SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A1
Items 1 and 2 to Part I are restated herein in their entirety to reflect
changes made in the Notes to Consolidated Financial Statements (unaudited) and
in Management's Discussion and Analysis. No substantive changes were made
in the Items of Part II.
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1993.
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ________TO_______.
Commission file number: 0-15826
Washington Bancorp, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 22-2800126
------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification)
101 Washington Street, Hoboken , New Jersey 07030
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(Address of principal executive offices) (zip code)
(201) 659-0013
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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 since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES ___X___ NO _____
Number of shares of common stock, par value $.10 per share, outstanding as of
September 30, 1993: 2,307,187.
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements PAGE
Consolidated Financial Statements of Washington Bancorp, Inc.
Consolidated Balance Sheets - September 30, 1993(unaudited)
and December 31, 1992 3
Consolidated Statements of Income - For the three and nine
months ended September 30, 1993 and 1992(unaudited) 4
Consolidated Statements of Cash Flows - For the nine months ended
September 30, 1993 and 1992(unaudited) 5
Notes to Consolidated Financial Statements(unaudited) 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 13
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 26
Item 2. Changes in Securities 26
Item 3. Defaults Upon Senior Securities 26
Item 4. Submission of Matters to a Vote of Security Holders 26
Item 5. Other Information 26
Item 6. Exhibits and Reports on Form 8-K 26
2
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<TABLE>
<CAPTION>
Washington Bancorp, Inc. & Subsidiary September 30, December 31,
Consolidated Balance Sheets 1993 1992
------------- -------------
(unaudited)
<S> <C> <C>
Assets
Cash and due from banks $ 5,150,674 $ 4,336,433
Federal funds sold 2,200,000 3,000,000
Investment securities:
Held-for-sale (market value $41,051,000 and $1,954,000) 40,441,214 1,936,700
Held-to-maturity (market value $17,218,000 and $57,430,000) 16,862,201 56,793,662
Mortgage -backed securities:
Held-for-sale (market value $8,927,000) 8,924,240 -
Held-to-maturity (market value of $11,455,000 and $7,197,000) 11,480,652 7,213,343
Loans:
Held-for-sale (market value $5,322,000 and $9,032,000) 5,152,589 9,000,000
In portfolio, (net of allowance for losses of $2,855,000 and $2,776,000) 178,737,499 182,500,728
Other real estate owned ("REO"), net 7,799,263 12,998,022
Accrued interest receivable 2,415,992 2,606,893
Premises and equipment, net 2,707,938 2,840,090
Federal Home Loan Bank stock, at cost 1,711,300 1,632,000
Income tax refund receivable - 320,000
Deferred income tax asset 550,000 250,000
Other assets 463,468 342,758
------------ ------------
TOTAL ASSETS $284,597,030 $285,770,629
============ ============
Liabilities and Stockholders' Equity
Liabilities:
Interest-bearing deposits $239,251,337 $244,249,625
Noninterest-bearing deposits 9,079,623 8,373,055
------------ ------------
Total deposits 248,330,960 252,622,680
Advances from Federal Home Loan Bank ("FHLB") 400,000 -
Mortgage escrow deposits 2,085,776 1,393,709
Accrued interest payable 222,814 336,657
Other liabilities 1,212,464 948,538
------------ ------------
TOTAL LIABILITIES 252,252,014 255,301,584
------------ ------------
Commitments and Contingencies
Stockholders' Equity:
Preferred stock, par value $.10 per share, 3,000,000 shares
authorized, no shares issued and outstanding - -
Common stock, par value $.10 per share, 6,000,000 shares
authorized, 2,307,187 shares issued and outstanding 230,718 230,718
Paid-in capital 22,498,778 22,498,778
Retained earnings 9,750,520 7,919,549
------------ ------------
32,480,016 30,649,045
Deferred compensation-Management Recognition and Retention Plan ("MRP") (135,000) (180,000)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 32,345,016 30,469,045
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $284,597,030 $285,770,629
============ ============
</TABLE>
See notes to consolidated financial statements
3
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<CAPTION>
Washington Bancorp, Inc. & Subsidiary
Consolidated Statements Of Income (unaudited) Three months ended Nine months ended
September 30, September 30,
------------------------------ ---------------------------
1993 1992 1993 1992
Interest income: ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
Loans, including fees $3,632,422 $4,529,252 $11,320,137 $13,859,957
U.S. Treasury obligations 453,327 757,124 1,062,337 2,545,549
Mortgage-backed securities 342,901 56,899 776,169 63,148
Federal funds sold 48,167 57,295 144,607 243,149
Dividends 30,194 30,600 105,650 103,806
Due from banks 11,197 10,310 35,536 33,420
Other investment securities 115,587 - 659,963 -
---------- ---------- ---------- -----------
Total interest income 4,633,795 5,441,480 14,104,399 16,849,029
---------- ---------- ---------- -----------
Interest expense:
Deposits 2,148,280 2,890,948 6,812,063 9,525,288
Borrowed funds 4,921 - 12,889 1,350
---------- ---------- ---------- -----------
Total interest expense 2,153,201 2,890,948 6,824,952 9,526,638
---------- ---------- ---------- -----------
Net interest income 2,480,594 2,550,532 7,279,447 7,322,391
Provision for losses on loans 50,000 400,000 350,000 750,000
---------- ---------- ---------- -----------
Net interest income after provision for losses on loans 2,430,594 2,150,532 6,929,447 6,572,391
---------- ---------- ---------- -----------
Other income:
Service charges on deposit accounts 44,127 46,023 131,664 138,743
Gain on sale of loans,net (2,728) 131,513 141,205 196,845
Security gains, net - 1,196,890 29,662 1,211,774
Other 65,594 87,639 334,698 217,515
---------- ---------- ---------- -----------
Total other income 106,993 1,462,065 637,229 1,764,877
---------- ---------- ---------- -----------
Other expenses:
Salaries and employee benefits 814,474 869,012 2,605,238 2,709,481
REO expense, net 371,622 251,273 922,965 615,437
Occupancy and equipment expenses, net 224,442 282,448 633,250 837,151
Federal Deposit Insurance Corporation ("FDIC") assessment 162,406 148,683 528,110 448,372
Security losses, net 12,790 - - -
Other 465,136 536,948 1,661,142 1,853,757
---------- ---------- ---------- -----------
Total other expenses 2,050,870 2,088,364 6,350,705 6,464,198
---------- ---------- ---------- -----------
Income before income taxes, extraordinary item and
cumulative effect of change in accounting principle 486,717 1,524,233 1,215,971 1,873,070
Income tax (expense)/benefit (179,000) (559,000) 315,000 (639,000)
---------- ---------- ---------- -----------
Income before extraordinary item and cumulative effect
of change in accounting principle 307,717 965,233 1,530,971 1,234,070
Extraordinary item - 481,000 - 556,000
Cumulative effect of change in accounting principle - - 300,000 -
---------- ---------- ---------- -----------
NET INCOME $ 307,717 $1,446,233 $1,830,971 $ 1,790,070
========== ========== ========== ===========
Income per share:
Income before extraordinary item and cumulative
effect of change in accounting principle $ 0.14 $ 0.43 $ 0.68 $ 0.55
Extraordinary item - 0.21 - 0.24
Cumulative effect of change in accounting principle - - 0.13 -
---------- ---------- ---------- -----------
Earnings Per Share $ 0.14 $ 0.64 $ 0.81 $ 0.79
========== ========== ========== ===========
Weighted average number of shares outstanding 2,271,965 2,267,868 2,270,312 2,266,775
========== ========== ========== ===========
</TABLE>
See notes to consolidated financial statements
4
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<CAPTION>
Washington Bancorp, Inc. and Subsidiary
Consolidated Statements of Cash Flows
(Unaudited) Nine months ended September 30,
-------------------------------
1993 1992
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<S> <C> <C>
Cash Flows from Operating Activities:
Interest received $ 15,533,572 $ 17,431,666
Loan fees received 216,988 306,909
Service charges on deposits received 131,664 138,743
Miscellaneous other income received 198,297 217,515
Income tax refund received 868,577 -
Income taxes paid (320,858) -
Interest paid (6,938,795) (9,871,103)
Cash paid to employees and for other expenses (5,329,849) (5,682,815)
------------- ------------
Net cash provided by operating activities 4,359,596 2,540,915
------------- ------------
Cash Flows from Investing Activities:
Proceeds from maturity of term federal funds sold - 9,000,000
Proceeds from sales of investment securities 8,998,633 54,475,594
Proceeds from maturities of investment securities 32,685,721 -
Purchase of investment securities (2,452,068) (44,061,650)
Proceeds from sales of mortgage-backed securities 2,036,602 1,533,314
Principal collected on mortgage-backed securities 3,908,202 30,018
Purchase of mortgage-backed securities (14,618,435) (7,785,292)
Proceeds from sales of securites held for sale 955,323 -
Proceeds from maturities of securities held for sale 2,308,118 -
Purchase of securities held for sale (47,151,187) -
Proceeds from sales of mortgage loans held for sale 5,141,205 15,717,358
Purchase of loans - (10,086,000)
Net decrease/(increase) in loans 3,467,940 (8,583,910)
Recoveries on loans charged-off 196,841 206,209
Capital expenditures (61,810) (252,866)
Proceeds from sales of REO, net of financed sales and closing costs 3,518,513 718,096
Proceeds from redemption of FHLB stock - 520,300
Purchase of FHLB Stock (79,300) -
------------- ------------
Net cash (used in)/provided by investing activities (1,145,702) 11,431,171
------------- ------------
Cash Flows from Financing Activities:
Net increase in savings and transaction accounts 4,973,513 12,100,363
Net decrease in certificates of deposit (9,265,233) (17,931,159)
Net increase in mortgage escrow deposits 692,067 412,810
Advances from FHLB 400,000 -
------------- ------------
Net cash used in financing activities (3,199,653) (5,417,986)
------------- ------------
Net Increase in Cash and Cash Equivalents 14,241 8,554,100
Cash and Cash Equivalents, beginning of period 7,336,433 13,970,190
------------- ------------
Cash and Cash Equivalents, end of period $ 7,350,674 $ 22,524,290
============= ============
</TABLE>
See notes to consolidated financial statements
5
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<CAPTION>
Washington Bancorp, Inc. and Subsidiary
Consolidated Statements of Cash Flows (continued) Nine months ended September 30,
(Unaudited) -------------------------------
1993 1992
--------------- --------------
<S> <C> <C>
Reconciliation of Net Income to Net Cash Provided by Operating Activities:
Net income $ 1,830,971 $ 1,790,070
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 193,962 306,419
Provision for losses on loans and REO 1,018,942 1,206,901
Recognition of deferred compensation expense 45,000 141,600
Deferred loan fees (138,891) (82,342)
Deferred taxes (300,000) -
Gain on sales of investment and mortgage-backed securities (29,662) (1,245,588)
Loss on sales of investment and mortgage-backed securities - 33,814
Gain on sales of mortgages (141,205) (196,845)
Gain on sales of REO (378,799) (349,930)
Loss on sales of REO 124,853 32,879
Premium amortization, net of discount earned 1,594,151 575,774
Changes in operating assets and liabilities:
Decrease in income tax refund receivable 320,000 -
Decrease in accrued interest receivable 190,901 396,114
Increase in other assets (120,710) (63,623)
Decrease in accrued interest payable (113,843) (344,465)
Increase in other liabilities 263,926 340,137
------------- ------------
Net cash provided by operating activities $ 4,359,596 $ 2,540,915
============= ============
Supplemental Schedule of Noncash Investing and Financing Activities:
Transfer of loans to REO $ 3,256,236 $ 1,054,942
============= ============
Portion of REO sales financed by the Bank $ 4,549,475 $ 2,427,250
============= ============
Transfer of loans to mortgage loans held for sale, net $ - $ 24,520,513
============= ============
</TABLE>
See notes to consolidated financial statements
6
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WASHINGTON BANCORP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED SEPTEMBER 30, 1993
Note 1. The interim consolidated financial statements included herein have
been prepared by Washington Bancorp, Inc.(the "Company"), without
audit, pursuant to the rules and regulations of the Securities and
Exchange Commission, and should be read in conjunction with the
audited consolidated financial statements of the Company for the year
ended December 31, 1992. Certain information and note disclosure
normally included in consolidated financial statements prepared in
accordance with generally accepted accounting principles have been
omitted pursuant to such rules and regulations, although the Company
believes that the disclosures being made are adequate to make the
information presented not misleading. In the opinion of management,
these consolidated financial statements reflect all adjustments(all of
which are of a normal recurring nature) which are necessary for a fair
statement of results for the interim periods. The results for the
interim periods are not necessarily indicative of results to be
expected for the entire year.
Note 2. The consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiary, Washington Savings Bank (the
"Bank"). All material intercompany balances and transactions have been
eliminated.
Note 3. Income before extraordinary item and cumulative effect of change in
accounting principle per share and net income per share were computed
by dividing net income for each period by the weighted average number
of shares outstanding (which excludes unvested shares of the MRP for
all periods) and common stock equivalents. Options granted under the
Company's stock option plan are considered stock equivalents for
purposes of earnings per share data.
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Note 4. The Bank's primary market area for lending encompasses Hudson and
Bergen Counties, New Jersey. The following tables set forth the
composition of the Bank's loans, nonperforming loans, REO, and
allowances for losses on loans and REO as of the dates and for the
periods indicated:
September 30, 1993
(Unaudited) December 31, 1992
------------ ------------
LOANS
-----
Real Estate:
1-4 family $117,160,287 $125,858,058
Multi-family/commercial 58,145,731 52,742,859
Construction 2,957,020 2,533,164
------------ ------------
Total real estate loans 178,263,038 181,134,081
Commercial/financial 3,006,842 3,551,679
Consumer and other loans 1,324,001 1,731,241
------------ ------------
Total loans 182,593,881 186,417,001
Less: Unearned income 80,319 87,541
Deferred loan fees 921,063 1,052,732
Allowance for losses 2,855,000 2,776,000
------------ ------------
Loans, net $178,737,499 $182,500,728
============ ============
NONPERFORMING LOANS
-------------------
Real estate loans:
1-4 family $ 4,594,637 $ 5,527,941
Multi-family/commercial 11,541,836 1,648,146
Construction 244,000 944,000
------------ ------------
Total real estate loans 16,380,473 8,120,087
Commercial/financial - 224,591
Consumer and other loans 34,426 224,871
------------ ------------
Total nonaccrual loans 16,414,899 8,569,549
Troubled debt restructurings:
Commercial/financial 174,288 236,788
------------ ------------
Total nonperforming loans $ 16,589,187 $ 8,806,337
============ ============
At September 30, 1993, the multi-family/commercial nonaccrual
loan category includes a loan for approximately $9.0 million (see
next page for further information).
REAL ESTATE OWNED
-----------------
Acquired by foreclosure or
deed in lieu of foreclosure $ 4,974,000 $ 7,460,541
Loans foreclosed in-substance 4,548,263 7,339,481
------------ ------------
Total REO 9,522,263 14,800,022
Less allowance for losses 1,723,000 1,802,000
------------ ------------
REO, net $ 7,799,263 $ 12,998,022
============ ============
ALLOWANCES FOR LOSSES Loans REO Total
--------------------- ---------- ---------- ----------
Balance,December 31, 1992 $2,776,000 $1,802,000 $4,578,000
Provision for losses 350,000 668,942 1,018,942
Recoveries 196,554 - 196,554
Losses charged-off (467,554) (747,942) (1,215,496)
---------- ---------- ----------
Balance, September 30, 1993 $2,855,000 $1,723,000 $4,578,000
(unaudited) ========== ========== ==========
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During the first quarter of 1993, a Chapter 11 bankruptcy petition was
filed by the obligor of an approximately $9.0 million loan, a loan on
which the Bank currently has a first mortgage and an
assignment-of-rents (the "Bankruptcy Loan"). On November 10, 1993, the
Court dismissed the bankruptcy petition (the "Court Order").
Nevertheless, the Bank has not received any of the rental payments
since April 1993, as the payments were made to a debtor-in-possession
account. As a result of the Court Order, the Bank will be seeking to
obtain a release of the rental payments in the debtor-in-possession
account. The interest income which would have been recorded had the
rental payments been received would have approximated $222,000 and
$444,000 for the three and nine months ended September 30, 1993,
respectively. The Bank has classified the Bankruptcy Loan as a
nonaccrual loan. Management believes that the Bank has adequate
collateral with respect to the Bankruptcy Loan and anticipates
collection of the outstanding principal balance.
Note 5. In the normal course of business, the Bank is a party to financial
instruments with off-balance-sheet risk which are properly not
recorded in the consolidated financial statements. At September 30,
1993, the Bank's exposure to credit loss in the event of
nonperformance by the potential borrowers is represented by the
contractual amount of the financial instruments as follows:
Expiration
Contractual Interest Dates
Amount Rates Through
----------- ---------- ------------
Loan commitments-
variable........ $2,287,000 6.0%- 8.9% December 1993
Loan commitments-
fixed........... $4,790,000 6.2%-10.5% December 1993
Lines of credit-
variable........ $ 933,000 7.5%-11.0% September 1994
Undisbursed construction
loans-fixed..... $1,477,000 6.2%-10.25% June 1995
Note 6. In October 1991, a complaint was filed by a former officer in New
Jersey Superior Court against the Company, the Bank and certain
directors and officers seeking unspecified damages relating to the
termination of such officer's employment. The Company and individual
defendants have filed an answer and have asserted certain
counterclaims. Although this complaint was recently dismissed, it was
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dismissed without prejudice to the plaintiff's right to refile the
complaint by March 31, 1994. The Company understands that the
complaint will be refiled on or before that date.
In April 1992, a complaint was filed in the New Jersey Superior Court
against the Company and the Bank seeking unspecified damages and
alleging violations of state securities laws, certain banking laws and
state common law. This lawsuit is in the discovery stage.
Management believes that the defendants have meritorious defenses in
both of these matters and intends to vigorously defend these matters.
Management believes that these lawsuits will not have a material
adverse impact on the financial condition of the Company or the Bank;
however, given the fluctuations in results of operations during recent
years, management cannot predict the impact on the Company's or the
Bank's results of operations.
Note 7. On August 13, 1991, the Company signed a Memorandum of Understanding
(the "Company-MOU") with the Federal Reserve Bank of New York (the
"FRB") in connection with its examination of the Company as of
December 31, 1990. The Company-MOU requires the Company, among other
things, to periodically provide the FRB with certain additional
financial and operational information, restricts dividend payments,
and obligates the Company to provide the FRB with notice prior to
making large cash expenditures outside the ordinary course of
business, or making additions to senior executive management or the
board of directors. The Company-MOU also states that the Company
should not consider expansion of its activities at the present time.
In the opinion of management, the Company is in substantial compliance
with the Company-MOU. During the first half of 1993, the FRB completed
its examination of the Company as of December 31, 1992. The result was
that the Company-MOU remains in place for 1993 without revision.
During the third quarter, the Federal Deposit Insurance Corporation
(the "FDIC") completed its examination of the Bank as of August 2,
1993. As a result of that examination, the FDIC rescinded the Bank of
its Memorandum of Understanding which the Bank had signed on December
22, 1992 with the FDIC and the State of New Jersey Department of
Banking in connection with their examination as of July 13, 1992.
10
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Note 8. During the second quarter of 1993, the Financial Accounting Standards
Board (the "FASB") issued Statement of Financial Accounting Standards
No. 115: "Accounting for Certain Investments in Debt and Equity
Securities" ("SFAS 115"). SFAS 115 requires entities to classify their
securities into either a held-to-maturity, available-for-sale or
trading category. Each of these classifications will require a
different basis of accounting. Held-to-maturity securities will be
accounted for at amortized cost with fair value changes not
recognized. Available-for-sale securities will be accounted for at
fair value with fair value changes reported as a net amount in a
separate component of stockholders' equity. Trading securities will be
accounted for at fair value with fair value changes reported in the
income statement. SFAS 115 is effective for fiscal years beginning
after December 15, 1993. Earlier application is not required by the
FASB; however, if implemented early, entities are permitted to
initially apply SFAS 115 as of the end of a fiscal year for which
annual financial statements have not previously been issued. As of
September 30, 1993, the effect on the Company of implementing SFAS 115
early would be to increase stockholders' equity by approximately
$405,000. The Company has decided to implement SFAS 115 early. Such
effect will be reported as a cumulative effect of a change in
accounting principle as of the end of fiscal year 1993.
Note 9. On November 8, 1993, the Company announced that it had signed a
definitive agreement (the "agreement") providing for the merger of the
Company with and into Hubco, Inc. of Union City, New Jersey. Under the
terms of the agreement, shareholders of the Company will have the
right to receive either $16.10 in cash or .6708 of a share of new
Series A Convertible Preferred Stock of Hubco, Inc. for each share of
the Company's common stock. In addition, the Company issued an option
to Hubco, Inc., exercisable in certain circumstances, to acquire
765,000 shares of its authorized but unissued stock at a price of
$11.50 per share. The agreement is subject to several conditions,
including regulatory and shareholder approvals.
No accruals for merger related expenses have been made in the
accompanying financial statements. Such expenses will be recognized in
subsequent quarters after a review of the nature and extent of
possible charges is assessed.
Note 10. During the third quarter of 1993, the Bank approved in principal,
subject to certain conditions, a Deferred Compensation Plan for
Outside Directors (the "Plan"), which covers any outside director who
has served in that capacity for at least five consecutive calendar
years. Eligibility, benefits and vesting will continue should an
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outside director subsequently become an officer or employee. An
outside director becomes fully vested upon either fifteen years of
service as director, sixty-five years of age, death, or change in
control, as described below. Subsequent to retirement, the Plan
provides an annual benefit equal to (a) 50% of the outside director's
annual retainer in effect at the time of retirement (the "then current
retainer"), plus (b) 5% of the then current retainer for each
additional year of service in excess of 5 years (up to a maximum of 10
additional years). Benefits are based on actuarial assumptions then in
effect under the Retirement Plan of Washington Savings Bank in
Retirement System Group Inc. Benefits payable under the Plan shall be
paid directly from the general assets of the Company. The Company is
not obligated to set aside, earmark or escrow funds or other assets to
satisfy its obligations under this Plan. At September 30, 1993, the
accumulated postretirement benefit obligation of the Plan included in
other liabilities was $25,000.
In the event of a change in control of the Company, each outside
director (regardless of whether he has served as a director for five
years) who is neither an officer nor an employee of the Bank or the
Company shall receive four times the then current retainer. The
cumulative liability under a change in control of the Company is
approximately $252,000 (refer to footnote 9). Such cumulative
liability is not reflected in the financial statements as of September
30, 1993.
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MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
A. General
-------
On November 8, 1993, Washington Bancorp, Inc. (the "Company"), the
parent holding company of Washington Savings Bank (the "Bank"),
announced that it had signed a definitive agreement (the "agreement")
providing for the merger of the Company with and into Hubco, Inc. of
Union City, New Jersey. Under the terms of the agreement, shareholders
of the Company will have the right to receive either $16.10 in cash or
.6708 of a share of new Series A Convertible Preferred Stock of Hubco,
Inc. for each share of the Company's common stock. In addition, the
Company issued an option to Hubco, Inc., exercisable in certain
circumstances, to acquire 765,000 shares of its authorized but
unissued stock at a price of $11.50 per share. The agreement is
subject to several conditions, including regulatory and shareholder
approvals.
During the third quarter, the Federal Deposit Insurance Corporation
(the "FDIC") completed its examination of the Bank as of August 2,
1993. As a result of that examination, the FDIC relieved the Bank of
its Memorandum of Understanding which the Bank had signed on December
22, 1992 with the FDIC and the State of New Jersey Department of
Banking in connection with their examination as of July 13, 1992.
The Company reported net income for the quarter ended September 30,
1993 of $308,000, or $.14 per share, as compared with net income of
$1,446,000, or $.64 per share, for the quarter ended September 30,
1992. The decrease in net income was primarily due to a decrease in
gains on the sale of assets of approximately $1.2 million. In
addition, the Bank did not recognize interest income during the
current quarter on the Bank's largest loan, a loan in bankruptcy (see
below). For more information regarding results of operations, refer to
"Results of Operations for the three and nine months ended September
30, 1993 and 1992" below.
During the first quarter of 1993, a Chapter 11 bankruptcy petition was
filed by the obligor of an approximately $9.0 million loan, a loan on
which the Bank currently has a first mortgage and an
assignment-of-rents (the "Bankruptcy Loan"). On November 10, 1993, the
Court dismissed the bankruptcy petition (the "Court Order").
Nevertheless, the Bank has not received any of the rental payments
since April 1993, as the payments were made to a debtor-in-possession
account. As a result of the Court Order, the Bank will be seeking to
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obtain a release of the rental payments in the debtor-in-possession
account. The interest income which would have been recorded had the
rental payments been received would have approximated $222,000 and
$444,000 for the three and nine months ended September 30, 1993,
respectively. The Bank has classified the Bankruptcy Loan as a
nonaccrual loan. Management believes that the Bank has adequate
collateral with respect to the Bankruptcy Loan and anticipates
collection of the outstanding principal balance.
Nonperforming assets decreased $0.1 million to $24.4 million ($16.6
million in nonperforming loans and $7.8 million of REO) at September
30, 1993 from $24.5 million ($17.0 million of nonperforming loans and
$7.5 million of REO) at June 30, 1993. The decrease was in the 1-4
family category, and was partially offset by an increase in the
multi-family/commercial real estate category where, in accordance with
a recent FDIC examination as of August 2, 1993, the Bank classified,
as nonaccrual, several loans which were less than 90 days past due.
Excluding the aforementioned Bankruptcy Loan, (i) the allowance for
losses on loans was 37% of nonperforming loans and 1.6% of total loans
at September 30, 1993, as compared with 34% and 1.5%, respectively, as
of June 30, 1993 and (ii) the allowance for losses on loans, when
coupled with the allowance for losses on REO, represented 26% of
nonperforming assets as of September 30, 1993, as compared with 25% as
of June 30, 1993. If the Bankruptcy Loan is included, (i) the
allowance for losses on loans was 17% of non-performing loans and 1.6%
of total loans at September 30, 1993 and (ii) the allowances for
losses on loans and REO represented 18% of non-performing assets at
September 30, 1993.
Subsequent to September 30, 1993, an $8.4 million loan yielding 9.8%
was prepaid. The loan had been the Bank's second largest loan and had
been one of two loans, the other being the Bankruptcy Loan mentioned
above, with a concentration greater than 10% of stockholders' equity.
During the nine months ended September 30, 1993, securities as a
percentage of total assets increased to 27% at September 30, 1993 from
24% at December 31, 1992. This increase reflects the reinvestment of
proceeds from prepayments of generally higher yielding loans into
lower yielding securities.
With respect to the liability side of the balance sheet, the passbook
savings rate was decreased 25 basis points to 2.75% in September 1993
in connection with reductions in rates offered on other deposit
instruments. Passbook
14
<PAGE>
<PAGE>
rates and balances were 2.75% and $103,094,000 at September 30, 1993
as compared to 3.25% and $99,347,000 at December 31, 1992.
During the third quarter of 1993, the Bank approved in principal,
subject to certain conditions, a Deferred Compensation Plan for
Outside Directors (the "Plan"), which covers any outside director who
has served in that capacity for at least five consecutive calendar
years. Eligibility, benefits and vesting will continue should an
outside director subsequently become an officer or employee. An
outside director becomes fully vested upon either fifteen years of
service as director, sixty-five years of age, death, or change in
control, as described below. Subsequent to retirement, the Plan
provides an annual benefit equal to (a) 50% of the outside director's
annual retainer in effect at the time of retirement (the "then current
retainer"), plus (b) 5% of the then current retainer for each
additional year of service in excess of 5 years (up to a maximum of 10
additional years). Benefits are based on actuarial assumptions then in
effect under the Retirement Plan of Washington Savings Bank in
Retirement System Group Inc. Benefits payable under the Plan shall be
paid directly from the general assets of the Company. The Company is
not obligated to set aside, earmark or escrow funds or other assets to
satisfy its obligations under this Plan. At September 30, 1993, the
accumulated postretirement benefit obligation of the Plan included in
other liabilities was $25,000.
In the event of a change in control of the Company, each outside
director (regardless of whether he has served as a director for five
years) who is neither an officer nor an employee of the Bank or the
Company shall receive four times the then current retainer. The
cumulative liability under a change in control of the Company is
approximately $252,000 (refer to footnote 9). Such cumulative
liability is not reflected in the financial statements as of September
30, 1993.
B. Results of Operations for the three months ended September 30, 1993
and 1992
----------------------------------------------------------------------
Net income:
The Company's net income for the quarter ended September 30, 1993 was
$308,000 or $.14 per share, as compared with net income of $1,446,000,
or $.64 per share, for the quarter ended September 30, 1992. The
Company's income before extraordinary item and cumulative effect of a
change in accounting principle for the quarter ended September 30,
1993 was also $308,000 or $.14 per share, as
15
<PAGE>
<PAGE>
compared with $965,000, or $.43 per share, for the quarter ended
September 30, 1992. The decrease of $1,138,000 in net income was
primarily due to a decrease in net security gains of $1,210,000; a
decrease in gains on sale of loans of $134,000; a net increase of
$101,000 in income taxes; and a decrease in net interest income of
$70,000. These items were partially offset by a decrease in the
provision for losses on loans of $350,000.
Net interest income:
Net interest income decreased $70,000, or 2.7%, for the three months
ended September 30, 1993 as compared with the corresponding period
last year. The decrease from 1992 was primarily due to the $222,000 of
aforementioned foregone interest from the Bankruptcy Loan, as well as
a decline in the net interest rate spread, offset in part by an
increase in the ratio of interest-earning assets to interest-bearing
liabilities. The net interest rate spread was 3.22% for the three
months ended September 30, 1993 as compared to 3.34% for the three
months ended September 30, 1992. The ratio of interest-earning assets
to interest-bearing liabilities was 1.14 for the three months ended
September 30, 1993 as compared to 1.10 for the three months ended
September 30, 1992.
Total interest income decreased $808,000, or 15%, due primarily to
lower yields earned on most interest-earning asset categories and a
change in the mix of interest-earning assets. Lower yields were a
result of the foregone interest on the above-mentioned Bankruptcy Loan
and the continued declining rate environment. The mix of
interest-earning assets negatively impacted interest income as the
Bank invested excess funds from mortgage loan and investment
securities sales, which had earned a weighted average rate of 8.15%
for the three months ended September 30, 1992, primarily in
mortgage-backed securities earning a weighted average rate of 5.95%.
Total interest expense decreased $738,000, or 26%, due primarily to
lower rates paid on all categories of interest-bearing liabilities, a
decrease in the volume of total interest-bearing liabilities, and the
continued change in the mix of interest-bearing liabilities. Average
rates for interest-bearing liabilities declined to 3.54% for the three
months ended September 30, 1993 from 4.65% for the three months ended
September 30, 1992. The average balance of total interest-bearing
liabilities declined to $240.9 million from $247.4 million as a result
of net deposit outflows. The change in the mix of interest-bearing
liabilities decreased interest expense as the average balance of
savings accounts increased to 43%
16
<PAGE>
<PAGE>
of total interest-bearing liabilities from 39%, while the average
balance of certificates of deposit decreased to 52% from 56%.
Generally, interest rates paid on savings accounts are lower than
interest rates paid on certificates of deposit.
(Refer to rate/volume analysis and yield/cost analysis on pages 23 and
24, respectively, for further detail.)
Provision for losses on loans:
The provision for losses on loans was $50,000 for the three months
ended September 30, 1993 as compared to $400,000 for the corresponding
period last year. The decrease in the provision for losses on loans
reflects a 32% decrease in nonperforming loans to $7.7 million
(excluding the Bankruptcy Loan, the principal of which is perceived by
management to be adequately collateralized) at September 30, 1993 from
$11.4 million at September 30, 1992. In addition there was a 3%
reduction in loan balances to $182.6 million at September 30, 1993
from $189.1 million at September 30, 1992.
Other income:
Total other income decreased $1,355,000, or 93%, primarily due to
decreases in gains on sales of securities of $1,197,000 and gains on
sales of loans of $134,000. The lower amount of gains was a result of
lower sales volume.
Other expenses:
Total non-interest expenses decreased $37,000, or 2%, for the three
months ended September 30, 1993 as compared with the corresponding
period last year. The decrease in non-interest expenses was primarily
due to a decrease of $71,000 or 13% in other expenses; a decrease of
$58,000, or 21%, in occupancy and equipment expenses due to a
reduction in depreciation expense as a result of a branch closing in
1992; and a decrease of $55,000, or 6%, in salaries and employee
benefits due to reductions in the number of employees and lower
hospitalization premiums. Such items were partially offset by
increases of $121,000, or 48%, in REO expense (net) as described in
the table below; an increase of $14,000, or 9%, in Federal Deposit
Insurance Corporation ("FDIC") expense due to an increase in the FDIC
assessment rate for the Bank; and an increase in securities losses of
$13,000 or 100%.
17
<PAGE>
<PAGE>
The components of REO expense (net) are as follows:
Three months ended September 30,
--------------------------------
1993 1992
-------- --------
REO expense, net:
Carrying costs $102,000 $ 12,000
Provision for losses 312,000 277,000
Gain on sale, net (42,000) (38,000)
-------- --------
Total REO expense, net $372,000 $251,000
======== ========
Carrying costs increased due to sales of three large REO properties
that were producing rental income in 1992. The increase in the
provision for losses on REO was primarily due to market value write
downs on two REO properties totalling $177,000.
Income taxes and extraordinary item:
The Company recorded income tax expense of $179,000 for the three
months ended September 30, 1993. For the comparable quarter of 1992,
the Company reported income tax expense of $559,000, which was
partially offset by an extraordinary credit of $481,000 due to the
utilization of net operating loss carryforwards.
C. Results of Operations for the nine months ended September 30, 1993 and
1992
----------------------------------------------------------------------
Net income:
The Company's net income for the nine months ended September 30, 1993
was $1,831,000 or $.81 per share, as compared with net income of
$1,790,000, or $.79 per share, for the nine months ended September 30,
1992. The Company's income before extraordinary item and cumulative
effect of a change in accounting principle for the nine months ended
September 30, 1993 was $1,531,000 or $.68 per share, as compared with
$1,234,000, or $.55 per share, for the nine months ended September 30,
1992. The 1993 results reflect an income tax refund of approximately
$747,000 and $136,000 of interest thereon, a decrease of $400,000 in
the provision for losses on loans, a $300,000 cumulative effect of a
change in accounting principle, a decrease of $204,000 in occupancy
expenses, a decrease in other expenses of $192,000, and a decrease of
$104,000 in salaries and employee benefits. These items were partially
offset by a decrease of $1,182,000 in net gains on sale of securities,
a decrease of $556,000 in an extraordinary item due to utilization of
net operating loss carryforwards, and an increase in REO expense,net
of $308,000.
18
<PAGE>
<PAGE>
Net interest income:
Net interest income decreased $43,000, or 1%, for the nine months
ended September 30, 1993 as compared with the corresponding period
last year. The decrease in net interest income was primarily due to
$444,000 of foregone interest from the aforementioned Bankruptcy Loan
and decreases in most yields earned on interest-earning assets, which
were partially offset by decreases in the average balances and rates
paid on interest-bearing liabilities.
Total interest income decreased $2,745,000, or 16%, due primarily to
lower yields earned on most interest-earning asset categories as well
as a change in the mix of interest-earning assets and a reduction in
the volume of interest-earning assets. Lower yields were a result of
the foregone interest on the Bankruptcy Loan as well as the continued
declining interest rate environment. The mix of interest-earning
assets negatively impacted interest income as the Bank invested excess
funds from mortgage loan and investment securities sales, which had
earned a weighted average rate of 8.39% for the nine months ended
September 30, 1992, in mortgage-backed securities earning a weighted
average rate of 5.62%. The average balance of interest-earning assets
decreased to $272.1 million from $274.2 million, primarily as a result
of funding deposit outflows.
Total interest expense decreased $2,702,000, or 28%, due primarily to
lower rates paid on all categories of interest-bearing liabilities, a
decrease in the volume of total interest-bearing liabilities, and a
change in the mix of interest-bearing liabilities. Average rates for
interest-bearing liabilities declined to 3.77% for the nine months
ended September 30, 1993 from 5.09% for the nine months ended
September 30, 1992. The average rates for savings accounts and
certificates of deposit declined to 3.04% and 4.44%, respectively, for
the nine months ended September 30, 1993, from 4.10% and 5.83%,
respectively, for the nine months ended September 30, 1992. The
average balance of total interest-bearing liabilities declined to
$242.2 million from $249.9 million as a result of net deposit
outflows. The change in the mix of interest-bearing liabilities
decreased interest expense as the average balance of savings accounts
increased to 42% of total interest-bearing liabilities at September
30, 1993 from 39% for the corresponding period in the prior year,
while the average balance of certificates of deposit decreased to 52%
at September 30, 1993 from 56% for the corresponding period in the
19
<PAGE>
<PAGE>
prior year. Generally, interest rates paid on savings accounts are
lower than interest rates paid on certificates of deposit.
(Refer to rate/volume analysis and yield/cost analysis on pages 23 and
25, respectively, for further detail.)
Provision for losses on loans:
The provision for losses on loans was $350,000 for the nine months
ended September 30, 1993 compared to $750,000 for the corresponding
period last year. The decrease in the provision for losses on loans
reflects a 32% decrease in nonperforming loans to $7.7 million
(excluding the Bankruptcy Loan, the principal of which is perceived by
management to be adequately collateralized) at September 30, 1993 from
$11.4 million at September 30, 1992. In addition, there was a 3%
reduction in loan balances to $182.6 million from $189.1 million at
September 30, 1992.
Other income:
Total other income decreased $1,128,000, or 64%, due primarily to a
decrease of $1,182,000 in gains on sale of securities and a decrease
of $56,000 in gains on sale of loans. This was partially offset by the
receipt of interest of $136,000 on the aforementioned income tax
refund. The lower amount of gains was a result of lower sales volume.
Other expenses:
Total non-interest expenses decreased $113,000, or 2%, for the nine
months ended September 30, 1993 as compared with the corresponding
period last year. The decrease in non-interest expenses was primarily
due to a decrease in occupancy and equipment expenses of $204,000, or
24%, primarily due to recognizing costs for a branch closing in the
first quarter of 1992; a decrease in other expenses of $192,000, or
10%, due to decreases in most categories; and a decrease in salaries
and employee benefits of $104,000 or 4% due to reductions in the
number of employees and some employee benefits. Such items were
partially offset by an increase of $308,000, or 50%, in REO expense
(net) as described in the table below, and an increase of $80,000, or
18%, in FDIC expense due to an increase in the FDIC assessment rate
for the Bank.
20
<PAGE>
<PAGE>
The components of REO expense (net) are as follows:
Nine months ended September 30,
--------------------------------
1993 1992
-------- --------
REO expense, net:
Carrying costs $508,000 $475,000
Provision for losses 669,000 457,000
Gain on sale, net (254,000) (317,000)
-------- --------
Total REO expense, net $923,000 $615,000
======== ========
The increase in the provision for losses on REO was primarily due to
market value write downs on two REO properties totalling $177,000.
Carrying costs increased due to sales of three large REO properties
that were producing rental income in 1992.
Income taxes, extraordinary item and change in accounting principle:
The Company recorded an income tax benefit of $315,000 comprised of an
income tax refund of $747,000 offset by a current provision of
$432,000, for the nine months ended September 30, 1993. For the
comparable period in 1992, the Company reported income tax expense of
$639,000, which was offset by an extraordinary credit of $556,000 due
to the utilization of net operating loss carryforwards.
On January 1, 1993, The Company adopted Statement of Financial
Accounting Standards No. 109: "Accounting for Income Taxes" ("SFAS
109"), which resulted in a change in accounting principle and a
cumulative benefit of $300,000, or $.13 per share. SFAS 109 requires
an asset and liability approach, the objective of which is to
establish deferred tax assets and liabilities for temporary
differences between the financial reporting basis and the tax basis of
the Company's assets and liabilities at enacted tax rates expected to
be in effect when such amounts are realized or settled.
D. Liquidity and Capital Resources
-------------------------------
Liquidity is the ability to meet current cash needs in order to fund
loans and deposit withdrawals, make debt payments, and cover operating
expenses. The Bank's liquidity ratio at September 30, 1993 and
December 31, 1992, as calculated according to the FDIC's definition,
was 33% and 29%, respectively, while the amount of assets used in the
liquidity ratio calculation was $80.6 million and $73.4 million,
respectively. The increase in the liquidity ratio was due to loan
sales and payoffs. In addition, cash and cash equivalents did not
change appreciably from December 31, 1992 to September 30, 1993.
21
<PAGE>
<PAGE>
Operating activities provided $4.3 million in cash flow while
financing activities used $3.2 million and investment activities used
$1.1 million. The $4.3 million of cash provided by operating
activities was primarily a result of interest income earned on loans,
and an income tax refund received and interest thereon; offset by
interest paid on deposits and cash paid to employees and for other
expenses. The $3.2 million used in financing activities primarily
funded net deposit outflows. The $1.1 million of cash used in
investing activities was primarily used to purchase investment and
mortgage-backed securities held for sale, offset by the proceeds of
sales and maturities of securities and sales of REO.
As of September 30, 1993, the Company's and the Bank's capital ratios
were as follows:
September 30, 1993
-------------------------------
Capital ratios: Required Company Bank
--------------- -------- ------- -------
Leverage .................. 7.00% 11.27% 10.97%
Core risk-based............ 4.00 20.97 20.39
Total risk-based........... 8.00 22.23 21.64
22
<PAGE>
<PAGE>
Washington Bancorp, Inc. & Subsidiary
Rate/Volume Analysis
(unaudited)
The Rate/Volume Analysis reflects the extent to which changes in interest
rates and changes in the volume of interest-earnings assets and interest-bearing
liabilities have affected the Bank's interest income and interest expense during
the periods presented. Changes attributable to both volume and rate have been
allocated proportionately.
<TABLE>
<CAPTION>
Three months ended September Nine months ended September 30,
30, 1993 compared to 1992 1993 compared to 1992
-------------------------- --------------------------------
Increase (Decrease) Increase (Decrease)
Due to Due to
------------------- -------------------
Volume Rate Net Volume Rate Net
-------- -------- -------- -------- -------- --------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest Income:
Loans - mortgage (1)............................ $ (323) $ (547) $ (870) $ (667) $(1,783) $(2,450)
Loans - commercial and consumer (1)............. (36) 9 (27) (110) 20 (90)
Investment securities........................... (17) (172) (189) (269) (554) (823)
Mortgage-backed securities...................... 387 (100) 287 837 (124) 713
Federal funds sold ............................. (5) (4) (9) (56) (42) (98)
Deposits due from banks......................... (2) 1 (1) 11 (8) 3
-------- -------- -------- -------- -------- --------
Total interest income....................... 4 (813) (809) (254) (2,491) (2,745)
-------- -------- -------- -------- -------- --------
Interest Expense:
Regular savings................................. 47 (191) (144) 206 (821) (615)
Market rate certificates........................ (174) (404) (578) (660) (1,355) (2,015)
Checking and money market accounts.............. 7 (29) (22) 11 (95) (84)
Advances from FHLB and ESOP debt ............... 5 - 5 12 - 12
-------- -------- -------- -------- -------- --------
Total interest expense ..................... (115) (624) (739) (431) (2,271) (2,702)
-------- -------- -------- -------- -------- --------
Changes in net interest income.................... $ 119 $ (189) $ (70) $ 177 $ (220) $ (43)
======== ======== ======== ======== ======== ========
<FN>
(1) Includes nonperforming loans and excludes REO(in-substance and by deed).
Also, loan fees are included in interest income.
</FN>
</TABLE>
23
<PAGE>
<PAGE>
Washington Bancorp, Inc. & Subsidiary
Yield/Cost Analysis
(unaudited)
<TABLE>
<CAPTION>
Three months ended Three months ended
September 30, 1993 September 30, 1992
--------------------------------- ---------------------------------
Interest Average Interest Average
Average Income/ Yield/ Average Income/ Yield/
Balance Expense Cost Balance Expense Cost
---------- ---------- --------- ---------- ---------- ---------
(Dollars in thousands)
<S> <C> <C> <C> <C>
Assets:
Interest-earning assets:
Loans (1):
Mortgage.................................. $185,882 $ 3,539 7.62% $200,583 $ 4,409 8.79%
Commercial and consumer................... 4,186 93 8.81% 5,998 120 7.96%
-------- -------- ---- -------- -------- ----
Total loans............................. 190,068 3,632 7.64% 206,581 4,529 8.77%
Investment securities ...................... 53,096 598 4.51% 54,294 788 5.81%
Mortgage-backed securities.................. 23,138 344 5.95% 2,972 57 7.67%
Federal funds sold ......................... 6,563 48 2.90% 7,298 57 3.11%
Deposits due from banks .................... 1,263 11 3.46% 1,324 11 3.31%
-------- -------- -------- --------
Total interest-earning assets........... 274,128 4,633 6.76% 272,469 5,442 7.99%
-------- ---- -------- ----
Noninterest-earnings assets................... 10,998 15,601
-------- --------
Total assets............................ $285,126 $288,070
======== ========
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Regular savings............................. $102,729 $ 757 2.92% $ 97,578 $ 901 3.67%
Market-rate certificates.................... 126,014 1,308 4.12% 138,820 1,885 5.40%
Checking and money market accounts ......... 11,832 83 2.78% 11,089 105 3.77%
Advances from FHLB and ESOP debt............ 400 5 4.96% - - -
-------- -------- -------- --------
Total interest-bearing liabilities.......... 240,975 2,153 3.54% 247,487 2,891 4.65%
-------- ---- -------- ----
Noninterest-bearing liabilities (2)........... 13,181 11,411
Stockholders' equity.......................... 30,970 29,172
-------- --------
Total liabilities and stockholders' equity.. $285,126 $288,070
======== ========
Net interest income/interest rate spread..... $ 2,480 3.22% $ 2,551 3.34%
======== ==== ======== ====
Net interest-earnings assets/net yield on
interest-earnings assets.................... $ 33,153 3.62% $ 24,982 3.75%
======== ==== ======== ====
Ratio of interest-earning assets to
interest-bearing liabilities................ 1.14 x 1.10 x
==== ====
<FN>
(1) Includes non-performing loans and excludes REO(in-substance and by deed).
Also, loan fees are included in interest income.
(2) Includes regular checking and escrow accounts
</FN>
</TABLE>
24
<PAGE>
<PAGE>
Washington Bancorp, Inc. & Subsidiary
Yield/Cost Analysis
(unaudited)
<TABLE>
<CAPTION>
Nine months ended Nine months ended
September 30, 1993 September 30, 1992
--------------------------------- ---------------------------------
Interest Average Interest Average
Average Income/ Yield/ Average Income/ Yield/
Balance Expense Cost Balance Expense Cost
---------- ---------- --------- ---------- ---------- ---------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Assets:
Interest-earning assets:
Loans (1):
Mortgage................................ $188,658 $ 11,042 7.80% $198,476 $ 13,492 9.06%
Commercial and consumer................. 4,525 278 8.24% 6,456 368 7.61%
------- ------- -------- --------
Total loans........................... 193,183 11,320 7.81% 204,932 13,860 9.02%
Investment securities .................... 51,926 1,827 4.69% 57,797 2,650 6.11%
Mortgage-backed securities................ 18,419 776 5.62% 1,290 63 6.52%
Federal funds sold ....................... 6,684 145 2.91% 8,704 243 3.73%
Deposits due from banks................... 1,930 36 2.49% 1,448 33 3.04%
-------- -------- -------- --------
Total interest-earning assets......... 272,142 14,104 6.91% 274,171 16,849 8.19%
-------- --------
Noninterest-earnings assets................. 13,338 15,918
-------- --------
Total assets.......................... $285,480 $290,089
======== ========
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Regular savings........................... $101,709 $ 2,304 3.04% $ 95,015 $ 2,919 4.10%
Market-rate certificates.................. 128,391 4,253 4.44% 143,507 6,268 5.83%
Checking and money market accounts ....... 11,800 255 2.90% 11,424 339 3.96%
Advances from FHLB and ESOP debt.......... 350 13 4.98% 26 1 5.14%
-------- -------- -------- --------
Total interest-bearing liabilities........ 242,250 6,825 3.77% 249,972 9,527 5.09%
-------- --------
Noninterest-bearing liabilities (2)......... 12,757 11,469
Stockholders' equity........................ 30,473 28,648
-------- --------
Total liabilities and stockholders'
equity................................... $285,480 $290,089
======== ========
Net interest income/interest rate spread.... $ 7,279 3.14% $ 7,322 3.10%
======== ======= ======== =======
Net earnings assets/net yield on interest-
earnings assets........................... $ 29,892 3.57% $ 24,199 3.56%
======== ======= ======== =======
Ratio of interest-earning assets to
interest-bearing liabilities.............. 1.12 x 1.10 x
======= =======
<FN>
(1) Includes non-performing loans and excludes REO(in-substance and by deed).
Also, loan fees are included in interest income.
(2) Includes regular checking and escrow accounts
</FN>
</TABLE>
25
<PAGE>
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
For information regarding a complaint filed in September 1991
against the Company and the Bank and a complaint served upon the
Company and the Bank in April 1992, see footnote 6 of the notes to
consolidated financial statements of this Form 10-Q/A1 filing and
see the Company's 1992 annual report on Form 10-K.
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
1. Exhibits
10.1 Agreement and Plan of Merger, dated November 8, 1993,
among Washington Bancorp, Inc., HUBCO, Inc., Hudson
United Bank and Washington Savings Bank (filed with
initial Form 10-Q).
2. Reports on Form 8-K
None
26
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this amendment to its report to be signed on its
behalf by the undersigned thereunto duly authorized.
WASHINGTON BANCORP, INC.
Date: January 31, 1994 By: /s/ Theodore J. Doll
--------------------------------
President and Chief
Operating Officer
Date: January 31, 1994 By: /s/ Thomas S. Bingham
--------------------------------
Thomas S. Bingham
Chief Financial and
Accounting Officer
27
