
$4,120,000, an increase of 22.9% over the $3,352,000 for the comparable 1995
period. The principal factor contributing to the increase in net interest income
for the three months ended March 31, 1996 was an increase in interest income of
$2,009,000 resulting from a substantial increase in loan volume, particularly
commercial loans, offset by an increase in interest expense of $1,241,000 due to
higher levels of time deposits, a higher costing funding source and borrowed
funds.
The net interest margin (tax equivalent basis) between yields on average
interest earning assets and costs of average funding sources was 4.31% at March
31, 1996 compared to 4.87% at March 31, 1995. The decrease in the net interest
margin for the comparable period was principally due to two factors. In the
second half of 1995 management instituted a strategy to increase net interest
income by purchasing investments using repurchase agreements. At March 31, 1996
approximately $59,000,000 had been purchased. The targeted spread on this
strategy was 75 basis points after tax. This strategy, while successful in
increasing net interest income, had a negative impact on the net interest margin
of approximately 35 to 40 basis points. The increase in the cost of interest
bearing liabilities compared to interest earning assets also accounted, in part,
for the reduction in the net interest margin.
12
<PAGE>
Interest Income
For the three month period ended March 31, 1996 total interest income of
$7,887,000 increased $2,009,000 or 34.2% as compared to the same period a year
earlier. The increase in interest income is due to the higher volume of average
loan and securities assets. Average loans and securities increased $50,087,000
and $57,482,000 or 24.3% and 85.8%, respectively, for the three months ended
March 31, 1996 compared to the same 1995 period. The average yield on the loan
portfolio decreased 21 basis points for the comparable period due to Yardville's
competitive marketplace. The average yield on the securities portfolio,
conversely, increased 51 basis points. Interest on Federal funds sold decreased
$32,000 for the three month period ended March 31, 1996 due to decreases in
average balances of $1,667,000 and average yields of 65 basis points.
Overall, the yield on Yardville's interest earning assets decreased 27 basis
points to 8.15% for the period ended March 31, 1996 from 8.42% for the period
ended March 31, 1995 for the reasons discussed above.
Interest Expense
Total interest expense increased $1,241,000 or 49.1% to $3,767,000 for the three
months ended March 31, 1996 compared to $2,526,000 reported for the three months
ended March 31, 1995. The increase in interest expense for the comparable time
periods is the result of a larger deposit base, higher market interest rates and
significantly greater levels of borrowed funds. The average rate paid on
interest bearing liabilities increased 33 basis points for the time period
discussed. Deposit products continue to be competitively priced to increase the
Bank's deposit base and provide a source of funds for asset growth.
Average interest bearing liabilities amounted to $325,700,000 for the three
months ended March 31, 1996 compared to $234,918,000 for the three months ended
March 31, 1995. Increases in deposit account relationships, attributable in part
to increased commercial loan activity and community presence, are reflected in
the results. Average time deposits, a higher costing funding source, increased
$24,396,000 or 23.2% for the first quarter of 1996 compared to the first quarter
a year earlier.
Interest expense on borrowed funds increased significantly for the comparative
time periods. Interest expense increased $802,000 during the first quarter of
1996 compared to the same period in 1995 as a result of significantly
higher average balances. Through March 31, 1996 management has purchased
investments utilizing repurchase agreements totaling approximately $59,000,000.
13
<PAGE>
FHLB advances totaled $15,000,000 through the first quarter of 1996 to provide
liquidity and a source of funds for asset growth. Yardville's total borrowed
funds position at March 31, 1996 was $75,270,000 compared to $22,358,000 at
March 31, 1995. Management's strategy, however, is to further build the Bank's
core deposit base to fund asset growth and use borrowed funds to meet short
term liquidity needs and as an additional source of funding for the loan and
investment portfolios.
Provision For Loan Losses
Yardville provides for possible loan losses by a charge to current operations.
The provision for loan losses for the three month period ended March 31, 1996
was $265,000 compared to $180,000 for the three months ended March 31, 1995. The
1996 first quarter provision is reflective of the continued substantial growth
in the loan portfolio. Management believes that the allowance for loan losses is
adequate in relation to credit risk exposure levels.
Non-Interest Income
Total non-interest income was $510,000 for the first three months of 1996
compared to $474,000 for the same period in 1995. The increase of $36,000 or
7.6% is attributable to increased service charge and other non-interest income
offset by securities losses realized.
Service charges on deposit accounts increased $20,000 or 7.4% for the first
three months of 1996 as compared to the same period a year earlier. The increase
in service charge income was the product of a larger deposit base and the fee
income associated with it. Yardville realized $21,000 in net losses on the sale
of securities, net, in the first quarter of 1996 versus no losses on the sale of
securities, net, in the first quarter of 1995. Proceeds from securities sold
were utilized to fund higher yielding commercial loan assets. Other non-interest
income increased $36,000 or 17.6% in the first quarter of 1996 versus the first
quarter of 1995. This increase was principally due to additional fee income
derived from life insurance assets and increases in other fee income.
Non-Interest Expense
Total non-interest expense increased $300,000 or 11.9% to $2,818,000 for the
first three months of 1996 compared to $2,518,000 for the first three months of
1995. The increase in non-interest expense is the result of increases in
salaries and employee benefits and occupancy and equipment expense.
14
<PAGE>
Salaries and employee benefits were $1,581,000 for the first three months of
1996, an increase of $194,000 or 14.0% compared to the same three month period
of 1995. The increase resulted from increased staffing required as Yardville has
grown for the comparable time periods and normal annual salary increases.
Employee benefits also increased 16.4% for the comparable time periods. Full
time equivalent staff increased to 151 at March 31, 1996 from 146 at March 31,
1995.
Net occupancy expenses increased $56,000 or 34.1% for the first three months of
1996 as compared to the same period in 1995 as the result of significantly
increased snow removal costs and the additional occupancy costs associated with
new branch offices. Equipment expense increased $64,000 or 56.6% for the same
period primarily due to increased depreciation costs associated with new
furniture and fixtures in Yardville's new branches and computer equipment.
Other non-interest expenses totaled $840,000 for the three months ended March
31, 1996, a decrease of $14,000 or 1.6%, from the comparable 1995 period. The
decrease in other non-interest expense is the result of eliminated FDIC
insurance premiums offset by increases in professional fees, computer expenses
and stationary and supplies costs associated with a growing branch network.
15
<PAGE>
PART II OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
A. The following exhibits are filed with this Form 10-QSB for the fiscal
quarter ended March 31, 1996 by Yardville National Bancorp:
No. Exhibits
--- --------
3.1 Restated Certificate of Incorporation of
the Registrant
3.2 By-Laws of the Registrant
4.1 Specimen of Share of Common Stock
4.2 Form of Class A Warrant
11 Statement re: Computation of Per Share
Earnings
27.1 Financial Data Schedule
B. No reports on FORM 8-K were filed by the registrant during the quarter
ended March 31, 1996.
16
<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.
YARDVILLE NATIONAL BANCORP
--------------------------------
(Registrant)
Date : May 15, 1996 By : /s/ Stephen F. Carman
-------------------- ----------------------------
Stephen F. Carman
Executive Vice President
and Chief Financial Officer
17
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INDEX TO EXHIBITS
No. Exhibits Page
--- -------- ----
* 3.1 Restated Certificate of Incorporation of
the Registrant
++ 3.2 By-Laws of the Registrant
++ 4.1 Specimen of Share of Common Stock
++ 4.2 Form of Class A Warrant
11 Statement re: Computation of Per Share
Earnings 19-20
27.1 Financial Data Schedule 21-22
* Incorporated by reference to the Issuer's Annual Report on Form 10-KSB for
the Fiscal Year Ended December 31, 1994, as amended by Form 10-KSB/A filed
on July 25, 1995.
++ Incorporated by reference to the Issuer's Registration
Statement on Form SB-2 (Registration No. 33-78050)
18
<PAGE>
Exhibit 11
Yardville National Bancorp and Subsidiary
Computation of Earnings Per Share
Three months ended March 31, 1996
Primary Earnings Per Share
- - --------------------------
(in thousands, except per share amounts)
Reconciliation of net income, per consolidated
statements of income to amount used in primary
earnings per share computation:
Net income $ 992
Add: Interest on long-term debt and interest on
investment securities net of income tax
effect, on application of assumed proceeds
from exercise of options and warrants in
excess of 20% limitation 19
-------
Net income, as adjusted $ 1,011
-------
Reconciliation of weighted average number of
shares outstanding to amount used
in primary earnings per share computation:
Weighted average number of shares outstanding 2,357
Add: Equivalent shares issuable from assumed
exercise of options and warrants in excess
of 20% limitation 173
Equivalent shares issuable from assumed
exercise of dilutive options -
-------
Weighted average number of shares outstanding,
as adjusted 2,530
-------
Primary earnings per share $ .40
-------
19
<PAGE>
Exhibit 11, cont.
Yardville National Bancorp and Subsidiary
Computation of Earnings Per Share
Three months ended March 31, 1996
Fully Diluted Earnings Per Share
- - --------------------------------
(in thousands, except per share amounts)
Reconciliation of net income, per consolidated
statements of income to amount used in fully
diluted earnings per share computation:
Net income $ 992
Add: Interest on long-term debt and interest on
investment securities net of income tax
effect, on application of assumed proceeds
from exercise of options and warrants in
excess of 20% limitation 18
-------
Net income, as adjusted $ 1,010
-------
Reconciliation of weighted average number of
shares outstanding to amount used in fully
diluted earnings per share computation:
Weighted average number of shares outstanding 2,357
Add: Equivalent shares issuable from assumed
exercise of options and warrants in excess
of 20% limitation 173
Equivalent shares issuable from assumed
exercise of dilutive options -
-------
Weighted average number of shares outstanding,
as adjusted 2,530
-------
Fully diluted earnings per share $ .40
-------
20
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<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1996
<CASH> 9,689
<INT-BEARING-DEPOSITS> 4,154
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0
0
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<ALLOWANCE-OPEN> 3,677
<CHARGE-OFFS> 95
<RECOVERIES> 12
<ALLOWANCE-CLOSE> 3,858
<ALLOWANCE-DOMESTIC> 3,858
<ALLOWANCE-FOREIGN> 0
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