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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 June 30, 2004

 

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: shares, no par value 44,948,148 outstanding as of July 31, 2004.

 

Table of Contents

HUDSON UNITED BANCORP

 

INDEX

 

           

PART I. FINANCIAL INFORMATION

     

Item 1.

    Financial Statements (Unaudited):     
     Consolidated Balance Sheets At June 30, 2004 and December 31, 2003    2
     Consolidated Statements of Income For the Three Months Ended June 30, 2004 and 2003    3
     Consolidated Statements of Income For the Six Months Ended June 30, 2004 and 2003    4
     Consolidated Statements of Comprehensive Income For the Three Months Ended June 30, 2004 and 2003    5
     Consolidated Statements of Comprehensive Income For the Six Months Ended June 30, 2004 and 2003    5
     Consolidated Statements of Changes in Stockholders’ Equity For the Six Months Ended June 30, 2004 and for the Year Ended December 31, 2003    6
     Consolidated Statements of Cash Flows For the Six Months Ended June 30, 2004 and 2003    7
     Notes to Consolidated Financial Statements    8-14

Item 2.

    Management’s Discussion and Analysis of Financial Condition and Results of Operations    15-19

Item 3.

    Quantitative and Qualitative Disclosure about Market Risk    19-20

Item 4.

    Controls and Procedures    20

PART II. OTHER INFORMATION

    

Item 1.

   

Legal Proceedings

    21

Item2(e).

   

Issuer Repurchases of Its Equity Shares During the Quarter

    21

Item 4.

   

Submission of Matters to a Vote of Security Holders

    22

Item 6.

   

Exhibits and Reports on Form 8-K

    23
    

Signatures

   23

 

1

Table of Contents

HUDSON UNITED BANCORP

CONSOLIDATED BALANCE SHEETS (Unaudited)

 

(in thousands, except per share data)

    June 30,
2004
     December 31,
2003
  

ASSETS

                 

Cash and due from banks

    $ 223,044     $ 272,636  

Interest bearing due from banks

      35,787       41,358  
    
 

TOTAL CASH AND CASH EQUIVALENTS

    $ 258,831     $ 313,994  

Investment securities available for sale, at market value ($1,997 and $1,813 million pledged at June 30, 2004 and December 31, 2003 respectively)

    $ 2,892,400     $ 2,706,185  

Investment securities held to maturity, at cost; $583 thousand market value ($553 million, at cost pledged, at June 30, 2004)

    $ 613,655     $ —    

Loans and leases:

                 

Commercial and financial

    $ 2,208,139     $ 2,137,499  

Commercial real estate mortgages ($190 million pledged at June 30, 2004)

      1,041,677       993,937  

Consumer

      1,049,631       1,033,693  

Credit card

      323,763       326,713  
    
 

Sub-total

    $ 4,623,210     $ 4,491,842  

Residential mortgages

      140,571       167,913  
    
 

TOTAL LOANS AND LEASES

    $ 4,763,781     $ 4,659,755  

Less: Allowance for loan and lease losses

      (66,048 )     (67,846 )
    
 

NET LOANS AND LEASES

    $ 4,697,733     $ 4,591,909  

Premises and equipment, net

      122,965       125,168  

Goodwill

      79,009       81,068  

Core deposit and other intangibles, net of amortization

      20,548       22,664  

Investment in separate account bank owned life insurance

      147,173       144,126  

Other assets

      126,404       115,544  
    
 

TOTAL ASSETS

    $ 8,958,718     $ 8,100,658  
    
 

LIABILITIES AND STOCKHOLDERS’ EQUITY

                 

Deposits

                 

Noninterest bearing

    $ 1,354,671     $ 1,328,586  

NOW, money market and savings

      3,062,544       3,009,821  

Time deposits

      1,711,778       1,904,952  
    
 

TOTAL DEPOSITS

    $ 6,128,993     $ 6,243,359  

Repurchase agreements

      583,325       532,485  

Other borrowings

      1,283,395       388,734  
    
 

TOTAL BORROWINGS

    $ 1,866,720     $ 921,219  

Other liabilities

      256,293       238,117  

Subordinated debt

      228,542       239,773  
    
 

TOTAL LIABILITIES

    $ 8,480,548     $ 7,642,468  

Stockholders’ Equity:

                 

Common stock, no par value; authorized 103,000,000 shares; 52,186,866 shares issued and 44,948,148 shares outstanding in 2004 and 52,186,866 shares issued and 44,758,366 shares outstanding in 2003

      92,788       92,788  

Additional paid-in capital

      309,759       311,310  

Retained earnings

      270,000       237,046  

Treasury stock, at cost 7,238,718 shares in 2004 and 7,428,500 shares in 2003

      (171,098 )     (176,505 )

Other Stock Compensation

      (6,558 )     (3,899 )

Accumulated other comprehensive income (loss)

      (16,721 )     (2,550 )
    
 

TOTAL STOCKHOLDERS’ EQUITY

    $ 478,170     $ 458,190  
    
 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

    $ 8,958,718     $ 8,100,658  
    
 

 

See Notes to Consolidated Financial Statements

December 31,2003 Balance sheet from audited financial statements

 

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HUDSON UNITED BANCORP

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

 

     Three Months Ended
June 30,
  

(in thousands, except per share data)

    2004
    2003
  

INTEREST AND FEE INCOME:

                

Loans and leases

    $ 66,462    $ 68,533  

Investment securities

      33,412      32,503  

Other

      355      329  
    
  

TOTAL INTEREST AND FEE INCOME

    $ 100,229    $ 101,365  
    
  

INTEREST EXPENSE:

                

Deposits

    $ 10,986    $ 15,391  

Borrowings

      4,929      3,847  

Subordinated and other debt

      6,217      5,929  
    
  

TOTAL INTEREST EXPENSE

    $ 22,132    $ 25,167  
    
  

NET INTEREST INCOME

    $ 78,097    $ 76,198  

PROVISION FOR LOAN AND LEASE LOSSES, PORTFOLIO LOANS

      4,750      7,000  
    
  

NET INTEREST INCOME AFTER TOTAL PROVISION FOR LOAN AND LEASE LOSSES

    $ 73,347    $ 69,198  
    
  

NONINTEREST INCOME:

                

Retail service fees

    $ 7,702    $ 9,456  

Credit card fee income

      6,929      6,073  

Loan Fees

      4,755      3,104  

ATM and debit card fees

      1,820      1,969  

Separate account bank owned life insurance income

      1,501      1,775  

Trust income

      811      693  

Income from Landfill Investments

      10,453      2,404  

Other income

      4,264      3,859  

Impairment on mortgage related servicing assets

      —        (2,004 )

Securities gains

      857      2,364  

Trading asset losses

      —        (87 )
    
  

TOTAL NONINTEREST INCOME

    $ 39,092    $ 29,606  
    
  

NONINTEREST EXPENSE:

                

Salaries and benefits

    $ 25,400    $ 24,261  

Occupancy expense

      7,435      7,373  

Equipment expense

      4,346      4,879  

Outside services - data processing

      8,056      7,906  

Outside services-other

      7,174      6,105  

Amortization of intangibles

      1,223      1,056  

Marketing expense

      2,787      881  

Deposit and other insurance

      640      519  

Telephone expense

      1,495      1,551  

Expense from Landfill Investments

      7,497      3,598  

Other expense

      3,737      870  
    
  

TOTAL NONINTEREST EXPENSE

    $ 69,790    $ 58,999  
    
  

INCOME BEFORE INCOME TAXES

    $ 42,649    $ 39,805  

PROVISION FOR INCOME TAXES

      10,990      10,670  
    
  

NET INCOME

    $ 31,659    $ 29,135  
    
  

NET INCOME PER COMMON SHARE

                

Basic

    $ 0.71    $ 0.65  

Diluted

    $ 0.70    $ 0.65  

WEIGHTED AVERAGE SHARES OUTSTANDING:

                

Basic

      44,651      44,614  

Diluted

      44,920      44,829  

 

See Notes to Consolidated Financial Statements

 

3

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HUDSON UNITED BANCORP

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

 

    

Six Months Ended

June 30,

  

(in thousands, except per share data)

    2004
    2003
  

INTEREST AND FEE INCOME:

                

Loans and leases

    $ 133,659    $ 140,870  

Investment securities

      64,002      61,951  

Other

      713      954  
    
  

TOTAL INTEREST AND FEE INCOME

    $ 198,374    $ 203,775  
    
  

INTEREST EXPENSE:

                

Deposits

    $ 22,944    $ 32,863  

Borrowings

      7,139      7,069  

Subordinated and other debt

      12,303      12,441  
    
  

TOTAL INTEREST EXPENSE

    $ 42,386    $ 52,373  
    
  

NET INTEREST INCOME

    $ 155,988    $ 151,402  

PROVISION FOR LOAN AND LEASE LOSSES, PORTFOLIO LOANS

      10,350      14,000  
    
  

NET INTEREST INCOME AFTER TOTAL PROVISION FOR LOAN AND LEASE LOSSES

    $ 145,638    $ 137,402  

NONINTEREST INCOME:

                

Retail service fees

    $ 15,790    $ 18,459  

Credit card fee income

      14,128      12,469  

Loan Fees

      9,289      6,561  

ATM and debit card fees

      3,473      3,742  

Separate account bank owned life insurance income

      3,047      3,571  

Trust income

      1,609      1,188  

Income from Landfill Investments

      15,615      2,404  

Other Income

      7,377      7,545  

Impairment on mortgage related servicing assets

      —        (2,004 )

Securities gains/(losses)

      4,327      (895 )

Trading asset gains

      —        3,449  
    
  

TOTAL NONINTEREST INCOME

    $ 74,655    $ 56,489