United States
Securities and Exchange Commission
Washington, D.C. 20549
Form 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Period Ended March 31, 1996
Commission File Number: 0-15830
Raritan Bancorp Inc.
(exact name of registrant as specified in its charter)
Delaware 22-2792402
(State of Incorporation) (I.R.S. Employer
Identification Number)
9 West Somerset Street, Raritan, New Jersey 08869
(address of principal executive offices) (zip code)
908-725-0080
(Registrant's telephone number, including area code)
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 period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements
for the past 90 days.
X Yes No
--- ---
Applicable only to corporate issuers:
As of May 1, 1996, 1,425,189 common shares, $.01 par value per
share were outstanding.
PAGE
<PAGE>
RARITAN BANCORP INC.
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
PAGE
<S> <C>
PART I - FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS 1
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS 7
PART II - OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS 11
ITEM 2 CHANGES IN THE RIGHTS OF THE CORPORATION'S
SECURITY HOLDERS 11
ITEM 3 DEFAULTS BY THE CORPORATION ON ITS SENIOR
SECURITIES 11
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS 11
ITEM 5 OTHER INFORMATION 11
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K 11
SIGNATURES 12
</TABLE>
PAGE
<PAGE>
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
RARITAN BANCORP INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
<TABLE>
<CAPTION>
March 31, 1996 December 31, 1995
(Unaudited) (Audited)
- -------------------------------------------------------------------------------
<S> <C> <C>
Assets:
Cash and due from banks $ 8,490 $ 8,586
Federal funds sold 10,000 31,300
Short-term investment 14,000 --
- -------------------------------------------------------------------------------
Total cash and cash equivalents 32,490 39,886
Securities available-for-sale,
at fair value 50,000 50,547
Investment securities, net (fair
value: $58,182 at March 31, 1996
and $60,831 at December 31,
1995) 59,455 61,406
Loans: 197,534 195,639
Less: Unearned income 440 467
Allowance for loan losses 2,606 2,582
- -------------------------------------------------------------------------------
Net loans 194,488 192,590
- -------------------------------------------------------------------------------
Banking premises and equipment, net 3,295 3,231
Federal Home Loan Bank of
New York stock, at cost 2,669 2,669
Accrued interest receivable 1,995 1,859
Other assets 2,449 2,622
- -------------------------------------------------------------------------------
Total assets $346,841 $354,810
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Liabilities and Shareholders'
Equity:
Due to depositors:
Interest-bearing $299,343 $294,210
Non-interest-bearing 19,222 20,828
- -------------------------------------------------------------------------------
Total deposits 318,565 315,038
Borrowings 206 10,206
Accrued interest payable 55 61
Accrued expenses and other
liabilities 2,899 3,157
- -------------------------------------------------------------------------------
Total liabilities 321,725 328,462
- -------------------------------------------------------------------------------
Shareholders' equity:
Preferred stock, $.01 par value,
2,000,000 shares authorized,
none issued
Common stock, $.01 par value,
3,500,000 shares authorized,
1,725,000 shares issued with
1,426,689 shares outstanding
at March 31, 1996 and 1,492,189
shares outstanding at
December 31, 1995 17 17
Additional paid-in capital 10,596 10,598
Retained earnings 18,323 17,801
Fair value adjustment of securities
available for sale, net of tax 108 416
Less: Unallocated common stock
acquired by the ESOP (206) (206)
Cost of common stock in
treasury, 298,311 shares at
March 31, 1996 and 232,811
shares at December 31,1995 (3,722) (2,278)
- -------------------------------------------------------------------------------
Total shareholders' equity 25,116 26,348
Commitments and contingencies
- -------------------------------------------------------------------------------
Total liabilities and shareholders'
equity $346,841 $354,810
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated financial statements.
PAGE
<PAGE>
RARITAN BANCORP INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
- --------------------------------------------------------------------------------------
1996 1995
- --------------------------------------------------------------------------------------
<S> <C> <C>
Interest income:
Interest and fees on real estate
loans $ 3,096 $ 2,832
Interest and fees on other loans 903 856
Interest and dividends on
investment securities:
Taxable 1,692 1,882
Tax-exempt 13 13
Interest on deposits in other
banks 315 95
- ---------------------------------------------------------------------------------------
Total interest income 6,019 5,678
- ---------------------------------------------------------------------------------------
Interest expense:
Interest on deposit accounts 3,210 2,859
Interest on borrowings 10 148
- ---------------------------------------------------------------------------------------
Total interest expense 3,220 3,007
- ---------------------------------------------------------------------------------------
Net interest income 2,799 2,671
Provision for loan losses 75 75
- ---------------------------------------------------------------------------------------
Net interest income after provision
for loan losses 2,724 2,596
Other income:
Service charges and other income 174 151
- ---------------------------------------------------------------------------------------
Total other income 174 151
- ---------------------------------------------------------------------------------------
Operating expenses:
Salaries and employee benefits 907 853
Occupancy expense 199 159
FDIC insurance premium 43 169
Net cost of operation of
other real estate 8 20
Other operating expenses 560 506
- ---------------------------------------------------------------------------------------
Total operating expenses 1,717 1,707
- ---------------------------------------------------------------------------------------
Income before income tax expense 1,181 1,040
Income tax expense 438 387
- ---------------------------------------------------------------------------------------
Net income $ 743 $ 653
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
Average number of shares outstanding 1,597,324 1,629,686
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
Net income per share $ 0.46 $ 0.40
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated financial statements.
PAGE
<PAGE>
Raritan Bancorp Inc. and Subsidiary
Consolidated Statement of Cash Flows
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
For the Nine Months Ended March 31,
1996 1995
- -------------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 743 $ 653
Adjustments to reconcile net income
to net cash provided by operating
activities:
Increase in accrued interest
receivable (136) (28)
Amortization on securities, net 54 27
Provision for loan losses 75 75
Increase (decrease) in accrued
interest payable (6) 8
Increase in accrued expenses 69 83
Increase in prepaid expenses (127) (254)
Depreciation 89 91
Deferred income taxes (79) (11)
Increase in income taxes payable 492 398
Net decrease, other (310) (769)
- -------------------------------------------------------------------------------
Total cash provided by operating
activities 864 273
- -------------------------------------------------------------------------------
Cash flows from investing
activities:
Proceeds from call and repayments
of securities available-for-sale 3,017 814
Proceeds from repayments of
investment securities, net 1,928 2,799
Purchase of securities available-
for-sale (2,962) -
Purchase of Federal Home Loan
Bank of New York stock - (4)
Net disbursements from loans (1,950) (4,279)
Proceeds from disposal of real
estate acquired by foreclosure - 25
Capital expenditures (153) (2)
- -------------------------------------------------------------------------------
Net cash used in investing activities (120) (647)
- -------------------------------------------------------------------------------
Cash flows from financing activities:
Net increase in demand deposits,
money market accounts, NOW
accounts, prime performance
accounts, and savings accounts (3,776) (13,083)
Net increase in market-rate
certificates 7,303 12,240
Common stock sold under stock
option plan 30 -
Treasury stock acquired, at cost (1,476) -
Repayment of advance from Federal
Home Loan Bank of New York (10,000) -
Net change in borrowing under
repurchase agreement - (2,953)
Cash dividends paid (221) (196)
- -------------------------------------------------------------------------------
Net cash used in financing
activities (8,140) (3,992)
- -------------------------------------------------------------------------------
Net decrease in cash and cash
equivalents (7,396) (4,366)
Cash and cash equivalents at
beginning of period 39,886 16,343
- -------------------------------------------------------------------------------
Cash and cash equivalents at
end of period $32,490 $11,977
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Supplemental schedule of cash
flow information:
Interest paid $ 3,226 $ 2,848
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Income taxes paid $ 25 $ -
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Mortgage loans originated to
refinance the disposal of real
estate acquired by foreclosure $ - $ 75
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated financial statements.
PAGE
<PAGE>
RARITAN BANCORP INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1: The consolidated financial statements include the
accounts of the Raritan Bancorp Inc. ("Corporation") and its
wholly-owned subsidiary, The Raritan Savings Bank ("Bank").
The consolidated balance sheet at March 31, 1996, the
consolidated statements of income for the three month periods
ended March 31, 1996 and 1995, and the consolidated statements of
cash flows for the three month periods ended March 31, 1996 and
1995, have been prepared by the Corporation without audit. In
the opinion of management, all adjustments (which include only
normal recurring adjustments) necessary to present fairly the
financial condition, results of operations, and changes in cash
flows at March 31, 1996 for all periods presented have been made.
Included in cash and cash equivalents are cash, amounts due from
banks, federal funds sold and term deposits with original
maturities of less than ninety days. Generally, federal funds
sold are for one-day periods.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been omitted. These
consolidated financial statements are to be read in conjunction
with the December 31, 1995 audited financial statements and notes
thereto.
Interim results are not necessarily indicative of results for the
full year.
Note 2: Securities available for sale, at fair value, and
investment securities, net:
The amortized cost of securities and their estimated fair values
at March 31, 1996, were as follows:
<TABLE>
<CAPTION>
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
- ----------------------------------------------------------------------------
(Unaudited)
(In thousands)
<S> <C> <C> <C> <C>
Securities available-for-sale,
at fair value:
U.S. Treasury securities and
obligations of U.S. Government
agencies $14,482 $ 23 $ (49) $14,456
Obligations of states and
political subdivisions 761 40 - 801
Mortgage-backed securities issued
by Federal agencies 34,595 421 (273) 34,743
- ----------------------------------------------------------------------------
$49,838 $484 $ (322) $50,000
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Investment securities, net:
Mortgage-backed securities issued
by Federal agencies $59,455 $ - $(1,273) $58,182
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
</TABLE>
PAGE
<PAGE>
The amortized cost of securities and their estimated fair values
at December 31, 1995 were as follows:
<TABLE>
<CAPTION>
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
- ----------------------------------------------------------------------------
(Unaudited)
(In thousands)
<S> <C> <C> <C> <C>
Securities available-for-sale,
at fair value:
U.S. Treasury securities and
obligations of U.S. Government
agencies $12,533 $ 51 $ - $12,584
Obligations of states and
political subdivisions 761 43 - 804
Mortgage-backed securities issued
by Federal agencies 36,630 579 (50) 37,159
- ----------------------------------------------------------------------------
$49,924 $673 $ (50) $50,547
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Investment securities, net:
Mortgage-backed securities issued
by Federal agencies $61,406 $ - $(575) $60,831
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
</TABLE>
There were no sales of securities during the three month periods
ended March 31, 1996 and 1995.
<PAGE>
Note 3: Loans and Allowance for Loan Losses
Loans are summarized as follows:
<TABLE>
<CAPTION>
March 30, 1996 December 31, 1995
(Unaudited) (Audited)
- -----------------------------------------------------------------------------------
(In thousands)
<S> <C> <C>
Real estate:
Conventional $148,712 $147,673
Construction 8,216 8,536
- -----------------------------------------------------------------------------------
156,928 156,209
Consumer loans 29,513 28,886
Commercial loans 11,093 10,544
- -----------------------------------------------------------------------------------
$197,534 $195,639
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
</TABLE>
The activity in the allowance for loan losses follows:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
- -------------------------------------------------------------------------------------
1996 1995
- -------------------------------------------------------------------------------------
(Unaudited)
(In thousands)
<S> <C> <C>
Balance at beginning of period $2,582 $2,729
Provision charged to operations 75 75
Charge-offs (54) (89)
Recoveries 3 -
- --------------------------------------------------------------------------------------
Balance at end of period $2,606 $2,715
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
</TABLE>
PAGE
<PAGE>
Non-performing loans (over 90 days delinquent), real estate
acquired by foreclosure (included in Other Assets) and non-accrual
loans less than 90 days delinquent, totaled $2,588,000
and $1,225,000 at March 31, 1996 and December 31, 1995,
respectively, as follows:
<TABLE>
<CAPTION>
March 31, 1996 December 31, 1995
- ------------------------------------------------------------------------
Number Amount Number Amount
Description: of Loans (In thousands) of Loans (In Thousands)
- ------------------------------------------------------------------------
(Unaudited) (Audited)
- ------------------------------------------------------------------------
<S> <C> <C> <C> <C>
First mortgage loans 5 $ 831 3 $ 317
Home equity loans 1 37 2 36
Second mortgage loans - - 2 98
Consumer loans 1 12 - -
Commrecial loans 3 354 2 326
Loans with modified terms 3 271 3 278
- ------------------------------------------------------------------------
Total non-performing loans 13 1,505 12 1,055
Real estate acquired by
foreclosure (included
in Other Assets) 1 170 1 170
- ------------------------------------------------------------------------
14 1,675 13 1,225
Non-accrual loans less
than 90 days delinquent 4 913 - -
- ------------------------------------------------------------------------
18 $2,588 13 $1,225
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
</TABLE>
The loss of interest on loans charged-off, non-performing loans,
real estate acquired by foreclosure and non-accrual loans less
than 90 days delinquent totaled approximately $55,000 and $75,000
for the three months ended March 31, 1996 and 1995, respectively.
At March 31, 1996 and December 31, 1995, the Corporation had
impaired loans totaling $1,505,000 and $1,055,000, respectively.
The Corporation calculated a total allowance of $273,000 and
$122,000 at March 31, 1996 and December 31, respectively.
Impaired loans averaged $1,742,000 and $1,124,000 for the three
months ended March 31, 1996 and 1995, respectively. Interest
income totaling $23,000 and $3,000 was recognized, all on a cash
basis, on impaired loans for the three months ended March 31,
1996 and 1995, respectively.
Note 4: Pending Acquisition and Merger ("Manville"):
On March 8, 1996, the Federal Deposit Insurance Corporation
stated in writing that it intends to issue a letter of non-
objection to the conversion of Manville Savings Bank, SLA from a
New Jersey-chartered mutual savings bank to a New Jersey-
chartered stock savings bank by merging with, and into the
Raritan Savings Bank pursuant to a merger agreement. Raritan
Bancorp is to issue shares of conversion stock in an offering to
the depositors of Manville Savings. The conversion and merger
are being conducted pursuant to a plan of conversion. The plan
of conversion and the merger of Manville Savings into Raritan
Savings have been approved by the Commissioner of Banking of the
State of New Jersey. The merger is also subject to, among other
things, the approval of the plan of conversion by Manville
Savings' depositors.
The transaction is expected to close during the second quarter of
1996.
At March 31, 1996, Manville had total assets of $15.6 million and
total deposits of $14.1 million.
PAGE
<PAGE>
Item 2: Management's Discussion and Analysis of Financial
Condition and Results of Operations
At March 31, 1996, the Corporation's total assets decreased to
$346.8 million from $354.8 million at December 31, 1995. Net
loans and deposits increased to $194.5 million and $318.6
million, respectively, from $192.6 million and $315.0 million,
respectively, at December 31, 1995. Deposit inflows, exclusive
of interest credited, exceeded outflows by $.3 million during the
first three months of 1996.
Non-performing loans (over 90 days delinquent), real estate
acquired by foreclosure and non-accrual loans less than 90 days
delinquent totaled $2,588,000 or 1.33% of total net loans plus
real estate acquired by foreclosure at March 31, 1996, compared
to $1,225,000 or 0.64% of total net loans plus real estate
acquired by foreclosure at December 31, 1995.
During each of the three month periods ended March 31, 1996 and
1995, the Corporation added $75,000 respectively, to the
allowance for loan losses. The identical provisions were in
response to a strengthening economy and recovering real estate
market in central New Jersey, together with aggressive
recognition and resolution of existing and potential problem
areas. The overall loan portfolio is also reviewed when
calculating the provision.
Non-performing loans (over 90 days delinquent), real estate
acquired by foreclosure (included in Other Assets) and non-accrual
loans less than 90 days delinquent totaled $2,588,000 and
$1,225,000 at March 31, 1996 and December 31, 1995, respectively,
as follows:
<TABLE>
<CAPTION>
March 31, 1996 December 31, 1995
- ------------------------------------------------------------------------
Number Amount Number Amount
Description: of Loans (In thousands) of Loans (In Thousands)
- ------------------------------------------------------------------------
(Unaudited) (Audited)
- ------------------------------------------------------------------------
<S> <C> <C> <C> <C>
First mortgage loans 5 $ 831 3 $ 317
Home equity loans 1 37 2 36
Second mortgage loans - - 2 98
Consumer loans 1 12 - -
Commrecial loans 3 354 2 326
Loans with modified terms 3 271 3 278
- -------------------------------------------------------------------------
Total non-performing loans 13 1,505 12 1,055
Real estate acquired by
foreclosure (included 1 170 1 170
in Other Assets)
- -------------------------------------------------------------------------
14 1,675 13 1,225
Non-accrual loans less than
90 days delinquent 4 913 - -
- -------------------------------------------------------------------------
18 $2,588 13 $1,225
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
</TABLE>
Of the thirteen non-performing loans at March 31, 1996, twelve
($1,476,000) are collateralized by real estate and one ($29,000)
is unsecured. Real estate acquired by foreclosure consists of
one single-family residence. The four non-accrual loans are
secured by real estate.
Based on a review of each individual non-performing loan and non-
accrual loan less than 90 days delinquent, and loans rated loss,
doubtful, substandard and special mention according to regulatory
definition, a specific allowance of $1,238,000 has been allocated
to such loans, together with a general allowance of $1,368,000 on
the remaining loan portfolio taken as a whole.
On an ongoing basis, management reviews the overall adequacy of the
allowance for loan losses based on an evaluation of the risk
characteristics of the loan portfolio both on potential individual
problem loans,
PAGE
<PAGE>
and on the aggregate loan portfolio taken as a whole. Such factors
as the financial condition of the borrower, the fair value of the
underlying collateral and other items which, in management's
opinion, deserve recognition in estimating the adequacy of the
allowance for loan losses are evaluated. When reviewing the
adequacy of the allowance for loan losses, management reviews the
status of the current (and potential) non-performing loans,
delinquency trends, coverage ratios and various economic and other
factors, and determines what levels of allowance for loan losses
are necessary to absorb current losses in the loan portfolio.
Shareholders' equity totaled $25.1 million, or $17.60 per share at
March 31, 1996, compared to $26.3 million, or $17.66 per share at
December 31, 1995. The decrease in shareholders' equity is the
result of net income totaling $743,000 for the three months ended
March 31, 1996, the issuance of 3,000 shares of common stock for
$30,000 via the exercise of stock options, offset by a decrease in
the fair value adjustment of securities available-for-sale of
$308,000, dividend payments of $221,000 to shareholders and the
repurchase of 68,500 shares of the Corporation's common stock for
$1,476,000.
Results of Operations:
Raritan Bancorp Inc. and its subsidiary recorded net income of
$743,000 for the first quarter of 1996 compared to $653,000 for the
same period in 1995.
Net interest income increased for the first quarter of 1996 to
$2,799,000 from $2,671,000, or 4.8%, for the comparable quarter in
1995, as a result of an increase in average net earning assets to
$34.9 million from $29.2 million a year earlier, offset by a
decrease in the interest rate spread to 2.92% from 2.99% a year
earlier. Higher cost of consumer deposit rates (when compared to
the first three months of 1995) contributed to the decrease in the
interest rate spread.
Net interest income for the first three months of 1996 was also
affected by the loss of interest on non-performing loans, non-
accrual loans and real estate acquired by foreclosure. Generally,
when a loan becomes more than ninety days delinquent, the
Corporation ceases to accrue income and deducts interest income on
that loan which had previously been accrued into interest income
for such period of time. The loss of interest on loans charged
off, non-performing loans, non-accrual loans,and real estate
acquired by foreclosure for the first three months of 1996 was
approximately $55,000 compared to $75,000 for the corresponding
1995 period.
The provision for loans losses for the first quarter of both 1996
and 1995 was $75,000. As described in the discussion of the
Corporation's financial condition, the identical provisions were in
response to a strengthening economy and recovering real estate
market in central New Jersey, together with aggressive recognition
and resolution of existing and potential problem areas. The
overall loan portfolio is also reviewed when calculating the
provision.
Management calculated the provision based on a review of the
required allowance at March 31, 1996. All non-performing loans and
loans rated loss, doubtful, substandard and special mention
according to regulatory definition were reviewed and a specific
allowance of $1,238,000 was determined to be adequate by comparing
the existing loan balances with the value of supporting collateral.
A review of the remaining loan portfolio was made and a general
allowance of approximately $1,368,000 was deemed reasonable and was
established by assigning risk factors to the various loan
categories based on the collateral securing the appropriate loans
and historical trends. The first quarter, 1996 provision of
$75,000 was then charged to operations to establish the $2,606,000
allowance for loan losses at March 31, 1996.
Other expenses for the first three months of 1996 were $1,717,000
compared to $1,707,000 for the corresponding period in 1995.
Salaries and employee benefits increased $54,000, or 6.3%, to
$907,000 for the first quarter of 1996 from $853,000 for the
comparable period in 1995. Merit and cost of living adjustments
contributed to the increase. Occupancy expense increased $40,000,
or 25.2%, for the first
<PAGE>
<PAGE>
quarter of 1996, compared to the corresponding 1995 period
primarily as a result of increased snow removal costs incurred
during 1996. The FDIC insurance premium decreased $126,000, or
74.6%, to $43,000 for the first quarter of 1996 from $169,000 for
the comparable period in 1995 as a result of the reduction in the
FDIC's Bank Insurance Fund's insurance premium rates. Net cost of
operation of other real estate decreased $12,000 for the first
quarter of 1996 from the corresponding period in 1995 as most
provisions and expenditures had already been made in prior periods
to bring the properties to saleable condition. Other operating
expenses increased $54,000, or 10.7%, to $560,000, for the first
quarter of 1996 when compared to the first quarter of 1995.
Increases in outside service bureau expenses, supervisory
examination fees, consultant fees and marketing expenses partially
offset by a decrease in legal fees contributed to the increase.
The Corporation's annualized return on average total assets and
average shareholders' equity was 0.86% and 11.46%,respectively, for
the first quarter of 1996, compared to 0.79% and 10.81%,
respectively, for the comparable period in 1995.
Liquidity and Capital Resources
The Corporation's liquidity is a measure of its ability to fund
loans and withdrawal of deposits in a cost-effective manner. The
Corporation's principal sources of funds are deposits, scheduled
amortization and repayment of loan principal, maturities of
investment securities and funds provided by operations. At March,
31, 1996, the Corporation's liquid assets (cash and cash
equivalents and investment securities maturing in one year or less)
totaled $41.0 million which represents 11.8% of total assets.
The Corporation's main liquidity demands come from loan
disbursements which totaled approximately $14.3 million for the
first three months of 1996. At March 31, 1996 outstanding
commitments to extend credit totaled $32.8 million. Management
believes that the Corporation has adequate sources of liquidity to
fund these commitments.
The Bank has a borrowing arrangement with the Federal Home Loan
Bank of New York which can provide additional funds, if needed. At
March 31, 1996, this borrowing capacity totaled $35.4 million.
Both the Corporation and the Bank are subject to regulatory capital
requirements mandated by the Federal Reserve Board (FRB) and the
Federal Deposit Insurance Corporation (FDIC), respectively. Both
are required to maintain minimum capital requirements, defined by
both the FRB and FDIC as risk-based ratio capital (Tier 1 and
Total) and leverage capital ratio.
The following chart presents the minimum capital requirement ratios
and the actual ratios for both the
Corporation and the Bank:
<PAGE>
<TABLE>
<CAPTION>
March 31, 1996
- ----------------------------------------------------------------------------------------------------
Required Actual Excess
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
THE CORPORATION:
Risk-based capital:
Tier 1 4.00% 13.576% 9.576%
Total 8.00 14.829 6.829
Leverage capital ratio 4.00 6.98 2.98
THE BANK:
Risk-based capital:
Tier 1 4.00% 13.562% 9.562%
Total 8.00 14.816 6.816
Leverage capital ratio 4.00 6.97 2.97
</TABLE>
<PAGE>
<PAGE>
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings.
Not applicable.
Item 2. Changes in Securities.
Not applicable.
Item 3. Defaults Upon Senior Securities.
Not applicable.
Item 4. Submission of Matters to a Vote of Securities Holders.
(a) The annual meeting of the security holders of Raritan
Bancorp Inc. took place on April 4, 1996.
(b)(i) The following directors were elected to a three-year term:
<TABLE>
<CAPTION>
Number of Number of
Expiration Votes Votes
Name of Term in Favor Withheld
- ---------------------------------------------------------------------------
<S> <C> <C> <C>
William T. Anderson, M.D. 1999 1,309,876 52,416
William W. Crouse 1999 1,310,976 51,316
</TABLE>
(b)(ii) The following directors' term of office continued
after the meeting:
<TABLE>
<CAPTION>
Expiration
Name of Term
- -------------------------------------------------
<S> <C>
William T. Kelleher, Jr. 1997
Thomas F. Tansey 1997
Arlyn D. Rus 1998
Richard E. Fischer 1998
</TABLE>
(c) KPMG Peat Marwick LLP was ratified as the Corporation's
auditors by a vote of 1,314,960 shares For, 4,565
shares Against and 12,573 shares Abstained.
PAGE
<PAGE>
(d) A shareholder proposal regarding the sale of the
Corporation was defeated by a vote of 954,574 shares
Against, 144,750 shares For and 12,573 shares
Abstained.
Item 5. Other Information.
Not applicable.
Item 6. Exhibits and Reports on Form 8-K.
Not applicable.
PAGE
<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.
RARITAN BANCORP INC.
(Registrant)
5/1/96 Arlyn D. Rus
Date (Signature)
Chairman, President and CEO
Director
5/1/96 Thomas F. Tansey
Date (Signature)
Executive Vice President,
Chief Operating Officer and
Treasurer
Director
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