Hudson United Bancorp Reports 15% Increase in Operating Earnings Per Share for the Second Quarter
MAHWAH, N.J.--(BUSINESS WIRE)--July 18, 2000--Hudson United
Bancorp (NYSE:HU) today reported second quarter operating earnings of
$0.62 per diluted share, or $31.8 million, an increase of 15% over
$0.54 per diluted share, or $29.0 million for the same period in 1999.
Return on average assets was 1.38% and return on average equity was
25.33% for the 2000 second quarter. The record second quarter
operating earnings resulted from the realization of cost savings from
recent acquisitions and from the growth in high yielding commercial
loans from the second quarter of 1999.
Operating earnings are the Company's reported earnings adjusted to
exclude certain non-recurring items. For the second quarter 2000, the
Company's operating earnings are net of a non-recurring loss of $44.4
million after-tax, which resulted from the recently announced balance
sheet restructuring. This loss is reflected in the Company's
Consolidated Statement of Income as loss on assets held for sale for
the quarter ended June 30, 2000. Including this loss, for the three
months ended June 30, 2000, the Company reported a net loss of $0.25
per diluted share, or $12.6 million.
Also included in the second quarter results is the recognition of
the $15 million guaranteed payment under the terms of a termination
agreement between Hudson and Dime Bancorp. The present value of this
payment, or $13.6 million, was recorded net of expenses related to the
terminated merger in the Company's Consolidated Statement of Income as
merger related and restructuring costs. The net impact of these items
was negative by less than a penny per share.
"I am pleased to report another quarter of earnings growth for
Hudson United despite the pressure from the current interest rate
environment," said Kenneth T. Neilson, Hudson United Bancorp's
Chairman, President and CEO. "With our recently announced deleveraging
strategy completed and our stock buyback program in place, we are
positioned for strong financial performance."
Net income for the first half of 2000, including the loss on
assets held for sale, was $17.3 million, or $.34 per diluted share.
For the six months ended June 30, 2000, operating earnings were $61.7
million and diluted operating earnings per share were $1.20. Net
income for the comparative six-month period in 1999 was $57.7 million
and diluted earnings per share was $1.07. The 12% increase in
operating earnings per share resulted primarily from revenue growth in
our core businesses and the realization of cost saves related to our
two most recent acquisitions. Excluding the loss on assets held for
sale, return on average assets was 1.33% and return on average equity
was 24.39% for the six-month period ended June 30, 2000.
Net interest income for the second quarter of 2000 was $84.7
million compared to $87.0 million for the second quarter of 1999.
Total interest income was 6% higher in this year's second quarter
compared to last year's second quarter due to a 15% increase in
interest on loans. Average loan volume was 11% higher in the second
quarter of 2000 compared to the same 1999 period. When comparing the
second quarter to the same period in 1999, interest expense on
deposits declined 16% while the interest expense on short-term
borrowings almost doubled. The net interest margin was 4.00% and 4.12%
for the second quarter of 2000 and 1999, respectively. The recently
announced balance sheet restructuring will have a positive impact on
net interest income and the net interest margin beginning in the third
quarter and will reduce the Company's sensitivity to rising interest
rates. For the six months ended June 30, 2000, net interest income was
$172.4 million and the net interest margin was 4.02%. For the same
period in 1999, net interest income was $167.7 million and the net
interest margin was 4.11%. The higher net interest income in the 2000
period compared to 1999 was largely due to a 13% increase in average
loans.
For the second quarter and first half of 2000, the Company
reported a loss in total noninterest income of $40.7 million and $17.0
million, respectively. Total noninterest income, excluding the loss on
assets held for sale, was $22.9 million for the second quarter of 2000
compared to $21.9 million for the second quarter of 1999. Service
charges on deposits and credit card fee income were each up 10% from
the 1999 period. The Company recorded a $2.8 million gain from the
sale of Dime Bancorp stock during the second quarter of 2000, which
was recorded as a security gain. Total noninterest income, excluding
the loss on assets held for sale, was $46.6 million for the first half
of 2000 compared to $44.9 million for the first half of 1999.
Noninterest expense for the second quarter of 2000 was $53.7
million compared to $60.6 million in the second quarter of 1999 and
$60.3 million in the first quarter of 2000. The decline in expenses
from the comparative periods was primarily due to cost savings related
to the JeffBanks, Inc. and Southern Jersey Bancorp acquisitions. The
efficiency ratio for the second quarter was 47.3%, compared to 50.1%
in the first quarter of 2000 and 51.7% in the second quarter of 1999.
For the six months ended June 30, 2000 and 1999, noninterest expenses
were $114.0 million and $116.7 million, respectively. The efficiency
ratio for the first six months of 2000 and 1999 was 48.7% and 51.4%,
respectively.
At June 30, 2000, non-performing assets totaled $59.5 million
(0.65% of total assets) compared to $59.1 million at March 31, 2000
and $53.1 million at December 31, 1999. The allowance for possible
loan losses totaled $98.2 million at June 30, 2000 and represented
176% of non-performing loans and 1.78% of total loans. The allowance
for loan losses was $98.1 million at March 31, 2000 and $98.7 million
at December 31, 1999. Loans 90 days past due and still accruing
declined $3.4 million from March 31, 2000 to $26.9 million at June 30,
2000. The provision for possible loan losses was $6.0 million and
$12.0 million for the second quarter and first six months of 2000,
respectively. For the 1999 second quarter and first half, the
provision for loan losses was $4.5 million and $9.0 million,
respectively.
Hudson United Bancorp's total assets at June 30, 2000 were $9.1
billion compared to $9.7 billion at year-end 1999. At June 30, 2000,
total loans were $5.5 billion and total deposits were $5.8 billion
compared with $5.7 billion and $6.5 billion at December 31, 1999,
respectively. Stockholders' equity was $504 million and book value per
common share was $9.99 at June 30, 2000. All regulatory capital ratios
exceed those necessary to be considered a well-capitalized
institution. |
