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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

FORM 10-Q

 

 

x   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2003

 

OR

 

¨   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 0-010699

 

 

HUDSON UNITED BANCORP

(Exact name of registrant as specified in its charter)

 

 

New Jersey

  

22-2405746

(State of other jurisdiction of
incorporation or organization)

  

(I.R.S. Employer Identification Number)

1000 MacArthur Blvd, Mahwah, NJ

  

07430

(Address of principal executive office)

  

(Zip Code)

 

(201)-236-2600

(Registrant’s telephone number, including area code)

 

 

Not Applicable

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  ¨

 

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Exchange Act Rule 120-2)     Yes  x    No  ¨

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the last practicable date: 44,587,140 shares, no par value, outstanding as of May 9, 2003.

 

Table of Contents

 

HUDSON UNITED BANCORP

 

INDEX

 

PART I. FINANCIAL INFORMATION

     

Item 1.

   

Financial Statements (Unaudited):

     
    

Consolidated Balance Sheets
At March 31, 2003 and December 31, 2002

  

2

    

Consolidated Statements of Income
For the Three Months Ended
March 31, 2003 and 2002

  

3

    

Consolidated Statements of Comprehensive Income
For the Three Months Ended
March 31, 2003 and 2002

  

4

    

Consolidated Statements of Changes in Stockholders’ Equity
For the Three Months Ended
March 31, 2003 and for the Year Ended December 31, 2002

  

5

    

Consolidated Statements of Cash Flows
For the Three Months Ended
March 31, 2003 and 2002

  

6

    

Notes to Consolidated Financial Statements

  

7-13

Item 2.

   

Management’s Discussion and Analysis of Financial Condition and Results of Operations

  

13-19

Item 3.

   

Quantitative and Qualitative Disclosure about Market Risk

  

19

Item 4.

   

Controls and Procedures

  

19

PART II. OTHER INFORMATION

    

Item 6.

   

Exhibits and Reports on Form 8-K

  

20

    

Signatures

  

21

    

Certifications

  

22-23

 

1

Table of Contents

HUDSON UNITED BANCORP

 

CONSOLIDATED BALANCE SHEETS (Unaudited)

 

    

March 31,
2003

     

December 31,
2002

  
    

(in thousands, except per share data)

  

ASSETS

                  

Cash and due from banks (primarily non-interest bearing)

   

$

220,245

 

   

$

257,694

 

Interest bearing due from banks

   

 

17,987

 

   

 

17,886

 

    
  

TOTAL CASH AND CASH EQUIVALENTS

   

$

238,232

 

   

$

275,580

 

Investment securities available for sale, at market value ($1,332 and $1,072 pledged at March 31, 2003 and December 31, 2002 respectively)

   

$

2,804,830

 

   

$

2,616,452

 

Trading assets, market value

   

 

133,457

 

   

 

—  

 

Loans and leases:

                  

Commercial and financial

   

$

1,761,415

 

   

$

1,784,444

 

Commercial real estate mortgages

   

 

923,710

 

   

 

908,910

 

Consumer

   

 

1,028,953

 

   

 

1,031,475

 

Credit card

   

 

306,526

 

   

 

340,173

 

    
  

Sub-total

   

$

4,020,604

 

   

$

4,065,002

 

Residential mortgages

   

 

242,286

 

   

 

274,473

 

    
  

TOTAL LOANS AND LEASES

   

$

4,262,890

 

   

$

4,339,475

 

Less: Allowance for loan and lease losses

   

 

(71,888

)

   

 

(71,929

)

    
  

NET LOANS AND LEASES

   

$

4,191,002

 

   

$

4,267,546

 

Premises and equipment, net

   

 

97,801

 

   

 

100,991

 

Other real estate owned

   

 

1,044

 

   

 

1,315

 

Goodwill

   

 

73,733

 

   

 

73,733

 

Core deposit intangibles, net of amortization

   

 

25,368

 

   

 

26,423

 

Investment in separate account bank owned life insurance

   

 

138,954

 

   

 

137,158

 

Other assets

   

 

105,473

 

   

 

152,063

 

    
  

TOTAL ASSETS

   

$

7,809,894

 

   

$

7,651,261

 

    
  

LIABILITIES AND STOCKHOLDERS’ EQUITY

                  

Deposits

                  

Noninterest bearing

   

$

1,276,026

 

   

$

1,304,289

 

NOW, money market and savings

   

 

3,084,491

 

   

 

3,119,233

 

Time deposits

   

 

1,823,586

 

   

 

1,776,179

 

    
  

TOTAL DEPOSITS

   

$

6,184,103

 

   

$

6,199,701

 

Customer repurchase agreements

   

 

134,434

 

   

 

134,920

 

FHLB and other borrowings

   

 

585,220

 

   

 

334,766

 

Other liabilities

   

 

67,734

 

   

 

146,795

 

Subordinated debt

   

 

280,326

 

   

 

282,253

 

Company-obligated mandatory redeemable preferred capital securities of subsidiary trusts holding solely junior subordinated debentures of the Company

   

 

130,000

 

   

 

120,300

 

    
  

TOTAL LIABILITIES

   

$

7,381,817

 

   

$

7,218,735

 

Stockholders’ Equity:

                  

Common stock, no par value; authorized 103,000,000 shares; 52,186,866 shares issued and 44,546,032 shares outstanding in 2003 and 52,186,866 shares issued and 45,023,459 shares outstanding in 2002

   

 

92,788

 

   

 

92,788

 

Additional paid-in capital

   

 

312,945

 

   

 

313,467

 

Retained earnings

   

 

193,153

 

   

 

177,544

 

Treasury stock, at cost, 7,640,834 shares in 2003 and 7,163,407 shares in 2002

   

 

(184,987

)

   

 

(169,871

)

Restricted stock

   

 

(2,265

)

   

 

(2,456

)

Accumulated other comprehensive income

   

 

16,443

 

   

 

21,054

 

    
  

TOTAL STOCKHOLDERS’ EQUITY

   

$

428,077

 

   

$

432,526

 

    
  

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

   

$

7,809,894

 

   

$

7,651,261

 

    
  

 

See Notes to Consolidated Financial Statements

 

2

Table of Contents

HUDSON UNITED BANCORP

 

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

 

    

Three Months Ended
March 31,

    

2003

     

2002

    

(in thousands, except per share data)

INTEREST AND FEE INCOME:

                

Loans and leases

   

$

72,337

 

   

$

80,920

Investment securities

   

 

29,448

 

   

 

24,454

Other

   

 

625

 

   

 

569

    
  

TOTAL INTEREST AND FEE INCOME

   

$

102,410

 

   

$

105,943

    
  

INTEREST EXPENSE:

                

Deposits

   

$

17,472

 

   

$

27,682

Borrowings

   

 

3,222

 

   

 

1,746

Subordinated and other debt

   

 

6,512

 

   

 

4,953

    
  

TOTAL INTEREST EXPENSE

   

$

27,206

 

   

$

34,381

    
  

NET INTEREST INCOME

   

$

75,204

 

   

$

71,562

PROVISION FOR LOAN AND LEASE LOSSES, PORTFOLIO LOANS

   

 

7,000

 

   

 

7,500

    
  

PROVISION FOR LOAN AND LEASE LOSSES, ACCELERATED DISPOSITION

   

 

—  

 

   

 

21,333

    
  

TOTAL PROVISION FOR LOAN AND LEASE LOSSES

   

 

7,000

 

   

 

28,833

    
  

NET INTEREST INCOME AFTER TOTAL PROVISION FOR LOAN AND LEASE LOSSES

   

$

68,204

 

   

$

42,729

    
  

NONINTEREST INCOME:

                

Retail service fees

   

$

9,003

 

   

$

9,538

Credit card fee income

   

 

6,396

 

   

 

5,401

ATM and debit card fees

   

 

1,773

 

   

 

1,696

Separate account bank owned life insurance income

   

 

1,796

 

   

 

1,891

Trust income

   

 

495

 

   

 

784

Dime merger termination payment

   

 

—  

 

   

 

77,000

Securities (losses)gains

   

 

(3,259

)

   

 

275

Trading asset gains

   

 

3,536

 

   

 

—  

Other income

   

 

7,143

 

   

 

5,998

    
  

TOTAL NONINTEREST INCOME

   

$

26,883

 

   

$

102,583

    
  

NONINTEREST EXPENSE:

                

Salaries and benefits

   

$

22,942

 

   

$

22,569

Occupancy expense

   

 

8,217

 

   

 

7,856

Equipment expense

   

 

4,493

 

   

 

5,769

Outside services—data processing

   

 

6,893

 

   

 

6,644

Outside services—other

   

 

5,444

 

   

 

5,811

Telephone expense

   

 

1,445

 

   

 

1,664

Marketing expense

   

 

700

 

   

 

1,650

Amortization of intangibles