<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(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, l997
( ) 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
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, 1997
Common Stock, no par value 2,470,299
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Class Number of shares outstanding
<PAGE>
INDEX
YARDVILLE NATIONAL BANCORP AND SUBSIDIARY
PART I FINANCIAL INFORMATION PAGE NO.
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Item 1. Financial Statements
Consolidated Statements of Condition
March 31, 1997 and December 31, 1996 3
Consolidated Statements of Income
Three months ended March 31, 1997
and 1996 4
Consolidated Statements of Cash Flows
Three months ended March 31, 1997
and 1996 5
Notes to Consolidated Financial Statements 6-7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-14
PART II OTHER INFORMATION
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Item 6. Exhibits and Reports on Form 8-K 15
SIGNATURES 16
Exhibit 27.1 Financial Data Schedule 17
<PAGE>
Yardville National Bancorp and Subsidiary
Consolidated Statements of Condition
(unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
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(in thousands, except share data) 1997 1996
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<S> <C> <C>
Assets:
Cash and due from banks $ 14,042 $ 13,110
Federal funds sold 5,310 4,040
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Cash and Cash Equivalents 19,352 17,150
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Interest bearing deposits 2,489 1,357
Securities available for sale 104,855 93,671
Investment securities 30,525 31,296
Loans 344,065 331,237
Less: Allowance for loan losses (5,103) (4,957)
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Loans, net 338,962 326,280
Bank premises and equipment, net 5,265 5,418
Other real estate 855 395
Other assets 15,272 14,978
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Total Assets $ 517,575 $ 490,545
==================================================================================================
Liabilities and Stockholders' Equity:
Deposits
Non-interest bearing $ 52,073 $ 55,519
Interest bearing 342,782 308,926
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Total Deposits 394,855 364,445
Borrowed funds
Securities sold under agreements to repurchase 64,340 64,185
Other 17,138 22,154
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Total Borrowed Funds 81,478 86,339
Other liabilities 5,450 4,531
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Total Liabilities $ 481,783 $ 455,315
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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 2,450,378 shares in 1997
and 2,430,414 shares in 1996 17,421 17,246
Surplus 2,205 2,205
Undivided Profits 16,858 15,940
Unrealized loss - securities available for sale (692) (161)
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Total Stockholders' Equity 35,792 35,230
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Total Liabilities and Stockholders' Equity $ 517,575 $ 490,545
==================================================================================================
</TABLE>
See Accompanying Notes to Unaudited Consolidated Financial Statements.
<PAGE>
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) 1997 1996
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<S> <C> <C>
INTEREST INCOME:
Interest and fees on loans $ 7,345 $ 5,887
Interest on deposits with banks 16 34
Interest on securities available for sale 1,569 1,403
Interest on investment securities:
Taxable 342 410
Exempt from Federal income tax 102 96
Interest on Federal funds sold 164 57
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Total Interest Income 9,538 7,887
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INTEREST EXPENSE:
Interest on savings account deposits 1,230 972
Interest on certificates of deposit of $100,000 or more 305 203
Interest on other time deposits 2,228 1,617
Interest on borrowed funds 1,157 975
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Total Interest Expense 4,920 3,767
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Net Interest Income 4,618 4,120
Less provision for loan losses 275 265
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Net Interest Income After Provision for Loan Losses 4,343 3,855
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NON-INTEREST INCOME:
Service charges on deposit accounts 283 290
Securities losses, net -- (21)
Other non-interest income 323 241
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Total Non-Interest Income 606 510
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NON-INTEREST EXPENSE:
Salaries and employee benefits 1,817 1,581
Occupancy expense, net 234 220
Equipment 250 177
Other non-interest expense 778 840
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Total Non-Interest Expense 3,079 2,818
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Income before income tax expense 1,870 1,547
Income tax expense 658 555
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Net Income $ 1,212 $ 992
=============================================================================================
EARNINGS PER SHARE:
Primary $ 0.49 $ 0.40
Fully diluted $ 0.49 $ 0.40
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Weighted average shares outstanding 2,489 2,530
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Consolidated book value $ 14.61 $ 13.51
=============================================================================================
</TABLE>
See Accompanying Notes to Unaudited Consolidated Financial Statements.
<PAGE>
Yardville National Bancorp and Subsidiary
Consolidated Statements of Cash Flows
(unaudited)
<TABLE>
<CAPTION>
Three months ended March 31,
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(in thousands) 1997 1996
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<S> <C> <C>
Cash Flows from Operating Activities:
Net Income $ 1,212 $ 992
Adjustments:
Provision for loan losses 275 265
Depreciation 206 173
Amortization and accretion 100 130
Securities losses, net -- 21
Writedown of other real estate 2 25
(Increase)/decrease in other assets 59 (676)
Increase in other liabilities 919 597
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1,561 535
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Net Cash Provided by Operating Activities 2,773 1,527
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Cash Flows from Investing Activities:
Net increase in interest bearing deposits (1,132) (3,121)
Purchase of securities available for sale (19,969) (28,153)
Maturities, calls, and paydowns of securities available for sale 7,838 10,612
Proceeds from sales of securities available for sale -- 24,049
Proceeds from maturities and paydowns of investment securities 734 767
Net increase in loans (13,419) (18,008)
Expenditures for bank premises and equipment (53) (1,111)
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Net Cash Used by Investing Activities (26,001) (14,965)
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Cash Flows from Financing Activities:
Net increase in non-interest bearing
demand, money market, and saving deposits 18,803 6,477
Net increase in certificates of deposit 11,607 1,033
Net increase/(decrease) in borrowed funds (4,861) 10,049
Proceeds from issuance of common stock 175 461
Dividends paid (294) (258)
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Net Cash Provided by Financing Activities 25,430 17,762
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Net increase in cash and cash equivalents 2,202 4,324
Cash and cash equivalents as of beginning of period 17,150 12,835
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Cash and Cash Equivalents as of End of Period $ 19,352 $ 17,159
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Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for:
Interest expense $ 4,310 $ 3,789
Income taxes 600 150
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Supplemental Schedule of Non-cash Financing Activities:
During the three month period ended March 31, 1997 the Corporation transferred
$462,000, net of charge offs, from loans to other real estate.
</TABLE>
See Accompanying Notes to Unaudited Consolidated Financial Statements.
<PAGE>
Yardville National Bancorp and Subsidiary
Notes to Consolidated Financial Statements
Three Months Ended March 31, 1997
(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, 1997 and 1996 includes, 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 is not ncessarily indicative of the results of operations that might
be expected for the entire year ending December 31, 1997.
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 allowances
for loan losses and other real estates, 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 Yardville's wholly owned subsidiary, The
Yardville National Investment Corporation. All significant intercompany accounts
and transactions have been eliminated.
<PAGE>
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 Bank's allowance for losses on loans and 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.
<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 Company together with its sole
subsidiary, the Bank.
FINANCIAL CONDITION
Assets
Total consolidated assets at March 3l, 1997 totaled $517,575,000, an increase of
$27,030,000 or 5.5%, compared to $490,545,000 at December 31, 1996. The growth
in Yardville's asset base during the first quarter of 1997 was due primarily to
an increase in loans and securities. The increase in loans was the product of a
strategy to improve the profitability of the organization through relationship
banking and the continued consolidation in Yardville's marketplace, which has
solidified Yardville's competitive position in the small and middle markets.
Yardville's asset base includes investments of approximately $59,100,000
purchased utilizing repurchase agreements (investment growth strategy) at March
31, 1997, an increase of $8,000,000 compared to approximately $51,000,000 at
December 31, 1996.
Securities
Total securities increased by $10,413,000 at March 31, 1997 compared to year end
1996. The growth in the securities portfolio was due to the purchase of short
term treasuries to enhance short-term liquidity and the increase in the
investment growth strategy offset by principal paydowns on mortgage backed
securities.
At March 3l, 1997 the amortized cost of investment securities classified as
held to maturity was $30,525,000, compared to $31,296,000 at December 31, 1996,
a decrease of $771,000 or 2.5%.
Net unrealized losses as of March 31, 1997 in Yardville's available for sale
securities portfolio were $l,l53,000. Net unrealized losses of $692,000, net of
tax effect, were reported as a reduction of stockholders' equity at March 31,
1997. The available for sale portfolio represented 77.5% of the entire
portfolio. The available for sale portfolio, except those securities purchased
utilizing repurchase agreements, provides a secondary source of liquidity.
Federal Funds
At March 31, 1997 Federal funds sold totaled $5,310,000, an increase of
$1,270,000 as compared to $4,040,000 at December 31, 1996. The amount of federal
funds sold reflect management's determination of an adequate level of short term
funding sources.
<PAGE>
Loans
Total loans, net of unearned discounts, increased by $12,828,000 or 3.9% to
$344,065,000 at March 31, 1997 compared to $331,237,000 at year end 1996.
Yardville's loan portfolio represented 66.5% of assets at March 31, 1997
compared to 67.5% of assets at December 31, 1996.
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, 1997 as a result of the continued consolidation in
Yardville's marketplace and management's emphasis on establishing relationships
has solidified Yardville's competitive position in the small and middle markets.
On a component basis, for the three month period ended March 31, 1997,
commercial loan and real estate-construction loan balances increased $7,700,000
and $2,600,000 respectively or 12.1% and 10.0% respectively. Real estate -
commercial mortgages and real estate - residential mortgages increased .48% and
.29%, respectively, for the first quarter of 1997.
Consumer loan balances increased $2,100,000 or 14.0% through the first three
months of 1997. The increase is principally from loans transferred from the
commercial loan portfolio.
Liabilities
Yardville's deposit base is the principal source of funds supporting interest
earning assets. Total deposits amounted to $394,855,000 at March 31, 1997
compared to $364,445,000 at December 31, 1996, an increase of $30,410,000 or
8.3%. Yardville was successful in bidding for Mercer County Surrogate's deposits
which netted Yardville $15,000,000 in deposits in early January 1997.
Growth in Yardville's deposit base also continues in higher yielding
certificate's of deposit (CD's) and premium money market accounts, both higher
cost funding sources. Average interest bearing deposits, including CD's of
$100,000 or more, increased $56,467,000 or 20.4% to total $333,437,000 for the
three month period ended March 31, l997 as compared to $276,970,000 for the year
ended December 31, 1996. Interest bearing deposits have increased 11.0% while
non-interest bearing deposits have decreased 6.2% in the first three months of
1997. At March 31, 1997 interest bearing and non-interest bearing deposits
totaled $342,782,000 and $52,073,000, respectively.
Borrowed funds totaled $81,478,000 at March 31, 1997 compared to $86,339,000 at
December 31, 1996, a decrease of $4,861,000 or 5.6%. Average borrowed funds
decreased $5,465,000 to total $81,600,000 for the three month period ended March
31, 1997 as compared to $87,065,000 for the year ended December 31, 1996.
Borrowed funds decreased in the first quarter of 1997 principally due to the
retirement of repurchase agreements.
<PAGE>
Borrowed funds at March 31, 1997 totaled approximately $15,800,000 in FHLB
advances ($10,000,000 with a maturity of less than 1 year), approximately
$59,100,000 in repurchase agreements utilized to purchase investments and
approximately $11,400,000 in repurchase agreements supporting earning asset
growth were outstanding.
Yardville has the availability to borrow up to $20,000,000 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 is to further build the bank's core deposit base to fund
asset growth. However, borrowed funds will be utilized to meet short term
liquidity needs and as an additional source of funding for the loan and
investment portfolios.
Capital
Total stockholders' equity of $35,792,000 at March 31, 1997 increased $562,000
or 1.6% from $35,230,000 at December 31, 1996. This increase resulted from (i)
earnings of $1,212,000 over the first three months of 1997 (less dividend
payments of $294,000) and a negative equity adjustment of $531,000 for the
unrealized loss on securities available for sale, (ii) and proceeds of $175,000
from exercised options.
Yardville's leverage ratio was 7.10% at March 31, 1997 compared to 7.80% at
December 31, l996. At March 31, 1997 tier I and total tier I and II capital to
risk weighted assets were 9.94% and 11.20%, respectively. The risk based capital
levels at year end 1996 were 10.17% an 11.43% for tier I and total risk based
capital, respectively.
The minimum regulatory requirements require financial institutions to have a
tier one leverage ratio of 4.0%, 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, 1997, nonperforming loans, consisting of loans 90 days or more past
due and nonaccruing loans, totaled $7,602,000 compared to $8,140,000 at December
31, 1996. Other real estate owned at March 31, 1997 totaled $855,000 compared to
$395,000 at December 31, 1996. The increase in other real estate is the result
of transferring two properties into other real estate during the first quarter
of 1997.
Total nonperforming assets decreased to $8,457,000 at March 31, 1997 compared to
$8,535,000 at year end l996. Nonperforming assets as a percentage of total loans
were 2.5% at March 31, l997. Management remains committed to reducing the level
of nonperforming assets and improving asset quality.
<PAGE>
The allowance for loan losses increased to $5,103,000, or 1.48% of total loans,
at March 31, 1997 compared to $4,957,000, or 1.50% of total loans at year end
1996. The provision for loan losses through March 31, 1997 was $275,000.
Yardville had net loan charge-offs of $129,000 for that time period. At March
31, 1997 the allowance for loan losses covered 67.1% of nonperforming loans and
60.3% of nonperforming assets. The allowance for loan losses, in management's
judgment, is adequate to provide for potential losses.
RESULTS OF OPERATIONS
Net Income
Yardville reported net income of $1,212,000 for the three months ended March 31,
1997, an increase of $220,000 or 22.2%, from net income of $992,000 reported for
the same tine period in 1996. The increase in net income for the three months
ended March 31, 1997 compared to the same period of 1996 was primarily
attributable to an increase in net interest income partially offset by an
increase in non-interest expenses.
On a fully diluted per share basis, net income was $.49 for the first three
months of 1997 compared to $.40 for the first three months of 1996. As net
income rose by 22.2% in the first quarter of 1997 compared to the first quarter
of 1996, earnings per share increased by $.09 during this time period. Earnings
per share amounts for the three months ended March 31, 1997 were calculated
using the treasury stock method while earnings per share for the same period of
1996 were calculated utilizing the modified treasury stock method.
Net Interest Income
Yardville's net interest income for the three months ended March 31, l997 was
$4,618,000, an increase of 12.1% or $498,000 over the $4,120,000 for the
comparable 1996 period. The principal factor contributing to the increase in net
interest income for the three months ended March 31, l997 was an increase in
interest income of $1,651,000 resulting principally from an increase in
commercial loan volume, offset by an increase in interest expense of $1,153,000
due to higher levels of time deposits and borrowed funds.
The net interest margin (tax equivalent basis) between yields on average
interest earning assets and costs of average funding sources was 3.90% for the
three month period ended March 31, 1997 compared to 4.31% for the three month
period ended March 31, 1996. The decrease in the net interest margin for the
comparable period was principally due to the factors discussed below.
Continuing into 1997, management's strategy is to increase net interest income
by purchasing investments using repurchase agreements. At March 31, 1997
approximately $59,100,000 had been purchased utilizing this strategy. The
targeted spread on this strategy is 75 basis points after tax. This strategy,
while successful in increasing net interest income, has a negative impact on the
net interest margin. Also contributing to the decrease in the net interest
margin of 41 basis points for the comparable periods was the increased
competition and the subsequent decrease in loan yields.
<PAGE>
Interest Income
For the three month period ended March 31, 1997 total interest income of
$9,538,000 increased $1,651,000 or 20.9% as compared to the same period a year
earlier. The increase in interest income is principally due to the higher volume
of average loan assets and to a lesser extent securities assets. Average loans
and securities increased $81,967,000 and $3,039,000 or 32.0% and 2.4%,
respectively, for the three months ended March 31, 1997 compared to the same
1996 period. The average yield on the loan portfolio decreased 51 basis points
for the comparable period in a lower rate competitive marketplace. The average
yield on the securities portfolio, conversely, increased 18 basis points.
Interest on Federal funds sold increased $107,000 for the three month period
ended March 31, 1997 due to increases in average balances of $8,388,000 to
$12,652,000 for the three month period ended March 31, 1997 compared to
$4,264,000 for the three month period ended March 31, 1996. Offsetting the
effect of this increase the average yield on Federal Funds sold decreased 17
basis points during this comparative period from 5.35% to 5.18%.
Overall, the yield on Yardville's interest earning assets decreased 19 basis
points to 7.96% for the three month period ended March 31, 1997 from 8.15% for
the three month period ended March 31, 1996 for the reasons discussed above.
Interest Expense
Total interest expense increased $1,153,000 or 30.6% to $4,920,000 for the three
months ended March 31, 1997 compared to $3,767,000 reported for the three months
ended March 31, 1996. The increase in interest expense for the comparable time
periods is the result of a larger deposit base, higher market interest rates and
greater levels of borrowed funds. The average rate paid on interest bearing
liabilities increased 11 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 $333,437,000 at March 31, 1997
compared to $258,982,000 at March 31, 1996. 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 $50,926,000 or 39.3% for the first
quarter of 1997 compared to the first quarter a year earlier.
Interest expense on borrowed funds increased $182,000 during the first quarter
of 1997 compared to the same period in 1996 as a result of average balances
being higher by $14,882,000. As of March 31, 1997 management has purchased
investments for its growth strategy utilizing repurchase agreements totaling
approximately $59,100,000.
<PAGE>
While core deposits are strategically desired to fund current and projected
asset growth, borrowed funds will be utilized to support Yardville's core
deposits to meet short-term liquidity needs and to fund asset growth.
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, 1997
was $275,000 compared to $265,000 for the three months ended March 31, 1996.
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 $606,000 for the first three months of 1997
compared to $510,000 for the same period in 1996. The increase of $96,000 or
18.8% is primarily attributable to an increase of $82,000 in other non-interest
income principally due to additional fee income derived from life insurance
assets and other fee income.
Service charges on deposit accounts decreased $7,000 or 2.4% for the first three
months of 1997 as compared to the same period a year earlier. The decrease in
service charge income resulted from a reduction in insufficient fund fees
offset by an increase in service charges on deposit accounts.
Yardville had no net losses on the sale of securities in the first quarter of
1997 versus $21,000 in net losses on the sale of securities, in the first
quarter of 1996.
The increase in other non-interest income when comparing the first quarter of
1997 to 1996 is due to a combination of factors discussed below. During the
latter half of 1996, Yardville National Bank began an assessment for use of
"others on us" Automated Teller Machine (ATM) card usage. Through the first
three months of March 1997 the Bank earned $55,000 through the implementation of
this "others on us" fee. In addition, income earned on life insurance assets
increased during the first quarter of 1997 compared to 1996. Offsetting these
two increases was the elimination of the annual ATM fees for Yardville National
Bank cardholders in January 1997.
<PAGE>
Non-Interest Expense
Total non-interest expense increased $261,000 or 9.3% to $3,079,000 for the
first three months of 1997 compared to $2,818,000 for the first three months of
1996. The increase in non-interest expense was primarily the result of increases
in salaries and employee benefits and equipment expense associated with the
installation and upgrading of personal computers throughout the organization
offset by decreases in other non-interest expenses.
Salaries and employee benefits were $1,817,000 for the first three months of
1997, an increase of $236,000 or 14.9% compared to $1,581,000 for same three
month period of 1996. The increase resulted from increased staffing required as
Yardville has grown for the comparable time periods through the opening of two
additional branches during the second and third quarter of 1996 and normal
annual salary increases. Employee benefits also increased 21.3% to $415,000
compared to $342,000 for the comparable time periods. Full time equivalent staff
increased to 164 at March 31, 1997 from 151 at March 31, 1996.
Net occupancy expenses increased $14,000 or 6.4% for the first three months of
1997 to $234,000 as compared to $220,000 for the same period in 1996 due to
additional occupancy costs associated with new branch offices offset by
decreases in snow removal costs due to a milder winter. Equipment expense
increased $73,000 or 41.2% for the same comparable period primarily due to
increased depreciation costs associated with furniture and fixtures in
Yardville's new branches and computer hardware and software associated with
Yardville's in-house computer system.
Other non-interest expenses totaled $778,000 for the three months ended March
31, 1997, a decrease of $62,000 or 7.4%, from the comparable 1996 period. The
decrease in other non-interest expense is principally the result of the
conversion to an in-house computer system in late February 1996 and the decrease
in associated fees that were previously paid to an outside servicer. This
decrease was partially offset by increases in professional fees, marketing
costs, and loan related expenses.
Recently Issued Accounting Pronouncements
In February 1997, the Financial Accounting Standards Board issued SFAS No. 128,
"Earnings Per Share." SFAS 128 supersedes APB Opinion No. 15, "Earnings Per
Share," and specifies the computation, presentation and disclosure requirements
for earnings per share for entities with publicly held common stock or potential
common stock. This statement is effective for financial statements for periods
ending after December 15, l997. The adoption of this Statement should not have a
material effect on the consolidated financial statements of Yardville.
In February 1997, the Financial Accounting Standards Board issued SFAS No. 129,
"Disclosure of Information about Capital Structure." SFAS 129 lists required
disclosures about capital structure that have been included in a number of
separate statements and opinions. This statement is effective for financial
statements for periods ending after December 15, 1997. The adoption of the
Statement should not have a material effect on the consolidated financial
statements of Yardville.
<PAGE>
PART II OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
A. The following exhibits are filed with this Form lO-Q for the fiscal quarter
ended March 31, 1997 by Yardville National Bancorp:
INDEX TO EXHIBITS
No. Exhibits Page
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* 3.1 Restated Certificate of Incorporation of the Registrant
++ 3.2 By-Laws of the Registrant
++ 4.l Specimen of Share of Common Stock
++ 4.2 Form of Class A Warrant
++ ll Statement re: Computation of Per Share Earnings
27.1 Financial Data Schedule 17
* Incorporated by reference to the Issuer's Annual Report on Form
10-KSB 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)
B. No reports on FORM 8-K were filed by the registrant during the quarter ended
March 31, 1997.
<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, 1997 By:
------------------------
Stephen F. Carman
Executive Vice President
and Chief Financial Officer
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