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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
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FORM l0-K
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/X / ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
- --- ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1996
OR
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/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ______________ to ___________________
Commission file number 0-l0699
HUBCO, INC.
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(Exact name of registrant as specified in its Charter)
New Jersey 22-2405746
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1000 MacArthur Blvd.
Mahwah, New Jersey 07430
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (201) 236-2600
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common Stock, no par value Series A Preferred Stock
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(Title of Class) (Title of Class)
Indicate by check mark whether the registrant (l) has filed all reports
required to be filed by Section l3 or l5(d) of the Securities Exchange Act of
l934 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
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Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]
The aggregate market value of the voting common stock held by
non-affiliates of the Registrant, as of March 26, 1997 was $477,151,051.
The number of shares of Registrant's Common Stock, no par value,
outstanding as of March 26, 1997 was 21,522,484.
DOCUMENTS INCORPORATED BY REFERENCE
Part(s) Into
Documents Which Incorporated
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Annual Report to Shareholders Part I
for the fiscal year ended Part II
December 31, 1996 ("HUBCO's 1996
Annual Report"), pages 6 through 34
The Registrant's Proxy Statement in
connection with the Annual Meeting
of Shareholders to be held April 18,
1997 ("HUBCO's Proxy Statement for
its 1997 Annual Meeting")under the
captions "Election of Directors",
"Executive Compensation", "Stock
Ownership of Management and
Principal Shareholders",
"Compensation Committee Interlocks
and Insider Participation" and
"Certain Transactions with
Management". Notwithstanding the
foregoing, the information contained
in HUBCO's Proxy Statement for its
1997 Annual Meeting pursuant to
Items 402(k) and 402 (1) of
Regulation S-K is not incorporated
by reference and is not to be deemed
part of this report Part III
With the exception of information specifically incorporated by reference,
HUBCO's 1997 Annual Report and HUBCO's Proxy Statement for its 1997 Annual
Meeting are not to be deemed part of this report.
2
HUBCO, INC.
Form l0-K Annual Report
For The Fiscal Year Ended December 31, 1996
PART I
ITEM 1. BUSINESS
(a) General Development of Business.
HUBCO, Inc. ("HUBCO" or "Registrant" or the "Company") is a bank holding
company registered under the Bank Holding Company Act of 1956, as amended (the
"Bank Holding Company Act"). HUBCO was organized under the laws of New Jersey in
1982 by Hudson United Bank ("Hudson United") for the purpose of creating a bank
holding company for Hudson United. HUBCO directly owns Hudson United, Lafayette
American Bank and Trust Company ("Lafayette" and together with Hudson United,
the "Banks") and a brokerage subsidiary, HUB Financial Services, Inc., formerly
known as HUB Investment Services, Inc. HUBCO is also the indirect owner, through
Hudson United and Lafayette, of two investment subsidiaries and five real estate
holding companies. In addition, HUBCO, through Hudson United, holds a 50%
interest in a data processing and imaged check processing company. Each of
HUBCO's direct and indirect subsidiaries is described in Item 1.
Recent Growth of HUBCO and Subsidiaries
On January 31, 1997, the Company privately placed $50.0 million in capital
securities pursuant to Rule 144A under the Securities Act of 1933. The 8.98%
capital securities represent a preferred beneficial interest in the assets of
HUBCO Capital Trust I, a statutory business trust. The Trust exists for the sole
purpose of issuing the Trust Securities and investing the proceeds in 8.98%
Junior Subordinated Deferable Interest Debentures to be issued by HUBCO which
mature on February 1, 2027. The capital securities have preference over common
securities under certain circumstances with respect to cash distributions and
amounts payable on liquidation. The $50.0 million will be included in Tier I
capital for regulatory purposes, subject to certain limitations, but will be
classified as long-term debt for financial reporting purposes.
The Company's acquisition philosophy is to seek in-market or contiguous
market opportunities which can be accomplished with little or no dilution to
earnings. From October 1990 through December 1996, the
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Company has acquired seventeen institutions, adding to its assets and
liabilities a total in excess of $2.7 billion and expanding its branch network
from 15 branches to 85 branches. Over $700 million of these assets and
liabilities were acquired through government assisted transactions which allowed
the Company to reprice deposits, review loans and purchase only those loans
which met its underwriting criteria. The balance of the acquisitions were
accomplished in traditional negotiated transactions.
Summary of Acquisitions
The following chart summarizes the acquisitions undertaken by the Company
since October 1990. The amounts shown as "Purchase Price" represent either cash
paid or the market value of securites issued by HUBCO to the shareholders or
owners of the acquired entity:
DEPOSITS LOANS
GOVERNMENT PURCHASE ASSUMED PURCHASED BRANCHES
INSTITUTION ASSISTED PRICE (IN MILLIONS) (IN MILLIONS) ACQUIRED
- ----------- ---------- ------------ ------------ ------------- ----------
Mountain Ridge State Bank Yes $ 325,000 $ 47.0 $ 12.0 1
Meadowlands National Bank No $ 415,000 $ 35.5 $ 22.1 3
Center Savings and Loan Association Yes $ 10,000 $ 89.9 $ 78.6 1
Irving Savings and Loan Association Yes $ 5,000 $161.1 $ 62.4 5
Broadway Bank and Trust Company Yes $ 3,406,000 $345.7 $ 9.5 8
Pilgrim State Bank No $ 6,000,000 $122.9 $ 46.7 6
Polifly Savings Bank Yes $ 6,180,000 $104.4 $ .5 4
Washington Savings Bank No $ 40,500,000 $237.8 $168.5 8
Shoppers Charge Accounts No $ 16,300,000 - $ 55.6 -
Jefferson National Bank No $ 9,700,000 $ 85.0 $ 41.0 4
Urban National Bank No $ 38,200,000 $204.0 $ 90.0 9
Growth Financial Corp No $ 25,600,000 $110.0 $102.0 3
CrossLand Federal Savings Bank No $ 3,000,000 $ 60.6 - 3
Lafayette American Bank & Trust No $120,000,000 $647.0 $548.0 19
Hometown Bancorporation, Inc. No $ 31,600,000 $162.0 $ 98.9 2
UST Bank, CT No $ 13,700,000 $ 95.3 $ 70.1 4
Westport Bancorp, Inc. No $ 67,800,000 $259.0 $183.0 7
The Company's profitability and its financial condition may be
significantly impacted by its acquisition strategy and by the consummation of
its recent acquisitions.
The Company intends to continue to seek acquisition opportunities. There
can be no assurance that the Company will be successful in acquiring additional
financial institutions or, if additional financial institutions are acquired,
that these acquisitions will enhance the profitability of the Company.
On November 8, 1993, the Company's Board of Directors approved a stock
repurchase plan and authorized management to repurchase up to 10%
4
of its outstanding common stock per year. At that time, the Company had
approximately 10.6 million shares outstanding (adjusted for the 1995 3-for-2
stock split and all stock dividends). There is no assurance that the Company
will purchase the full amount authorized in any year. The acquired shares are to
be held in treasury and to be used for stock option and other employee benefit
plans, preferred stock conversion, stock dividends or in connection with the
issuance of common stock in pending or future acquisitions primarily accounted
for under the purchase method of accounting. During 1996, the Company purchased
971,000 shares at an aggregate cost of $19.8 million. Of these treasury shares,
578,000 were reissued in connection with the 3% stock dividend payable November
15, 1996, and 383,000 were reissued in connection with acquisitions during 1996.
Other Subsidiaries
In 1983, HUBCO formed a directly owned subsidiary called HUB Financial
Services, Inc. which was, in 1995, a wholly owned data processing subsidiary. On
November 6, 1995, HUBCO sold 50% of the stock in HUB Financial Services, Inc. to
United National Bank. HUBCO simultaneously made a capital contribution of the
remaining 50% to Hudson United Bank. The joint venture is operating pursuant to
the provisions of the Bank Service Corporation Act. Simultaneously with the sale
of 50% to United National Bank, the name of HUB Financial Services, Inc. was
changed to United Financial Services, Inc.("UFS"). UFS provides data processing
and imaged check processing services to both of its owner banks and to
Lafayette.
As of December 31, 1996 $409,680,433 of Hudson United's investment
portfolio is owned and managed by a subsidiary company, Hendrick Hudson Corp. of
New Jersey. This subsidiary was established in 1987 to operate as an investment
company under state law.
In February, 1995 HUBCO established a directly owned subsidiary called HUB
Investment Services, Inc. This wholly owned subsidiary provides full brokerage
services and products including mutual funds and annuities through an agreement
with BFP Financial Partners, Inc. which is a subsidiary of Legg Mason, Inc.
During 1996, HUBCO filed to change the name of the company to HUB Financial
Services, Inc. HUB Financial Services, Inc. has obtained a series of insurance
licenses and sells insurance products.
5
Hudson United Bank owns several real estate holding companies. Lafayette
Development Corp. was incorporated by Hudson United Bank and is presently
inactive. JNB Holdings, Inc. was created by Jefferson National Bank and holds
title to OREO properties upon which Jefferson National Bank had foreclosed. UNB
Holdings, Inc. was created by Urban National Bank and holds title to OREO
properties upon which Urban National Bank had foreclosed. Sole ownership of JNB
Holdings and UNB Holdings passed to Hudson United Bank upon merger of the
respective predecessor banks into Hudson United Bank.
Lafayette owns two real estate holding companies. AMBA Realty Corporation
and AMBA II Realty Corporation were incorporated by Lafayette for the purpose of
holding, developing and disposing of properties obtained through foreclosure
proceedings. Lafayette also owns LAI Company, which was incorporated for the
purpose of investing in the common stock of other Connecticut-based financial
institutions and is currently inactive.
Unionization of Hudson United Bank
Hudson United Bank is administratively divided into four administrative
regions: the Bergen, Hudson, Passaic and Essex regions. Eleven branches,
primarily in the Hudson region, of Hudson United Bank are unionized. Local 153
of the Office and Professional Employees International Union represents the
bank's clerical staff in the bargaining unit. Effective March 1, 1996 a
three-year collective bargaining agreement was negotiated which provided for a
modest increase in wages, increased employee contributions towards the cost of
providing health care benefits and consolidation of all bargaining unit jobs
into one job description. These eleven branches operate as an open shop and
approximately 64% of the employees in these branches are members of the union.
The collective- bargaining agreement expires February 28, 1999.
Regulatory Matters
There are a variety of statutory and regulatory restrictions governing the
relations among HUBCO and its subsidiaries:
Capital Adequacy Guidelines and Deposit Insurance
6
The Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA"), requires each federal banking agency to revise its risk-based
capital standards to ensure that those standards take adequate account of
interest rate risk, concentration of credit risk and the risks of
non-traditional activities. In addition, pursuant to FDICIA, each federal
banking agency has promulgated regulations, specifying the levels at which a
financial institution would be considered "well capitalized", "adequately
capitalized", "undercapitalized", "significantly undercapitalized", or
"critically undercapitalized", and to take certain mandatory and discretionary
supervisory actions based on the capital level of the institution.
The regulations implementing these provisions of FDICIA provide that an
institution will be classified as "well capitalized" if it (I) has a total
risk-based capital ratio of at least 10.0 percent, (ii) has a Tier 1 risk-based
capital ratio of at least 6.0 percent, (iii) has a Tier 1 leverage ratio of at
least 5.0 percent, and (iv) meets certain other requirements. An institution
will be classified as "adequately capitalized" if it (I) has a total risk-based
capital ratio of at least 8.0 percent, (ii) has a Tier 1 risk-based capital
ratio of at least 4.0 percent, (iii) has a Tier 1 leverage ratio of (a) at least
4.0 percent, or (b) at least 3.0 percent if the institution was rated 1 in its
most recent examination, and (iv) does not meet the definition of "well
capitalized". An institution will be classified as "undercapitalized" if it (I)
has a total risk-based capital ratio of less than 8.0 percent, (ii) has a Tier 1
risk-based capital ratio of less than 4.0 percent, or (iii) has a Tier 1
leverage ratio of (a) less than 4.0 percent, or (b) less than 3.0 percent if the
institution was rated 1 in its most recent examination. An institution will be
classified as "significantly undercapitalized" if it (I) has a total risk-based
capital ratio of less than 6.0 percent, (ii) has a Tier 1 risk-based capital
ratio of less than 3.0 percent, or (iii) has a Tier 1 leverage ratio of less
than 3.0 percent. An institution will be classified as "critically
undercapitalized" if it has a tangible equity to total assets ratio that is
equal to or less than 2.0 percent. An insured depository institution may be
deemed to be in a lower capitalization category if it receives an unsatisfactory
examination.
As of December 31, 1996, Hudson United Bank had a risk weighted capital
ratio of 11.76% and a leverage capital ratio of 6.79% and Lafayette had a risk
weighted capital ratio of 11.31% and a leverage capital ratio of 8.54%. These
ratios exceed the requirements to be considered a well capitalized institution
under the FDIC regulations. See also "Management's
7
Discussion and Analysis of Financial Condition and Results of Operation -
Capital".
Bank holding companies must comply with the Federal Reserve Board's
risk-based capital guidelines. Under the guidelines, risk weighted assets are
calculated by assigning assets and certain off-balance sheet items to broad risk
categories. The total dollar value of each category is then weighted by the
level of risk associated with that category. A minimum risk-based capital to
risk based assets ratio of 8.00% must be attained. At least one half of an
institution's total risk based capital must consist of Tier 1 capital, and the
balance may consist of Tier 2, or supplemental capital. Tier 1 capital consists
primarily of common stockholder's equity along with preferred or convertible
preferred stock, minus goodwill. Tier 2 capital consists of an institution's
allowance for loan and lease losses, subject to limitation, hybrid capital
instruments and certain subordinated debt. The allowance for loan and lease
losses which is considered Tier 2 capital is limited to l.25% of an
institution's risk-based assets. As of December 31, 1996, HUBCO's total
risk-based capital ratio was 14.08%, consisting of a Tier 1 ratio of 8.55% and a
Tier 2 ratio of 5.53%. Both ratios exceed the requirements under these
regulations.
In addition, the Federal Reserve Board has promulgated a leverage capital
standard, with which bank holding companies must comply. Bank holding companies
must maintain a minimum Tier l capital to total assets ratio of 3%. However,
institutions which are not among the most highly rated by federal regulators
must maintain a ratio 100-to-200 basis points above the 3% minimum. As of
December 31 1996, HUBCO had a leverage capital ratio of 5.71%.
Hudson United and Lafayette are each members of the Bank Insurance Fund
("BIF") of the FDIC. The FDIC also maintains another insurance fund, the Savings
Association Insurance Fund ("SAIF"), which primarily covers savings and loan
association deposits but also covers deposits that are acquired by a BIF-insured
institution from a savings and loan association ("Oakar deposits"). Hudson
United has approximately $115.2 million of deposits at December 31, 1996 with
respect to which Hudson United pays SAIF insurance premiums.
For the first three quarters of 1995, both SAIF-member and BIF-member
institutions paid deposit insurance premiums based on a schedule from $0.23 to
$0.31 per $100 of deposits. In August, 1995, the FDIC , in anticipation of the
BIF's imminent achievement of a required 1.25% reserve
8
ratio, reduced the deposit insurance premium rates paid by BIF-insured banks
from a range of $0.23 to $0.31 per $100 of deposits to a range of $0.04 to $0.31
per $100 of deposits. The new rate schedule for the BIF was made effective June
1, 1995. On November 14, 1995, the FDIC voted to reduce annual assessments for
the semi-annual period beginning January 1, 1996 to the legal minimum of $2,000
for BIF insured institutions, except for institutions that are not well
capitalized and are assigned to the higher supervisory risk categories.
The Economic Growth and Regulatory Reduction Act of 1996 (the "1996 Act"),
signed into law on September 30, 1996, included the Deposit Insurance Funds Act
of 1996 (the "Funds Act") under which the FDIC was required to impose a special
assessment on SAIF assessable deposits to recapitalize SAIF. As a result of the
Funds Act, HUB paid a special assessment of $825,000 for its SAIF deposits,
which it accrued in the third quarter of 1996. Under the Funds Act, the FDIC
also will charge assessments for SAIF and BIF deposits in a 5 to 1 ratio to pay
Financing Corporation ("FICO") bonds until January 1, 2000, at which time the
assessment will be equal. A FICO rate of approximately 1.29 basis points will be
charged on BIF deposits, and approximately 6.44 basis points will be charged on
SAIF deposits. The 1996 Act instituted a number of other regulatory relief
provisions.
Restrictions on Dividend Payments
The holders of HUBCO Common Stock are entitled to receive dividends, when,
as and if declared by the Board of Directors of HUBCO out of funds legally
available, subject to the preferential dividend rights of any preferred stock
that may be outstanding from time to time.
The only statutory limitation is that such dividends may not be paid when
HUBCO is insolvent. Because funds for the payment of dividends by HUBCO come
primarily from the earnings of HUBCO's bank subsidiaries, as a practical matter,
restrictions on the ability of Hudson United and Lafayette to pay dividends act
as restrictions on the amount of funds available for the payment of dividends by
HUBCO.
As a New Jersey chartered commercial bank, Hudson United is subject to the
restrictions on the payment of dividends contained in the New Jersey Bank
Act("NJBA"). Under the NJBA, Hudson United may pay dividends only out of
retained earnings, and out of surplus to the extent that surplus exceeds 50% of
stated capital. Under the Banking Law of Connecticut (the "BLC"), Lafayette may
pay dividends only from its net profits, and the total of all dividends in any
calendar year may not
9
(unless specifically approved by the Connecticut Commissioner of Banking) exceed
the total of its net profits of that year combined with its retained net profits
of the preceding two years. Under the Financial Institutions Supervisory Act,
the FDIC has the authority to prohibit a state-chartered bank from engaging in
conduct which, in the FDIC's opinion, constitutes an unsafe or unsound banking
practice. Under certain circumstances, the FDIC could claim that the payment of
dividends or other distributions by Hudson United or Lafayette to HUBCO
constitutes an unsafe or unsound practice.
HUBCO is also subject to Federal Reserve Bank ("FRB") policies which may,
in certain circumstances, limit its ability to pay dividends. The FRB policies
require, among other things, that a bank holding company maintain a minimum
capital base. The FRB would most likely seek to prohibit any dividend payment
which would reduce a holding company's capital below these minimum amounts. At
December 31, 1996, Hudson United had $109.9 million available and Lafayette had
$13.7 million available for the payment of dividends to HUBCO. At December 31,
1996, HUBCO had $83.5 million available for shareholder dividends, the payment
of which would not reduce any of its capital ratios below the minimum regulatory
requirements.
Restrictions on Transactions Between HUBCO and its Banking Subsidiaries
The Banking Affiliates Act of 1982, as amended, severely restricts loans
and extensions of credit by the Banks to HUBCO and HUBCO affiliates (except
affiliates which are banks). In general, such loans must be secured by
collateral having a market value ranging from 100% to 130% of the loan,
depending upon the type of collateral. Furthermore, the aggregate of all loans
from each of the Banks to HUBCO and its affiliates may not exceed 20% of that
Bank's capital stock and surplus and, singly to HUBCO or any affiliate, may not
exceed 10% of each Bank's capital stock and surplus. Similarly, the Banking
Affiliates Act of 1982 also restricts the Banks in the purchase of securities
issued by, the acceptance from affiliates of loan collateral consisting of
securities issued by, the purchase of assets from, and the issuance of a
guarantee or standby letter- of-credit on behalf of, HUBCO or any of its
affiliates.
Holding Company Supervision
Under the Bank Holding Company Act, HUBCO may not acquire directly or
indirectly more than 5 percent of the voting shares of, or
10
substantially all of the assets of, any bank without the prior approval of
the Federal Reserve Board.
In general, the Federal Reserve Board, under its regulations and the Bank
Holding Company Act, regulates the activities of bank holding companies and
non-bank subsidiaries of banks. The regulation of the activities of banks,
including bank subsidiaries of bank holding companies, generally has been left
to the authority of the supervisory government agency, which for Hudson United
is the FDIC and the New Jersey Department of Banking (the "NJDOB"), and for
Lafayette is the FDIC and the Connecticut Department of Banking (the "CTDOB").
Interstate Banking Authority
The Riegle-Neale Interstate Banking and Branching Efficiency Act of 1994
(the "Interstate Banking and Branching Act") significantly changed interstate
banking rules. Pursuant to the Interstate Banking and Branching Act, a bank
holding company is able to acquire banks in states other than its home state
beginning September 29, 1995, regardless of applicable state law.
The Interstate Banking and Branching Act also authorizes banks to merge
across state lines, thereby creating interstate branches, beginning June, 1997.
Under such legislation, each state has the opportunity either to "opt out" of
this provision, thereby prohibiting interstate branching in such states, or to
"opt in" at an earlier time, thereby allowing interstate branching within that
state prior to June 1, 1997. Furthermore, a state may "opt in" with respect to
de novo branching, thereby permitting a bank to open new branches in a state in
which the bank does not already have a branch. Without de novo branching, an
out-of-state bank can enter the state only by acquiring an existing bank.
On April 17, 1996, New Jersey enacted legislation to opt-in with respect to
earlier interstate banking and branching and the entry into New Jersey of
foreign country banks. New Jersey did not authorize de novo branching into the
state.
In 1995, Connecticut enacted legislation to opt-in with respect to earlier
interstate banking and branching and the entry into Connecticut of foreign
country banks. Connecticut authorizes de novo branching into the state only if
the laws of the home state of the out-of-state bank are reciprocal in that
respect.
Cross Guarantee Provisions and Source of Strength Doctrine
11
Under the Financial Institutions Reform, Recovery and Enforcement Act of
1989 ("FIRREA"), a depository institution insured by the FDIC can be held liable
for any loss incurred by, or reasonably expected to be incurred by, the FDIC in
connection with (I) the default of a commonly controlled FDIC-insured depository
institution in danger of default. "Default" is defined generally as the
appointment of a conservatory or receiver and "in danger of default" is defined
generally as the existence of certain conditions, including a failure to meet
minimum capital requirements, indicative that a "default" is likely to occur in
the absence of regulatory assistance. These provisions have commonly been
referred to as FIRREA's "cross guarantee" provisions. Further, under FIRREA the
failure to meet capital guidelines could subject a banking institution to a
variety of enforcement remedies available to federal regulatory authorities,
including the termination of deposit insurance by the FDIC.
According to Federal Reserve Board policy, bank holding companies are
expected to act as a source of financial strength to each subsidiary bank and to
commit resources to support each such subsidiary. This support may be required
at times when a bank holding company may not be able to provide such support.
Furthermore, in the event of a loss suffered or anticipated by the FDIC - either
as a result of default of a bank subsidiary of the Company or related to FDIC
assistance provided to the subsidiary in danger of default - the other bank
subsidiaries of the Company may be assessed for the FDIC's loss, subject to
certain exceptions.
(b) Industry Segments.
The Registrant has one industry segment -- commercial banking.
(c) Narrative Description of Business.
HUBCO exists primarily to hold the stock of its subsidiaries. During most
of 1996, HUBCO had three directly-owned subsidiaries -- Hudson United, Lafayette
and HUB Financial Services. In addition, HUBCO, through Hudson United,
indirectly owns four additional subsidiaries and through Lafayette, indirectly
owns three additional subsidiaries. The historical growth of, and regulations
affecting, each of HUBCO's direct and indirect subsidiaries is described in Item
1(a) above, which is incorporated herein by reference.
HUBCO is a legal entity separate from its subsidiaries. The stock of the
Banks is HUBCO's principal asset. Dividends from Hudson United and Lafayette are
the primary source of income for HUBCO. As
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explained above in Item 1(a), legal and regulatory limitations are imposed on
the amount of dividends that may be paid by the Banks to HUBCO.
Hudson United currently maintains its executive offices in Mahwah, New
Jersey. At December 31, 1996, Hudson United operated 58 offices primarily in
eight northern New Jersey counties. These offices are located in the northern
New Jersey counties of Bergen, Essex, Hudson, Morris, Passaic, Middlesex,
Somerset and Union. Lafayette maintains its executive offices in Bridgeport,
Connecticut. At December 31, 1996, Lafayette operated 27 offices in the
southwestern Connecticut counties of New Haven and Fairfield. In April 1994,
HUBCO purchased a 64,350 square foot building in Mahwah, New Jersey to house the
executive offices of HUBCO and the Company's data processing subsidiary (now a
joint venture), which services the Banks' data processing and check processing
needs and offers its services to smaller banks in the Connecticut, New York and
New Jersey area.
At December 31, 1996, HUBCO through its subsidiaries had deposits of $2.59
billion, net loans of $1.85 billion and total assets of $3.12 billion. HUBCO
ranked 3rd among commercial banks and bank holding companies headquartered in
New Jersey in terms of asset size.
Each Bank is a full service commercial bank and offers the services
generally performed by commercial banks of similar size and character, including
imaged checking, savings, and time deposit accounts, 24-hour telephone banking,
trust services, safe deposit boxes, secured and unsecured personal and
commercial loans, residential and commercial real estate loans, and
international services including import and export needs, foreign currency
purchases and letters of credit. The Banks' deposit accounts are competitive in
the current environment and include money market accounts and a variety of
interest-bearing transaction accounts. In the lending area, each Bank primarily
engages in consumer lending, commercial lending and real estate lending
activities.
Hudson United and Lafayette offer a variety of trust services. At December
31, 1996, Hudson's Trust Department had approximately $222.0 million of assets
under management or in its custodial control and Lafayette's Trust Department
had approximately $560.5 million of assets under management or in its custodial
control.
There are numerous commercial banks headquartered in New Jersey and
Connecticut, which compete in the market areas serviced by HUBCO. In addition,
large out-of-state banks compete for the business of New Jersey
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and Connecticut residents and businesses located in HUBCO's primary market. A
number of other depository institutions compete for the business of individuals
and commercial enterprises in New Jersey and Connecticut including savings
banks, savings and loan associations, brokerage houses, financial subsidiaries
of other industries and credit unions. Other financial institutions, such as
mutual fund companies, consumer finance companies, factoring companies, and
insurance companies, also compete with HUBCO for loans or deposits. Competition
for depositors' funds, for creditworthy loan customers and for trust business is
intense.
Despite intense competition with institutions commanding greater financial
resources, the Banks' have been able to attract deposits and extend loans. While
each Bank may not exceed fifteen percent of its capital in a loan to a single
borrower, the Bank's have a "house limit" significantly below that level. Each
bank has, on occasion, arranged for participation by other banks in larger loan
accommodations.
Hudson United and Lafayette each has focused on becoming an integral part
of the community it serves. Officers and employees are incented to meet the
needs of their customers and the needs of the local communities served.
HUBCO and its subsidiaries had 827 full-time employees and 191 part-time
employees as of December 31, 1996, compared to 967 full-time and 233 part-time
employees at the end of 1995, as restated to reflect the institutions acquired
and accounted for under the pooling of interests method.
(d) Financial Information about foreign and
domestic operations and export sales.
Not Applicable
(e) Executive Officers of the Registrant
The following table sets forth certain information as to each executive
officer of HUBCO who is not a director.
14
Name, Age and
Position with Officer of Principal Occupation
HUBCO HUBCO Since During Past Five Years
- -------------- ----------- -------------------------------
D. Lynn Van Borkulo- 1988 Executive Vice President, HUBCO
Nuzzo, 48 and Hudson United,
Corporate Secretary, HUBCO.
James Liccardo, 52 1996 First Senior Vice President
Retail Lending.
Karen Foley, 49 1996 First Senior Vice President and
Director of Human Resources of
Hudson United.
Christina L. Maier, 43 1987 Assistant Treasurer of HUBCO and
Senior Vice President and
Controller of Hudson United.
John F. McIlwain, 59 President and Chief Executive
Officer Lafayette American Bank
and Trust
(f) Statistical Disclosure Required Pursuant to
Securities Exchange Act, Industry Guide 3.
The statistical disclosures for a bank holding company required pursuant to
Industry Guide 3 are contained on the following pages of this Report on Form
10-K (Item I disclosures are contained on page 5 of HUBCO's 1996 Annual Report):
PAGES(S) OF
ITEM OF GUIDE 3 THIS REPORT
--------------- -----------
II. Investment Portfolio ........................................ 16
III. Loan Portfolio .............................................. 17-19
IV. Summary of Loan Loss Experience ............................. 20-22
V. Deposits .................................................... 23
VI. Return on Equity and Assets ................................. 24
VII. Short-Term Borrowings ....................................... 25-26
15
HUBCO, Inc. and Subsidiaries
S.E.C. GUIDE 3 - ITEM II
INVESTMENT PORTFOLIO
Book Value at End of Each Reported Period
December 31
------------------------------------------
1996 1995 1994
-------- -------- --------
(In Thousands of Dollars)
U.S. Treasury and Other U.S.
Government Agencies and
Corporations $862,913 $761,376 $872,826
State and Political Subdivisions 11,579 10,115 35,185
Other Securities 4,385 16,627 21,313
Common Stock 57,529 8,320 --
-------- -------- --------
TOTAL $936,406 $796,438 $929,324
======== ======== ========
Maturities and Weighted Average Yield at End of Latest Reporting Period
MATURING
After One But After Five But
Within One Year Within Five Years Within Ten Years After Ten Years
------------------- ----------------- ----------------- -----------------
Amount Yield Amount Yield Amount Yield Amount Yield
-------- ----- -------- ----- ------- ----- -------- ------
U.S. Treasury
and other
U.S. Government
Agencies and
Corporations $ 88,582 6.63% $565,513 6.38% $76,857 7.17% $131,959 6.72%
States and Political
Subdivisions 10,964 5.32 -- -- -- -- 615 9.06
Other Securities 2,820 8.96 800 7.13 767 4.68 -- --
Common Stock 57,529 4.12 -- -- -- -- -- --
-------- -------- ------- --------
TOTAL $159,895 5.68% $566,313 6.38% $77,624 7.14% $132,574 6.73%
======== ======== ======= ========
Weighted average yields on tax-exempt obligations have been computed on a
fully tax-equivalent basis assuming a tax rate of 35 percent.
16
HUBCO, Inc. and Subsidiaries
S.E.C. GUIDE 3 - ITEM III
LOAN PORTFOLIO
Types of Loans At End of Each Reported Period
---------------------------------------------------------------------------
December 31
1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ----------
Commercial, Financial,
and Agricultural $ 482,064 $ 416,726 $ 401,788 $ 413,974 $ 423,530
Real Estate -
Construction 25,080 30,186 20,323 19,928 27,751
Real Estate -
Mortgage 1,206,300 1,055,071 995,921 753,042 800,052
Installment 170,911 150,039 151,027 116,453 122,298
---------- ---------- ---------- ---------- ----------
TOTAL $1,884,355 $1,652,022 $1,569,059 $1,303,397 $1,373,631
========== ========== ========== ========== ==========
17
HUBCO, Inc. and Subsidiaries
S.E.C. GUIDE 3 - ITEM III
LOAN PORTFOLIO
The following table shows the maturity of loans (excluding residential mortgages
of 1-4 family residences, installment loans and lease financing) outstanding as
of December 31, 1996. Also provided are the amounts due after one year
classified according to the sensitivity to changes in interest rates.
Maturities and Sensitivity to Changes in Interest Rates
MATURING
--------------------------------------------------------------
After One After
Within But Within Five
One Year Five Years Years Total
-------- -------- ------- --------
Commercial, Financial,
and Agricultural $403,075 $ 60,711 $18,278 $482,064
Real Estate Construction 23,861 1,036 183 25,080
Real Estate - Mortgage 304,576 114,265 60,725 479,566
-------- -------- ------- --------
TOTAL $731,512 $176,012 $79,186 $986,710
======== ======== ======= ========
INTEREST SENSITIVITY
----------------------------
Fixed Variable
Rate Rate
-------- -------
Due After One But Within Five Years $ 99,201 $76,811
Due After Five Years 79,082 104
-------- -------
TOTAL $110,459 $25,194
======== =======
18
HUBCO, Inc. and Subsidiaries
S.E.C. GUIDE 3 - ITEM III
LOAN PORTFOLIO
Nonaccrual, Past Due and Restructured Loans
------------------------------------------------------------------------------
December 31
1996 1995 1994 1993 1992
------- ------- ------- ------- -------
(In Thousands of Dollars)
Loans accounted for on
a nonaccrual basis $29,029 $23,700 $35,043 $56,809 $25,965
Loans contractually past
due 90 days or more as
to interest or principal
payments 8,531 6,221 3,670 5,124 5,134
Loans whose terms have been
renegotiated to provide a
reduction or deferral of
interest or principal
because of a deterioration
in the financial position
of the borrower 2,779 1,879 6,528 16,759 8,597
At the end of the reporting period, there were no loans not disclosed under
the preceding two sections where known information about possible credit
problems of borrowers causes management of the Company to have serious doubts as
to the ability of such borrowers to comply with the present loan repayment terms
and which may result in disclosure of such loans in the two preceding sections
in the future.
At December 31, 1996 and 1995, there were no concentrations of loans
exceeding 10% of total loans which are not otherwise disclosed as a category of
loans pursuant to Item III.A. of Guide 3.
Recognition of interest on the accrual method is discontinued based on
contractual delinquency and when timely payment is not expected. A nonaccrual
loan is not returned to an accrual status until interest is received on a
current basis and other factors indicate collection is no longer doubtful.
19
HUBCO, Inc. and Subsidiaries
S.E.C. GUIDE 3 - ITEM IV
SUMMARY OF LOAN LOSS EXPERIENCE
The following is a summary of the activity in the allowance for possible loan
losses, broken down by loan category:
Year Ended December 31
---------------------------------------------------------------------
1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ----------
Amount of Loans Outstanding at End of Year $1,884,355 $1,652,022 $1,569,059 $1,303,397 $1,373,631
========== ========== ========== ========== ==========
Daily Average Amount of Loans $1,723,335 $1,590,663 $1,405,759 $1,349,440 $1,384,978
========== ========== ========== ========== ==========
Balance of Allowance for Possible
Loan Losses at Beginning of Year $ 30,105 $ 30,958 $ 33,463 $ 32,809 $ 28,638
Loans Charged Off:
Commercial, Financial and Agricultural (6,477) (5,503) (7,099) (7,418) (17,180)
Real Estate - Construction -- (75) (474) (482) (62)
Real Estate - Mortgage (4,580) (6,055) (12,247) (16,566) (5,949)
Installment (3,164) (1,535) (776) (2,233) (2,094)
Lease Financing -- -- (13) (122) (355)
---------- ---------- ---------- ---------- ----------
Total Loans Charged Off (14,221) (13,168) (20,609) (26,821) (25,640)
---------- ---------- ---------- ---------- ----------
Recoveries of Loans Previously Charged Off:
Commercial, Financial and Agricultural 469 926 1,766 818 1,092
Real Estate-Construction -- 40 17 -- --
Real Estate-Mortgage 776 1,182 442 604 305
Installment 1,071 553 377 436 436
Lease Financing -- 10 41 82 158
---------- ---------- ---------- ---------- ----------
Total Recoveries 2,316 2,711 2,643 1,940 1,991
---------- ---------- ---------- ---------- ----------
Net Loans Charged Off (11,905) (10,457) (17,966) (24,881) (23,649)
---------- ---------- ---------- ---------- ----------
Provision Charged to Expense 12,295 9,515 9,309 31,917 26,320
Additions Acquired Through Acquisitions 4,658 -- 4,717 400 1,500
Other -- 89 1,435 (6,782) --
---------- ---------- ---------- ---------- ----------
Balance at End of Year $ 35,153 $ 30,105 $ 30,958 $ 33,463 $ 32,809
========== ========== ========== ========== ==========
Ratios
Net Loans Charged Off to
Average Loans Outstanding .69% .66% 1.28% 1.84% 1.71%
Allowance for Possible Loan
Losses to Average Loans
Outstanding 2.04% 1.89% 2.20% 2.48% 2.37%
20
Management formally reviews the loan portfolio and evaluates credit risk on at
least a quarterly basis throughout the year. Such review takes into
consideration the financial condition of the borrowers, fair market value of
collateral, level of delinquencies, historical loss experience by loan category,
industry trends, and the impact of local and national economic conditions.
21
HUBCO, Inc. and Subsidiaries
S.E.C. GUIDE 3 - ITEM IV
SUMMARY OF LOAN LOSS EXPERIENCE
ALLOWANCE FOR POSSIBLE LOAN LOSSES ALLOCATION
December 31, 1996 December 31, 1995 December 31, 1994
----------------------- ------------------------ ------------------------
% of Loans % of Loans % of Loans
In Each In Each In Each
Category To Category To Category To
Amount Total Loans Amount Total Loans Amount Total Loans
------ ----------- ------ ----------- ------ -----------
Balance at end of
period applicable
to domestic loans:
Commercial
Financial and
Agricultural $11,454 25.6% $14,604 25.2% $17,072 25.6%
Real Estate --
Construction 188 1.3 252 1.8 375 1.3
Real Estate --
Mortgage 10,535 64.0 6,563 63.9 5,912 63.5
Installment 2,885 9.1 2,197 9.1 2,603 9.6
Unallocated 10,091 6,489 4,996
------- ------ ------- ------ ------- ------
TOTAL $35,153 100.00% $30,105 100.00% $30,958 100.00%
December 31, 1993 December 31,1992
------------------------- ------------------------
% of Loans % of Loans
In Each In Each
Category To Category to
Amount Total Loans Amount Total Loans
------ ----------- ------ -----------
Balance at end of
period applicable
to domestic loans:
Commercial
Financial and
Agricultural $22,522 31.8% $18,466 30.8%
Real Estate --
Construction 909 1.5 1,149 2.0
Real Estate --
Mortgage 5,272 57.8 6,728 58.3
Installment 1,942 8.9 2,467 8.9
Unallocated 2,818 3,999
------- ------ ------- ------
TOTAL $33,463 100.00% $32,809 100.00%
The allowance for possible loan losses has been allocated according to the
amount deemed to be reasonably necessary to provide for the possibility of
losses being incurred within the above categories of loans at the date
indicated.
-22a-
HUBCO, Inc. and Subsidiaries
S.E.C. GUIDE 3 - ITEM V
DEPOSITS
The following table sets forth average deposits and average rates for each of
the years indicated.
Year Ended December 31,
-------------------------------------------------------------------------
1996 1995 1994
------------------ ------------------ ------------------
Amount Rate Amount Rate Amount Rate
(In Thousands of Dollars)
Domestic Bank Offices:
Non-interest-bearing
demand deposits $ 524,017 $ 487,031 $ 455,000
Interest-bearing
demand deposits 455,882 2.10% 413,185 2.50% 414,467 2.21%
Savings deposits 634,579 2.10 689,277 2.45 776,485 2.40
Time deposits 805,948 4.94 768,253 4.49 610,261 3.28
---------- ---------- ----------
TOTAL $2,420,426 $2,357,746 $2,256,213
========== ========== ==========
Maturities of certificates of deposit and other time deposits of $100,000 or
more issued by domestic offices, outstanding at December 31, 1996 are summarized
as follows:
Time Certificates Other Time
of Deposit Deposits Total
------------------ ----------- ---------
(In Thousands of Dollars)
3 months or less $ 91,316 $ -- $ 91,316
Over 3 through 6 months 9,312 -- 9,312
Over 6 through 12 month 8,007 -- 8,007
Over 12 months 4,308 -- 4,308
-------- ---- --------
TOTAL $112,943 $ $112,943
======== ==== ========
23
HUBCO, Inc. and Subsidiaries
S.E.C. GUIDE 3 - ITEM VI
RETURN ON EQUITY AND ASSETS
Year Ended December 31,
---------------------------------
1996 1995 1994
---- ---- ----
Return on Average Assets 0.76% 1.27% 0.91%
Return on Average Equity 10.44 17.31 15.77
Common Dividend Payout Ratio 73.12 40.28 34.31
Average Equity to Average
Assets Ratio 7.25 7.35 5.79
24
HUBCO, Inc. and Subsidiaries
S.E.C. GUIDE 3 - ITEM VII
SHORT-TERM BORROWINGS
The following table shows the distribution of the Company's short-term
borrowings and the weighted average interest rates thereon at the end of each of
the last three years. Also provided are the maximum amount of borrowings and the
average amounts of borrowings as well as weighted average interest rates for the
last three years. The term for each type of borrowing disclosed is one day.
Federal Funds
Purchased and
Securities Sold
Under Agreement Other Short-
to Repurchase Term Borrowings
------------- ---------------
(In Thousand of Dollars)
Year ended December 31:
1996 $ 74,411 $113,568
1995 45,858 17,124
1994 87,317 33,777
Weighted average interest
rate at year end:
1996 4.80% 6.05%
1995 5.29 5.79
1994 4.89 5.81
Maximum amount outstanding
at any month's end:
1996 $100,049 $126,653
1995 175,604 35,096
1994 125,554 42,680
Average amount outstanding
during the year:
1996 $ 87,336 $ 48,205
1995 100,327 18,229
1994 59,636 33,400
25
Federal Funds
Purchased and
Securities Sold
Under Agreement Other Short-
to Repurchase Term Borrowings
------------- ---------------
Weighted average interest
rate during the year:
1996 4.76% 4.30%
1995 5.47 5.97
1994 3.51 4.42
ITEM 2. PROPERTIES
The corporate headquarters of HUBCO is located in a three story facility in
Mahwah, New Jersey. The building is approximately 64,350 square feet and houses
the executive offices of the Company and its subsidiaries. The main office of
Hudson United is located in the former corporate headquarters, a four story
facility in Union City, New Jersey, which is owned by Hudson United. Hudson
United occupies 57 additional branch offices, of which 31 are owned and 27 are
leased. Lafayette's main office is located in a leased facility in Bridgeport,
Connecticut. Lafayette occupies 26 additional branch offices, of which 4 are
owned and 22 are leased.
Of the 50 properties leased, 31 have renewal options for terms of five to
fifteen years. The remaining 19 locations have expiration dates ranging from
1997-2005.
ITEM 3. LEGAL PROCEEDINGS
In the normal course of business, lawsuits and claims may be brought
by and may arise against HUBCO and its subsidiaries. In the opinion of
management, no legal proceedings which have arisen in the normal course of the
Company's business and which are presently pending or threatened against HUBCO
or its subsidiaries, when resolved, will
26
have a material adverse effect on the business or financial condition of
HUBCO or any of its subsidiaries.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of Shareholders of HUBCO during the
fourth quarter of 1996.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
As of December 31, 1996, HUBCO had approximately 3,475 shareholders.
HUBCO's common stock is listed on the Nasdaq National Market. The following
represents the high and low sale prices from each quarter during the last two
years. The numbers have been restated to reflect a 3 for 2 stock split effective
January 14, 1995 and all stock dividends.
1996
------------------------
High Low
------ ------
1st Quarter $21.97 $18.87
2nd Quarter 21.12 17.84
3rd Quarter 21.00 19.17
4th Quarter 24.87 20.15
1995
------------------------
High Low
------ -------
1st Quarter $16.87 $14.24
2nd Quarter 17.48 15.02
3rd Quarter 20.51 16.75
4th Quarter 21.48 18.69
27
The following table shows the per share quarterly cash dividends paid upon
the common stock over the last two years, restated to give retroactive effect to
stock dividends.
1996 1995
---- ----
March 1 $0.165 March 1 $0.145
June 1 0.165 June 1 0.145
September 1 0.165 September 1 0.145
December 1 0.190 December 1 0.145
Dividends are generally declared within 30 days prior to the payable date,
to stockholders of record l0-20 days after the declaration date.
ITEM 6. SELECTED FINANCIAL DATA
(In Thousands Except For Per Share Amounts)
Reference should be made to pages 4-5 of this Report on Form 10-K for a
discussion of recent acquisitions which affect the comparability of the
information contained in this table.
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
Net Interest Income $131,354 $133,211 $117,803 $98,757 $96,597
Provision for Loan Losses 12,295 9,515 9,309 31,917 26,320
Net Income 21,497 34,565 23,388 (6,008) 8,484
Per Share Data(1)
Net Income - Fully
Diluted 0.93 1.44 1.02 (0.32) 0.58
Cash Dividends - Common 0.68 0.58 0.35 0.30 0.26
Balance Sheet Totals:
Total Assets-12/31 3,115,687 2,778,416 2,770,667 2,322,713 2,219,105
Long Term Debt-12/31 100,000 25,000 25,000 - -
Average Equity -
for year 205,927 199,721 148,273 120,037 112,085
Average Assets -
for year 2,838,854 2,716,612 2,561,466 2,266,235 2,231,070
28
(1) Per share data is adjusted retroactively to reflect a 10% stock dividend
paid November 15, 1991 to stockholders of record on November 6, 1991, a 10%
stock dividend paid June 1, 1993 to stockholders of record on May 11, 1993,
a 3 for 2 stock split payable January 14, 1995 to record holders of HUBCO
Common Stock on January 3, 1995 and a 3% stock dividend paid November 15,
1996 to stockholders of record on November 4, 1996.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
HUBCO's 1996 Annual Report contains on pages 6 through 17 the information
required by Item 7 and that information is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
HUBCO's 1996 Annual Report contains on pages 18 through 34 the information
required by Item 8 and that information is incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
HUBCO's Proxy Statement for its 1997 Annual Meeting under the caption
"Election of Directors", contains the information required by Item 10 with
respect to directors of HUBCO and certain information with respect to executive
officers and that information is incorporated herein by reference. Certain
additional information regarding executive officers of HUBCO, who are not also
directors, appears under subsection (e) of Item 1 of this Form 10-K.
29
ITEM 11. EXECUTIVE COMPENSATION
HUBCO's Proxy Statement for its 1997 Annual Meeting contains, under the
caption "Executive Compensation", and under the caption "Compensation Committee
Interlocks and Insider Participation", the information required by Item 11 and
that information is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
HUBCO's Proxy Statement for its 1997 Annual Meeting contains, under the
caption "Stock Ownership of Management and Principal Shareholders", the
information required by Item 12 and that information is incorporated herein by
reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
HUBCO's Proxy Statement for its 1997 Annual Meeting under the captions
"Compensation Committee Interlocks and Insider Participation" and "Certain
Transactions with Management", contains the information required by Item 13 and
that information is to be incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 8-K
(a) (1) & (2) List of Financial Statements and Financial
Statement Schedules
The below listed consolidated financial statements and report
of independent public accountants of HUBCO, Inc. and
subsidiaries, included in HUBCO's 1996 Annual Report are
incorporated by reference in Item 8:
Report of Independent Public Accountants
30
Consolidated Balance Sheets at
December 31, 1996 and 1995
Consolidated Statements of Income for the Years
Ended December 31, 1996, 1995 and 1994
Consolidated Statements of Changes in Stockholders'
Equity for the Years Ended December 31, 1996,
1995 and 1994
Consolidated Statements of Cash Flows for the Years
Ended December 31, 1996, 1995 and 1994
Notes to Consolidated Financial Statements
Schedules to the Consolidated Financial Statements required by Article 9 of
Regulation S-X are not required under the related instructions or are
inapplicable, and therefore have been omitted.
(a) (3) Exhibits
List of Exhibits
(3a) The Restated Certificate of Incorporation of HUBCO,
Inc. filed January 31, 1997.
(3b) The By-Laws of HUBCO, Inc.
(4a) Indenture dated as of January 14, 1994 between HUBCO, Inc.
and Summit Bank as Trustee for $25,000,000 7.75%
Subordinated Debentures due 2004. (Incorporated by reference
from the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1993, Exhibit (4))
(4b) Indenture dated as of September 13, 1996 between HUBCO,
Inc. and Summit Bank as Trustee for $75,000,000 8.20%
Subordinated Debentures due 2006. (Incorporated by
reference from the Company's Current Report on Form 8-K
dated September 16, 1996.)
31
(4c) Indenture dated January 31, 1997 between HUBCO, Inc. And
the Bank of New York as Trustee for $50,000,000 8.98%
Junior Subordinated Debentures due February 1, 2027.
(Incorporated by reference from the Company's Current
Report on Form 8-K dated February 11, 1997.)
(10a) Agreement and Plan of Merger dated as of February 5, 1996,
between HUBCO, Inc. and Lafayette American Bank and Trust
Company.(Incorporated by reference from the Company's
Current Report on Form S-4 dated March 19, 1996.)
(10b) Stock Option Agreement dated as of February 5, 1996, between
HUBCO, Inc. and Lafayette American Bank and Trust Company.
(Incorporated by reference from the Company's Current Report
on Form 8-K dated February 6, 1996.)
(10c) Agreement and Plan of Merger dated as of April 28, 1996,
between HUBCO, Inc., Hudson United Bank, Lafayette American
Bank and Trust, Hometown Bancorporation, Inc. and The Bank
of Darien. (Incorporated by reference from the Company's
Current Report on Form 8-K dated May 2, 1996.)
(10d) Stock Option Agreement dated as of April 28, 1996, between
HUBCO, Inc. and Hometown Bancorporation, Inc. (Incorporated
by reference from the Company's Current Report on Form 8-K
dated February 6, 1996.)
(10e) Agreement and Plan of Merger dated as of June 21, 1996,
between HUBCO, Inc. Hudson United Bank, Lafayette American
Bank and Trust, Westport Bancorp, Inc. and The Westport
Bank & Trust Company (Incorporated by reference from the
Company's Current Report on Form 8-K dated July 2, 1996.)
(10f) Stock Option Agreement dated as of June 21, 1996, between
HUBCO, Inc. and Westport Bancorp, Inc. (Incorporated by
reference from the Company's Current Report on Form 8-K
dated July 2, 1996.)
(10g) Change in Control, Severance and Employment Agreement with
Kenneth T. Neilson dated January 1, 1997.
(10h) Change in Control, Severance and Employment Agreement with
D. Lynn Van Borkulo-Nuzzo dated January 1, 1997.
(10i) Change in Control, Severance and Employment Agreement with
John F. McIlwain dated January 1, 1997.
32
(10j) Change in Control, Severance and Employment Agreement with
Karen Foley dated January 1, 1997.
(10k) HUBCO Supplemental Employees' Retirement Plan dated January
1, 1996.
(10l) Collective Bargaining Agreement with Local 153 of the
Office and Professional Employees International Union,
dated March 1, 1996. (Incorporated by reference from the
Company's Annual Report of Form 10-K for the fiscal year
ended December 31, 1995, Exhibit.)
(10m) HUBCO, Inc. Directors Deferred Compensation Plan.
(Incorporated by reference from the Company's Annual
Report on Form 10-K for the fiscal year ended December 31,
1994, Exhibit)
(10n) Agreement and Plan of Merger dated as of August 18, 1995
among HUBCO, Inc., Hudson United Bank, Growth Financial
Corp and Growth Bank. (Incorporated by reference from the
Company's Current Report on Form 8-K filed August 24,
1995.)
(10o) Agreement and Plan of Merger dated August 15, 1996, between
HUBCO, Inc., Lafayette American Bank and Trust, UST Corp. and
UST Bank/Connecticut (Incorporated by reference from the
Company's Current Report on Form 8-K filed August 22, 1996.)
(13) Those portions of HUBCO's 1996 Annual Report which are
incorporated by reference into this 10-K.
(22) List of Subsidiaries.
(27) Financial Data Schedule.
(b) Reports on Form 8-K
On October 22, 1996, HUBCO filed a Form 8-K Item 5 as amended on
October 28, 1996(date of earliest event - October 22, 1996), containing
HUBCO's press release announcing third quarter earnings results.
On November 4, 1996, HUBCO filed a Form 8-K Item 7(date of earliest
event - November 4, 1996), containing reproductions of the text,
without exhibits, of documents initially filed with the Commission by
Westport Bancorp, Inc.
On December 6, 1996, HUBCO filed a Form 8-K Item 5 (date of earliest
event - November 22, 1996), containing HUBCO's press release announcing
that on November 22, 1996, Hudson United sold the deposits and certain
loans from its Kinnelon Branch to the Ramapo Bank, and on November 29,
1996 Lafayette consummated its previously announced acquisition of UST
Bank/Connecticut from UST Corp.
33
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) 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.
HUBCO, INC.
By: /s/ KENNETH T. NEILSON
-----------------------
Kenneth T. Neilson
Chairman of the Board
President and CEO
Dated: March 28, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ KENNETH T. NEILSON Chairman of the Board March 28, 1997
- ------------------------------ President, CEO, Director
Kenneth T. Neilson Principal Executive Officer
/s/ ROBERT J. BURKE Director March 28, 1997
- ------------------------------
Robert J. Burke
/s/ BRYANT D. MALCOLM Director March 28, 1997
- ------------------------------
Bryant D. Malcolm
/s/ CHARLES F.X. POGGI Director March 28, 1997
- ------------------------------
Charles F. X. Poggi
/s/ SR. GRACE FRANCES STRAUBER Director March 28, 1997
- ------------------------------
Sister Grace Frances Strauber
34
Signature Title Date
--------- ----- ----
/s/ W. PETER MCBRIDE Director March 28, 1997
- ------------------------------
W. Peter McBride
/s/ CHRISTINA L. MAIER Assistant Treasurer March 28, 1997
- ------------------------------ Principal Accounting
Christina L. Maier Officer and Principal
Financial Officer
35
Exhibit 21
LIST OF SUBSIDIARIES
SUBSIDIARIES OF HUBCO, INC.:
Hudson United Bank, organized under the banking laws of the State of New Jersey.
Lafayette American Bank and Trust, organized under the banking laws of the State
of Connecticut.
HUB Financial Services, Inc., organized under the New Jersey Business
Corporation Act.
SUBSIDIARIES OF HUDSON UNITED BANK:
Hendrik Hudson Corp. of New Jersey, organized under the New Jersey Business
Corporation Act.
Lafayette Development Corp., organized under the New Jersey Business
Corporation Act.
JNB Holdings, Inc., organized under the New Jersey Business Corporation Act.
UNB Holdings, Inc., organized under the New Jersey Business Corporation Act.
SUBSIDIARIES OF LAFAYETTE AMERICAN BANK AND TRUST:
AMBA Realty Corporation, organized under the Connecticut Business Laws.
AMBA II Realty Corporation, organized under the Connecticut Business Laws.
LAI Company, organized under the Connecticut Business Laws.
36
EXHIBIT INDEX
Exhibit Description
------- -----------
(3a) The Restated Certificate of Incorporation of HUBCO,
Inc. filed January 31, 1997.
(3b) The By-Laws of HUBCO, Inc.
(4a) Indenture dated as of January 14, 1994 between HUBCO, Inc.
and Summit Bank as Trustee for $25,000,000 7.75%
Subordinated Debentures due 2004. (Incorporated by reference
from the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1993, Exhibit (4))
(4b) Indenture dated as of September 13, 1996 between HUBCO,
Inc. and Summit Bank as Trustee for $75,000,000 8.20%
Subordinated Debentures due 2006. (Incorporated by
reference from the Company's Current Report on Form 8-K
dated September 16, 1996.)
(4c) Indenture dated January 31, 1997 between HUBCO, Inc. And
the Bank of New York as Trustee for $50,000,000 8.98%
Junior Subordinated Debentures due February 1, 2027.
(Incorporated by reference from the Company's Current
Report on Form 8-K dated February 11, 1997.)
(10a) Agreement and Plan of Merger dated as of February 5, 1996,
between HUBCO, Inc. and Lafayette American Bank and Trust
Company.(Incorporated by reference from the Company's
Current Report on Form S-4 dated March 19, 1996.)
(10b) Stock Option Agreement dated as of February 5, 1996, between
HUBCO, Inc. and Lafayette American Bank and Trust Company.
(Incorporated by reference from the Company's Current Report
on Form 8-K dated February 6, 1996.)
(10c) Agreement and Plan of Merger dated as of April 28, 1996,
between HUBCO, Inc., Hudson United Bank, Lafayette American
Bank and Trust, Hometown Bancorporation, Inc. and The Bank
of Darien. (Incorporated by reference from the Company's
Current Report on Form 8-K dated May 2, 1996.)
(10d) Stock Option Agreement dated as of April 28, 1996, between
HUBCO, Inc. and Hometown Bancorporation, Inc. (Incorporated
by reference from the Company's Current Report on Form 8-K
dated February 6, 1996.)
(10e) Agreement and Plan of Merger dated as of June 21, 1996,
between HUBCO, Inc. Hudson United Bank, Lafayette American
Bank and Trust, Westport Bancorp, Inc. And The Westport
Bank & Trust Company (Incorporated by reference from the
Company's Current Report on Form 8-K dated July 2, 1996.)
(10f) Stock Option Agreement dated as of June 21, 1996, between
HUBCO, Inc. and Westport Bancorp, Inc. (Incorporated by
reference from the Company's Current Report on Form 8-K
dated July 2, 1996.)
(10g) Change in Control, Severance and Employment Agreement with
Kenneth T. Neilson dated January 1, 1997.
(10h) Change in Control, Severance and Employment Agreement with
D. Lynn Van Borkulo-Nuzzo dated January 1, 1997.
(10i) Change in Control, Severance and Employment Agreement with
John F. McIlwain dated January 1, 1997.
(10j) Change in Control, Severance and Employment Agreement with
Karen Foley dated January 1, 1997.
(10k) HUBCO Supplemental Employees' Retirement Plan dated January
1, 1996.
(10l) Collective Bargaining Agreement with Local 153 of the
Office and Professional Employees International Union,
dated March 1, 1996. (Incorporated by reference from the
Company's Annual Report of Form 10-K for the fiscal year
ended December 31, 1995, Exhibit.)
(10m) HUBCO, Inc. Directors Deferred Compensation Plan.
(Incorporated by reference from the Company's Annual
Report on Form 10-K for the fiscal year ended December 31,
1994, Exhibit)
(10n) Agreement and Plan of Merger dated as of August 18, 1995
among HUBCO, Inc., Hudson United Bank, Growth Financial
Corp and Growth Bank. (Incorporated by reference from the
Company's Current Report on Form 8-K filed August 24,
1995.)
(10o) Agreement and Plan of Merger dated August 15, 1996, between
HUBCO, Inc., Lafayette American Bank and Trust, UST Corp. and
UST Bank/Connecticut (Incorporated by reference from the
Company's Current Report on Form 8-K filed August 22, 1996.)
(13) Those portions of HUBCO's 1996 Annual Report which are
incorporated by reference into this 10-K.
(22) List of Subsidiaries.
(27) Financial Data Schedule.