Hudson United Bancorp Reports Second Quarter Earnings
MAHWAH, N.J.--(BUSINESS WIRE)--July 18, 2001--Hudson United Bancorp (NYSE:HU) today reported net income of $23.3 million, or $0.49 per diluted share, for the quarter ended June 30, 2001.
Return on average equity was 25.93% and return on average assets was 1.42% for the second quarter of 2001. Net income was $45.3 million, or $0.95 per diluted share, for the six months ended June 30, 2001. Return on average equity was 24.92% and return on average assets was 1.38% for the six months of 2001.
Net income for the first half of 2000, as reported, was $17.3 million, or $0.30 per diluted share. Second quarter net income for 2000, as reported, showed a loss of $12.6 million, or ($0.22) per diluted share. The Company reported operating earnings of $30.0 million, or $0.53 per diluted share, in the second quarter of 2000 and $59.9 million, or $1.05 per diluted share, for the first half of 2000. Operating earnings for the second quarter and six months ending June 2000 have been adjusted for comparison purposes to reflect the $63.6 million pre-tax ($44.4 million after tax) charge resulting from balance sheet restructuring initiatives and the $2.8 million pre-tax
($1.8 million after tax) gain on the sale of Dime Bancorp, Inc. common stock. All per share amounts for 2000 reflect the 10% stock dividend paid in December 2000.
"We are pleased with our strong earnings growth," said Kenneth T. Neilson, Chairman, President & CEO. " We had solid linked quarter increases in net income and in earnings per share, and continued our history of strong returns on average equity and average assets. We also increased our net interest margin and fee income in absolute terms as well as a percentage of revenue. In addition, we decreased our non-performing assets and delinquency ratios for the second consecutive quarter as we resume our strong asset quality track record after our 1999 acquisitions."
Net interest income for the second quarter of 2001 was $72.0 million and the net interest margin improved to 4.81%. Net interest income was $142.4 million and the net interest margin was 4.78% for the six months ended June 2001. Net interest income was $84.7 million with a net interest margin of 4.00% for the comparable second quarter of 2000 and $172.4 million with a net interest margin of 4.02% for the same six-month period in 2000. The changes in net interest income and net interest margin were primarily attributable to the Company's balance sheet restructuring program in 2000 and its stock repurchase program.
Noninterest income was $22.9 million for the second quarter of 2001, an increase of 14% from $20.1 million for the second quarter of 2000. Noninterest income was $44.5 million for the six-month period ended June 30, 2001 compared to $43.8 million for the six-month period ended June 30, 2000. The increase in the second quarter of 2001 was due primarily to increased credit card fees, as a result of growth in the Company's private label credit card business, and increased retail service fees. Noninterest income was 24% of total revenue for the second quarter and first half of 2001.
Noninterest expense was $56.4 million for the second quarter of 2001 compared to $53.7 million for the second quarter of 2000. Noninterest expense for the first six months of 2001 was $111.0 million compared to $114.0 million in the comparable period of 2000. The increase in the second quarter of 2001 was primarily due to non-payroll related expenses. These costs were for business development initiatives and expanded infrastructure to support business line opportunities. These expenses were partially offset by decreases in other expense categories. The decline in noninterest expenses for the first half of 2001 was due primarily to cost savings and efficiencies that resulted from consolidating acquisitions that were made in prior years. The efficiency ratio for the second quarter and first half of 2001 was 55.2% and 54.8%, respectively.
Non-performing loans totaled $45.9 million at June 30, 2001. This was a decrease of $7.1 million compared to $53.0 million of non-performing loans at March 31, 2001 and a decrease of $12.0 million compared to $57.9 million of non-performing loans at December 31, 2000. Non-performing assets were $52.5 million at June 30, 2001, down from $61.1 million at March 31, 2001 and down from $62.2 million at December 31, 2000. The allowance for possible loan and lease losses totaled $81.6 million at June 30, 2001 and represented 178% of non-performing loans compared to 164% of non-performing loans at December 31, 2000. The allowance for possible loan and lease losses as a percentage of total loans and leases was 1.71% at June 30, 2001 and 1.80% at December 31, 2000.
The provision for possible loan and lease losses was $6.0 million for both the second quarters ended June 2001 and June 2000. Net charge-offs in excess of the current provision in 2001 were related to loans acquired with the Company's 1999 acquisitions. The Company had recorded a special provision of $25 million in the fourth quarter of 1999 to cover potential charge-offs from the 1999 acquisitions.
The Company's total assets were $6.7 billion at June 30, 2001, compared to $6.7 billion at March 31, 2001 and $6.8 billion at year-end 2000. Loan and lease categories consisting of commercial and financial; commercial real estate; consumer; and credit card loans totaled $ 3.8 billion at June 30, 2001, compared to $3.8 billion at March 31, 2001 and $3.8 billion at December 31, 2000. These four categories represented 79% of loans and leases at June 30, 2001, an increase from 73% of loans and leases at December 31, 2000. Residential mortgage loans decreased $60 million from March 31, 2001 to $995 million at June 30, 2001. The decrease resulted from prepayments and the Company's practice of selling all new originations in the secondary market. The decrease in residential mortgage loans was offset by increases in Fed Funds, investment securities and related assets. Total deposits were $5.9 billion at June 30, 2001, compared to $5.8 billion at March 31, 2001 and $5.8 billion at December 31, 2000. Total stockholders' equity was $365 million and book value per common share was $7.82 at June 30, 2001. All regulatory capital ratios exceed those necessary to be considered a well-capitalized institution. |
