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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10 QA
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES ACT
OF 1934
For the quarterly period ended March 31, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES ACT OF 1934
For transition period from
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 (IRS Employer Identification No.)
incorporation or organization)
3111 Quakerbridge Road, Mercerville, New Jersey 08619
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(Address of principal executive offices)
(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 April 30, 1998.
Common Stock, no par value 5,138,883
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Class Number of shares outstanding
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Item 1. Financial Statements
Yardville National Bancorp and Subsidiaries
Consolidated Statements of Condition
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
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(in thousands, except for share data) 1998 1997
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<S> <C> <C>
Assets:
Cash and due from banks $ 24,465 $ 18,923
Federal funds sold 16,998 1,500
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Cash and Cash Equivalents 41,463 20,423
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Interest bearing deposits 4,122 2,219
Securities available for sale 151,330 159,724
Investment securities (market value of $26,076 in 1998 and
$26,848 in 1997) 26,099 26,912
Loans 409,094 385,751
Less: Allowance for loan losses (5,902) (5,570)
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Loans, net 403,192 380,181
Bank premises and equipment, net 5,405 5,192
Other real estate 3,492 3,171
Other assets 19,989 16,864
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Total Assets $ 655,092 $ 614,686
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Liabilities and Stockholders' Equity
Deposits
Non-interest bearing $ 65,917 $ 66,560
Interest bearing 385,859 356,384
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Total Deposits 451,776 422,944
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Borrowed funds
Securities sold under agreements to repurchase 109,790 100,050
Other 35,856 34,266
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Total Borrowed Funds 145,646 134,316
Company - obligated Mandatorily Redeemable Trust Preferred
Securities of Subsidiary Trust holding solely junior
Subordinated Debentures of the Company 11,500 11,500
Other liabilities 6,233 6,181
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Total Liabilities $ 615,155 $ 574,941
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Stockholders' equity
Preferred stock: no par value
Authorized 1,000,000 shares, none issued
Common Stock: no par value
Authorized 12,000,000 shares
Issued and outstanding 5,073,767 in 1998
And 5,082,050 shares in 1997 20,249 17,703
Surplus 2,205 2,205
Undivided profits 18,331 19,713
Common stock in treasury, at cost:
39,800 shares in 1998 (723) --
Accumulated other comprehensive income (125) 124
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Total Stockholders' Equity 39,937 39,745
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Total Liabilities and Stockholders' Equity $ 655,092 $ 614,686
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</TABLE>
Shares and related amounts adjusted for two-for-one stock split declared
December 23, 1997 and 2.5% stock dividend declared March 25, 1998.
See Accompanying Notes to Unaudited Consolidated Financial Statements.
2
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Yardville National Bancorp and Subsidiaries
Consolidated Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
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(in thousands, except for share data) 1998 1997
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<S> <C> <C>
INTEREST INCOME:
Interest and fees on loans $ 8,748 $ 7,345
Interest on deposits with banks 55 16
Interest on securities available for sale 2,440 1,569
Interest on investment securities:
Taxable 277 342
Exempt from Federal income tax 102 102
Interest on Federal funds sold 69 164
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Total Interest Income 11,691 9,538
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INTEREST EXPENSE:
Interest on savings account deposits 1,255 1,230
Interest on certificates of deposit of $100,000 or more 301 305
Interest on other time deposits 2,673 2,228
Interest on borrowed funds 1,917 1,157
Interest on trust preferred securities 266 --
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Total Interest Expense 6,412 4,920
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Net Interest Income 5,279 4,618
Less provision for loan losses 400 275
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Net Interest Income After Provision for Loan Losses 4,879 4,343
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NON-INTEREST INCOME:
Service charges on deposit accounts 306 283
Gains on sales of mortgages, net 17 --
Securities gains, net 9 --
Other non-interest income 356 323
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Total Non-Interest Income 688 606
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NON-INTEREST EXPENSE:
Salaries and employee benefits 1,943 1,817
Occupancy expense, net 233 234
Equipment 296 250
Other non-interest expense 1,032 778
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Total Non-Interest Expense 3,504 3,079
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Income before income tax expense 2,063 1,870
Income tax expense 729 658
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Net Income $ 1,334 $ 1,212
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EARNINGS PER SHARE:
Basic $ 0.26 $ 0.24
Diluted $ 0.26 $ 0.24
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Weighted average shares outstanding:
Basic 5,073 5,000
Diluted 5,117 5,080
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</TABLE>
Shares and related amounts adjusted for two-for-one stock split declared
December 23, 1997 and 2.5% stock dividend declared March 25, 1998.
See Accompanying Notes to Unaudited Consolidated Financial Statements.
3
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Yardville National Bancorp and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Three months ended March 31,
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(in thousands) 1998 1997
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<S> <C> <C>
Cash Flows from Operating Activities:
Net Income $ 1,334 $ 1,212
Adjustments:
Provision for loan losses 400 275
Depreciation 226 206
Amortization and accretion 144 100
Gains on sales of securities available for sale (9) --
Loss on sales of other real estate 1 --
Writedown of other real estate 3 2
(Increase) decrease in other assets (2,975) 59
Increase in other liabilities 51 919
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Net Cash (Used in) Provided by Operating Activities (825) 2,773
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Cash Flows From Investing Activities:
Net decrease in interest bearing deposits (1,903) (1,132)
Purchase of securities available for sale (22,287) (19,969)
Maturities, calls, and paydowns of securities available
for sale 18,021 7,838
Proceeds from sales of securities available for sale 12,161 --
Proceeds from maturities and paydowns of investment
securities 1,278 734
Purchase of investment securities (500) --
Net increase in loans (23,819) (13,419)
Expenditures for bank premises and equipment (439) (53)
Proceeds from sale of other real estate 83 --
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Net Cash Used in Investing Activities (17,405) (26,001)
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Cash Flows from Financing Activities:
Net increase in non-interest bearing demand,
money market, and savings deposits 1,557 18,803
Net increase in certificates of deposit 27,275 11,607
Net increase (decrease) in borrowed funds 11,330 (4,861)
Proceeds from issuance of common stock 178 175
Treasury Shares Acquired (723) --
Dividends paid (347) (294)
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Net Cash Provided by Financing Activities 39,270 25,430
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Net increase in cash and cash equivalents 21,040 2,202
Cash and cash equivalents as of beginning of period 20,423 17,150
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Cash and Cash Equivalents as of End of Period $ 41,463 $ 19,352
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Supplemental Disclosure of Cash Flow Information:
Cash paid during period for:
Interest expense 6,551 4,310
Income taxes 1,309 600
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Supplemental Schedule of Non-cash Investing and Financing
Activities:
Transfers to other real estate from loans, net of
charge offs 407 462
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</TABLE>
See Accompanying Notes to Unaudited Consolidated Financial Statements.
4
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Yardville National Bancorp and Subsidiaries
Notes to Consolidated Financial Statements
Three Months Ended March 31, 1998
(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 revenue and expenses for the period. Actual results could differ
significantly from those estimates. 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 reserve 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 other
real estate, management obtains independent appraisals for significant
properties.
The consolidated financial data as of and for the three months ended March 31,
1998 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 necessarily
indicative of the result of operations that might be expected for the entire
year ending December 31, 1998.
Consolidation
The consolidated financial statements include the accounts of Yardville National
Bancorp and its subsidiaries, Yardville Capital Trust (the "Trust") and
Yardville National Bank (the "Bank") and the Bank's wholly owned subsidiaries,
Yardville National Investment Corporation, Brendan Inc., Nancy Beth Inc., and
Yardville Real Estate Corporation (collectively, "YNB"). All significant
inter-company accounts and transactions have been eliminated. Brendan Inc. and
Nancy Beth Inc. are utilized for the control and disposal of other real estate
properties. Yardville Real Estate Corporation is utilized to hold Bank branch
properties.
Allowance for Loan Losses
For financial reporting purposes, the provision for loan losses charged to
operating expense is determined by management and based upon a periodic review
of the loan portfolio, past experience, the economy, and other factors that may
affect a 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 adjustments, as they become necessary, are reported
in the periods in which they become known. Management believes that the
allowance for loan losses is adequate. While management uses available
information to recognize losses on loans, 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 loan losses 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 judgement about information available at the
time of their examination.
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2. Earnings Per Share
Weighted average shares for the basic net income per share calculation for the
three months ended March 31, 1998 and 1997 were 5,073,000 and 5,000,000
respectively. For the diluted net income per share computation common stock
equivalents of 44,000 and 80,000 are included for the three months ended March
31, 1998 and 1997, respectively.
3. Recently Issued Accounting Standards
SFAS No. 130
FASB Statement No. 130 "Reporting Comprehensive Income" (Statement 130)
establishes standards for reporting and display of comprehensive income and its
components (revenue, expenses, gains and losses) in a full set of
general-purpose financial statements. Statement 130 requires that all items that
are required to be recognized under accounting standards as components of
comprehensive income be reported in a financial statement that is displayed with
the same prominence as other financial statements. Statement 130 does not
require a specific format for that financial statement but requires that an
enterprise display an amount representing total comprehensive income for the
period in that financial statement.
Statement 130 requires an enterprise to (a) classify items of other
comprehensive income by their nature in a financial statement and (b) display
the accumulated balance of other comprehensive income separately from retained
earnings and additional paid-in capital in the equity section of a statement of
financial position. This statement is effective for fiscal years beginning after
December 15, 1997. Reclassification of financial statements for earlier periods
provided for comparative purposes are required. YNB adopted Statement No. 130 on
January 1, 1998 and the disclosure is contained in the table below.
6
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<TABLE>
<CAPTION>
Comprehensive Net Income Three Months Ended March 31,
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(in thousands) 1998 1997
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<S> <C> <C>
Net Income $ 1,334 $ 1,212
Other comprehensive income
Unrealized (loss) gain on securities available
for sale, net of taxes (249) 285
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Other comprehensive income (249) 285
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Total comprehensive income $ 1,085 1,497
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</TABLE>
SFAS No. 132
In February 1998, the FASB issued SAS No. 132 "Employer Disclosures about
Pensions and Other Post Retirement Benefits." This statement standardizes the
disclosure requirements for pensions and other postretirement benefits by
requiring additional information that will facilitate financial analysis and
eliminating certain disclosures that are considered no longer useful. SFAS No.
132 supersedes the disclosure requirements in SFAS Nos. 87, 88 and 106. This
statement is effective for fiscal years beginning after December 15, 1997.
Restatement of disclosure for earlier periods provided for comparative purposes
are required unless information is not readily available
7
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
YARDVILLE NATIONAL BANCORP
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(Registrant)
Date: June 5, 1998 By: /s/ Stephen F. Carman
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Stephen F. Carman
Executive Vice President and
Chief Financial Officer
8
