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 September 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: 44,953,148 shares, no par value, outstanding as of October 31, 2004.
INDEX
1
CONSOLIDATED BALANCE SHEETS (Unaudited)
| (in thousands, except per share data) |
September 30, 2004 |
December 31, 2003 |
||||||
| ASSETS |
||||||||
| Cash and due from banks |
$ | 192,709 | $ | 272,636 | ||||
| Interest bearing due from banks |
49,609 | 41,358 | ||||||
| TOTAL CASH AND CASH EQUIVALENTS |
242,318 | $ | 313,994 | |||||
| Investment securities available for sale, at market value ($1,222 and $1,813 million pledged at September 30, 2004 and December 31, 2003 respectively) |
$ | 1,908,582 | $ | 2,706,185 | ||||
| Investment securities held to maturity, at cost; $1,379 million market value ($1,312 million, at cost pledged, at September 30, 2004) |
$ | 1,392,418 | $ | — | ||||
| Loans and leases: |
||||||||
| Commercial and financial |
$ | 2,231,299 | $ | 2,137,499 | ||||
| Commercial real estate mortgages ($332 million pledged at September 30, 2004) |
1,089,828 | 993,937 | ||||||
| Consumer |
1,027,347 | 1,033,693 | ||||||
| Credit card |
344,320 | 326,713 | ||||||
| Sub-total |
$ | 4,692,794 | $ | 4,491,842 | ||||
| Residential mortgages |
132,671 | 167,913 | ||||||
| TOTAL LOANS AND LEASES |
$ | 4,825,465 | $ | 4,659,755 | ||||
| Less: Allowance for loan and lease losses |
(66,289 | ) | (67,846 | ) | ||||
| NET LOANS AND LEASES |
$ | 4,759,176 | $ | 4,591,909 | ||||
| Premises and equipment, net |
120,721 | 125,168 | ||||||
| Goodwill |
79,008 | 81,068 | ||||||
| Core deposit and other intangibles, net of amortization |
20,326 | 22,664 | ||||||
| Investment in separate account bank owned life insurance |
148,614 | 144,126 | ||||||
| Other assets |
154,064 | 115,544 | ||||||
| TOTAL ASSETS |
$ | 8,825,227 | $ | 8,100,658 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| Deposits |
||||||||
| Noninterest bearing |
$ | 1,336,062 | $ | 1,328,586 | ||||
| NOW, money market and savings |
3,314,043 | 3,009,821 | ||||||
| Time deposits |
1,640,334 | 1,904,952 | ||||||
| TOTAL DEPOSITS |
$ | 6,290,439 | $ | 6,243,359 | ||||
| Repurchase agreements |
551,346 | 532,485 | ||||||
| Other borrowings |
996,603 | 388,734 | ||||||
| TOTAL BORROWINGS |
$ | 1,547,949 | $ | 921,219 | ||||
| Other liabilities |
242,905 | 238,117 | ||||||
| Subordinated debt |
227,009 | 239,773 | ||||||
| TOTAL LIABILITIES |
$ | 8,308,302 | $ | 7,642,468 | ||||
| Stockholders’ Equity: |
||||||||
| Common stock, no par value; authorized 103,000,000 shares; 52,186,866 shares issued and 44,954,248 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 |
309,981 | 311,310 | ||||||
| Retained earnings |
286,818 | 237,046 | ||||||
| Treasury stock, at cost 7,232,618 shares in 2004 and 7,428,500 shares in 2003 |
(170,865 | ) | (176,505 | ) | ||||
| Other Stock Compensation |
(1,680 | ) | (3,899 | ) | ||||
| Accumulated other comprehensive loss |
(117 | ) | (2,550 | ) | ||||
| TOTAL STOCKHOLDERS’ EQUITY |
$ | 516,925 | $ | 458,190 | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ | 8,825,227 | $ | 8,100,658 | ||||
See Notes to Consolidated Financial Statements
December 31,2003 Balance sheet from audited financial statements
2
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
| Three Months Ended September 30, | ||||||
| (in thousands, except per share data) |
2004 |
2003 | ||||
| INTEREST AND FEE INCOME: |
||||||
| Loans and leases |
$ | 68,450 | $ | 64,859 | ||
| Investment securities |
37,498 | 28,800 | ||||
| Other |
384 | 655 | ||||
| TOTAL INTEREST AND FEE INCOME |
$ | 106,332 | $ | 94,314 | ||
| INTEREST EXPENSE: |
||||||
| Deposits |
$ | 12,836 | $ | 12,726 | ||
| Borrowings |
7,188 | 2,636 | ||||
| Subordinated and other debt |
6,287 | 6,200 | ||||
| TOTAL INTEREST EXPENSE |
$ | 26,311 | $ | 21,562 | ||
| NET INTEREST INCOME |
$ | 80,021 | $ | 72,752 | ||
| PROVISION FOR LOAN AND LEASE LOSSES, PORTFOLIO LOANS |
4,500 | 6,500 | ||||
| NET INTEREST INCOME AFTER TOTAL PROVISION FOR LOAN AND LEASE LOSSES |
$ | 75,521 | $ | 66,252 | ||
| NONINTEREST INCOME: |
||||||
| Retail service fees |
$ | 8,044 | $ | 9,714 | ||
| Credit card fee income |
7,981 | 7,006 | ||||
| Loan Fees |
3,965 | 3,197 | ||||
| ATM and debit card fees |
1,757 | 1,853 | ||||
| Separate account bank owned life insurance income |
1,441 | 1,243 | ||||
| Trust income |
740 | 709 | ||||
| Income from Landfill Investments |
6,321 | 4,312 | ||||
| Other income |
2,052 | 6,225 | ||||
| Impairment on mortgage related servicing assets |
— | — | ||||
| Net securities gains |
12,050 | 1,228 | ||||
| Trading asset losses |
— | — | ||||
| TOTAL NONINTEREST INCOME |
$ | 44,351 | $ | 35,487 | ||
| NONINTEREST EXPENSE: |
||||||
| Salaries and benefits |
$ | 33,498 | $ | 24,822 | ||
| Occupancy expense |
7,459 | 7,149 | ||||
| Equipment expense |
4,111 | 4,512 | ||||
| Outside services - data processing |
10,507 | 7,301 | ||||
| Outside services-other |
6,281 | 6,121 | ||||
| Amortization of intangibles |
1,222 | 1,077 | ||||
| Marketing expense |
1,580 | 584 | ||||
| Deposit and other insurance |
664 | 619 | ||||
| Telephone expense |
1,378 | 1,480 | ||||
| Expense from Landfill Investments |
5,188 | 5,349 | ||||
| Other expense |
3,996 | 4,030 | ||||
| TOTAL NONINTEREST EXPENSE |
$ | 75,884 | $ | 63,044 | ||
| INCOME BEFORE INCOME TAXES |
$ | 43,988 | $ | 38,695 | ||
| PROVISION FOR INCOME TAXES |
11,450 | 8,292 | ||||
| NET INCOME |
$ | 32,538 | $ | 30,403 | ||
| NET INCOME PER COMMON SHARE |
||||||
| Basic |
$ | 0.73 | $ | 0.68 | ||
| Diluted |
$ | 0.72 | $ | 0.68 | ||
| WEIGHTED AVERAGE SHARES OUTSTANDING: |
||||||
| Basic |
44,700 | 44,777 | ||||
| Diluted |
44,952 | 44,994 | ||||
See Notes to Consolidated Financial Statements
3
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
| Nine Months Ended September 30, |
|||||||
| (in thousands, except per share data) |
2004 |
2003 |
|||||
| INTEREST AND FEE INCOME: |
|||||||
| Loans and leases |
$ | 202,109 | $ | 205,729 | |||
| Investment securities |
101,500 | 90,751 | |||||
| Other |
1,097 | 1,609 | |||||
| TOTAL INTEREST AND FEE INCOME |
$ | 304,706 | $ | 298,089 | |||
| INTEREST EXPENSE: |
|||||||
| Deposits |
$ | 35,780 | $ | 45,589 | |||
| Borrowings |
14,327 | 9,705 | |||||
| Subordinated and other debt |
18,590 | 18,641 | |||||
| TOTAL INTEREST EXPENSE |
$ | 68,697 | $ | 73,935 | |||
| NET INTEREST INCOME |
$ | 236,009 | $ | 224,154 | |||
| PROVISION FOR LOAN AND LEASE LOSSES, PORTFOLIO LOANS |
14,850 | 20,500 | |||||
| NET INTEREST INCOME AFTER TOTAL PROVISION FOR LOAN AND LEASE LOSSES |
$ | 221,159 | $ | 203,654 | |||
| NONINTEREST INCOME: |
|||||||
| Retail service fees |
$ | 23,834 | $ | 28,173 | |||
| Credit card fee income |
22,109 | 19,475 | |||||
| Loan Fees |
13,254 | 9,758 | |||||
| ATM and debit card fees |
5,230 | 5,595 | |||||
| Separate account bank owned life insurance income |
4,488 | 4,814 | |||||
| Trust income |
2,349 | 1,897 | |||||
| Income from Landfill Investments |
21,936 | 6,716 | |||||
| Other Income |
9,429 | 13,770 | |||||
| Impairment on mortgage related servicing assets |
— | (2,004 | ) | ||||
| Net securities gains |
16,377 | 333 | |||||
| Trading asset gains |
— | 3,449 | |||||
| TOTAL NONINTEREST INCOME |
$ | 119,006 | $ | 91,976 | |||
| NONINTEREST EXPENSE: |
|||||||
| Salaries and benefits |
$ | 84,533 | $ | 72,025 | |||
| Occupancy expense |
23,095 | 22,739 | |||||
| Equipment expense |
12,937 | 13,884 | |||||
| Outside services – data processing |
26,074 | 22,100 | |||||
| Outside services-other |
21,659 | 17,670 | |||||
| Amortization of intangibles |
3,689 | 3,188 | |||||
| Marketing expense |
5,073 | 2,165 | |||||