-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Kva04lYGQ6Z+g655qzqZnY6s6SAShSXjezML8QD9goKEJ8Y1QZ6rTQOHBKIAu5Du GwBNIdIcbpZQw9mYhia7/Q== 0001157523-03-003347.txt : 20030725 0001157523-03-003347.hdr.sgml : 20030725 20030725151633 ACCESSION NUMBER: 0001157523-03-003347 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030724 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030725 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTER BANCORP INC CENTRAL INDEX KEY: 0000712771 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 521273725 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-11486 FILM NUMBER: 03803510 BUSINESS ADDRESS: STREET 1: 2455 MORRIS AVE CITY: UNION STATE: NJ ZIP: 07083 BUSINESS PHONE: 9086889500 MAIL ADDRESS: STREET 1: 2455 MORRIS AVE CITY: UNION STATE: NJ ZIP: 07083 8-K 1 a4441541.txt CENTER BANCORP 8-K Center Bancorp, Inc. Form 8-K UNITED STATES SECURITIES & EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K Current Report Quarterly Report Pursuant to Section 13 or 15 (D) of the Securities Exchange Act of 1934 Date of Report, July 24, 2003 (Date of Earliest Event Responded) Commission File number 2-81353 CENTER BANCORP, INC. (Exact name of registrant as specified in its charter) New Jersey 52-1273725 (State or other Jurisdiction of (I.R.S. Employer Identification No.) Incorporation or Organization) 2455 Morris Avenue, Union New Jersey 07083 (Address of Principal executive's offices) (Zip Code) (908) 688-9500 (Registrant's Telephone Number, including area code) ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (c) Exhibits As described in Item 9 of this Report, the following Exhibit is furnished as part of this Current Report on Form 8-K: 99.1 Press Release of Center Bancorp, Inc. dated July 24, 2003. ITEM 9. REGULATION FD DISCLOSURE. On July 24, 2003, Center Bancorp, Inc. (the "Company") issued a press release regarding results for the three months ended June 30, 2003. A copy of this press release is being furnished as Exhibit 99.1 to this Current Report on Form 8-K. This Current Report on Form 8-K and the press release attached hereto are being furnished by the Company pursuant to Item 12 of Form 8-K, insofar as they disclose historical information regarding the Company's results of operations for the three months ended June 30, 2003. In accordance with General Instruction B.6 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing. Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Center Bancorp, Inc. Date: July 24, 2003 By: /s/ Anthony C. Weagley --------------------------- Name: Anthony C. Weagley Title: Vice President & Treasurer Exhibit Index Exhibit No. Description 99.1 Press Release of the Company dated July 24, 2003 EX-99 3 a4441541ex99.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 Center Bancorp, Inc., Reports Second Quarter Earnings UNION, N.J.--(BUSINESS WIRE)--July 24, 2003--Center Bancorp Inc. (NASDAQ:CNBC) parent company to Union Center National Bank of Union, New Jersey, today reported earnings results for the second quarter ended June 30, 2003. Net income for the second quarter of 2003 amounted to $1,507,000 or $.18 per fully diluted share, a decrease of 27.8% or $580,000 from the $2,087,000 or $.25 per fully diluted share earned for the comparable quarter of the previous year. Basic earnings per share were $.18, a decrease of 28% from $.25 earned in the second quarter of 2002. The Corporation's earnings results for the second quarter of 2003 reflected a decline in revenue impacted by interest rates, which reached historical lows during the second quarter of 2003, impacting net interest margins. The sustained nature of these low interest rate levels has diminished revenue growth due to a continued compression of yield on earning assets. The Corporation was in an asset sensitive position, which negatively impacted returns on earning-assets for both the current quarter and six months ended June 30, 2003. Total interest income, on a tax-equivalent basis, for the second quarter of 2003, decreased $935,000 or 9.02%, over the comparable 2002 period. Total interest expense decreased by $404,000 over the same period. The positive earning asset growth in both the loan and the investment securities portfolios reduced the effects of the decline in yield earned on those assets. During the second quarter of 2003, the loan portfolio increased on average $26.9 million, an increase of 12.1% from the comparable period in 2002. Despite the slowdown experienced in the economy, loan demand continues to remain steady, fueled by the branch network expansion, higher visibility in new markets, and a continued enhancement of product lines to meet market demands and aggressive promotion of a teaser rate Home Equity Loan product. While asset quality continues to remain high, additional provisions of approximately $79,000 were made to the allowance for loan losses in the second quarter, $159,000 year-to date, to maintain adequate loan loss reserves in relationship with loan portfolio growth. The Corporation's investment securities portfolio increased on average $114.5 million (up 25.4% over the comparable prior year quarter). The increased securities portfolio largely reflects recent execution of the Corporation's investment strategies in response to the growth in average funding sources. The resultant yield on the investment portfolio was adversely affected by the heightened levels of repayments on mortgage related securities. Average funding sources grew $141.0 million or 20% for the three month period ended June 30, 2003 as compared with the comparable 2002 period. Interest-bearing deposits increased $29.2 million on average during the second quarter of 2003, as compared to the second quarter in 2002. Total non-interest bearing core deposits increased $8.1 million on average in the second quarter of 2003 in comparison to the comparable quarter in 2002 and continue to be a low-cost source of funding. At June 30, 2003, this source of funding amounted to $122.4 million or 14.9% of total funding sources and 21.1% of total deposits. Borrowings comprised of securities sold under agreements to repurchase and advances from the Federal Home Loan Bank of New York increased $103.8 million on average during the second quarter of 2003, as compared with the second quarter of 2002. Net interest margins continued to come under pressure from the prevailing low interest rate environment during the second quarter of 2003, contracting 95 basis points for the period as compared with the same quarter in 2002. The continued compression of net interest margins is a result of the effects of falling interest rates, increased prepayments on mortgage related earning-assets and its effects on the asset sensitivity maintained in the balance sheet coupled with low replacements yields on shorter duration additions the earning-asset portfolio. The net interest spread decreased 80 basis points in the second quarter of 2003 to 2.78% from 3.58% for the comparable quarter in 2002 and decreased 29 basis points compared to the first quarter of 2003. For the three months ended June 30, 2003 the net interest margin (net interest income as a percentage of earning assets), decreased 95 basis points to 3.05% from 4.00% for the comparable quarter in 2002; and decreased 30 basis points from 3.35% in the first quarter of 2003. Other non-interest income, exclusive of gains on securities sold (which decreased $50,000), increased $55,000 or 8.08% for the second quarter compared with the comparable quarter in 2002. The increased revenue was primarily driven by the increase in service charges, commissions and fees and other fee income, the latter of which is primarily comprised of fees related to the issuance of letters of credit. Operating overhead increased 9.4% for the second quarter over the comparable period last year and was primarily related to increased staffing expense and increased premise expense. Total assets at June 30, 2003, were $883.0 million, an increase of 19.1% from assets of $741.3 million at June 30, 2002. The annualized return on average assets for the second quarter ended June 30, 2003, decreased to .69% as compared with 1.15% for the second quarter of 2002. The total Tier 1 capital ratio was 6.79% at June 30, 2003, as compared to 7.52% for the comparable quarter in 2002. Total Tier I capital amounted to approximately $59.2 million, and includes $10.0 million in Trust Preferred Securities issued on December 18, 2001. Book value per common share was $6.61 as compared with $5.80 a year ago. Tangible book value per common share increased to $6.31 from $5.56 a year ago. Annualized return on average stockholders' equity for the second quarter ended June 30, 2003 was 11.4% compared to 17.7% for the comparable quarter in 2002. Center Bancorp Inc., through its wholly owned subsidiary, Union Center National Bank, Union, New Jersey operates thirteen banking locations. Banking centers that are located in Union Township (6 locations), Berkeley Heights, Madison, Millburn/Vauxhall, Morristown (2 locations), Springfield, and Summit New Jersey. The Bank also operates remote ATM locations in the Union New Jersey Transit train station and in Union Hospital in Union. Union Center National Bank is the largest commercial Bank headquartered in Union County chartered in 1923, and is a full service banking company. For further information regarding Center Bancorp Inc., call 800-862-3683. For information regarding Union Center National Bank visit our web site at http://www.centerbancorp.com. All non-historical statements in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include expressions about management's views regarding future performance. These statements may use such forward-looking terminology as "expect", "look", "believe', "plan", "anticipate", "may", "will" or similar statements or variations of such terms or otherwise express views concerning trends and the future. Such forward-looking statements involve certain risks and uncertainties. These include, but are not limited to, the direction of interest rates, continued levels of loan quality and origination volume, continued relationships with major customers including sources for loans, as well as the effects of international, national, regional and local economic conditions and legal and regulatory barriers and structure, including those relating to the deregulation of the financial services industry. Actual results may differ materially from such forward-looking statements. Center Bancorp, Inc. assumes no obligation for updating any such forward-looking statement at any time. CENTER BANCORP, INC. FINANCIAL HIGHLIGHTS (UNAUDITED) For the 3 Months Ended For the 6 Months Ended ---------------------- ----------------------- 6/30/03 6/30/02 6/30/03 6/30/02 Net Income $1,507,000 $2,087,000 $3,193,000 $4,122,000 Earning per Share Basic $ 0.18 $ 0.25 $ 0.38 $ 0.49 Diluted $ 0.18 $ 0.25 $ 0.37 $ 0.49 Weighted Average Shares Outstanding Basic 8,465,762 8,395,686 8,453,192 8,371,008 Diluted 8,554,098 8,462,380 8,541,942 8,438,920 All common share and per common share amounts have been restated to reflect the 2-for-1 common stock split distributed on June 2, 2003. Center Bancorp, Inc. Consolidated Statements of Condition June 30, December 31, 2003 2002 (Dollars in thousands) (unaudited) - ---------------------------------------------------------------------- Assets: Cash and due from banks $24,082 $19,728 Federal funds sold - 41,000 - ---------------------------------------------------------------------- Total cash and cash equivalents 24,082 60,728 Investment securities held to maturity 194,523 221,143 (approximate market value of $202,712 in 2003 and $225,591 in 2002) Investment securities available-for-sale 361,628 198,754 - ---------------------------------------------------------------------- Total investment securities 556,151 419,897 - ---------------------------------------------------------------------- Loans, net of unearned income 268,260 227,537 Less - Allowance for loan losses 2,655 2,343 - ---------------------------------------------------------------------- Net loans 265,605 225,194 - ---------------------------------------------------------------------- Premises and equipment, net 13,697 12,566 Accrued interest receivable 4,752 4,935 Bank owned separate account life insurance 14,502 13,753 Other assets 2,133 2,090 Goodwill 2,091 2,091 - ---------------------------------------------------------------------- Total assets $883,013 $741,254 - ---------------------------------------------------------------------- Liabilities Deposits: Non-interest bearing $122,429 $112,543 Interest bearing: Certificates of deposit $100,000 and over 55,486 39,510 Savings and time deposits 403,036 393,950 - ---------------------------------------------------------------------- Total deposits 580,951 546,003 - ---------------------------------------------------------------------- Federal funds purchased and securities sold under agreements to repurchase Federal Home Loan Bank advances 125,000 60,000 Corporation - obligated mandatorily redeemable trust preferred securities of subsidiary 104,526 70,014 trust holding solely junior subordinated debentures of Corporation 10,000 10,000 Accounts payable and accrued liabilities 6,544 6,414 - ---------------------------------------------------------------------- Total liabilities 827,021 692,431 - ---------------------------------------------------------------------- Stockholders' equity Preferred Stock, no par value, authorized 5,000,000 shares; None Issued 0 0 Common stock, no par value: Authorized 20,000,000 shares; issued 9,515,713 and 9,482,704 shares in 2003 and 2002, respectively Additional paid in capital 4,616 4,348 Retained earnings 31,573 27,412 - ---------------------------------------------------------------------- Treasury stock at cost (1,042,068 and 1,066,924 shares in 2003 and 2002, respectively) (4,110) (3,870) Restricted stock (14) (28) Accumulated other comprehensive income 4,715 2,146 - ---------------------------------------------------------------------- Total stockholders' equity 55,992 48,823 - ---------------------------------------------------------------------- Total liabilities and stockholders' equity $883,013 $741,254 - ---------------------------------------------------------------------- All common stock share and per common share amounts have been restated to reflect the 2-for-1 common stock split declared on April 15, 2003, issued June 2, 2003 to common stockholders of record May 19, 2003. See Accompanying Notes to Consolidated Financial Statements Center Bancorp, Inc. Consolidated Statements of Income (unaudited) Three Months Ended Six Months Ended June 30, June 30, (Dollars in thousands, except per share data) 2003 2002 2003 2002 - ---------------------------------------------------------------------- Interest income: Interest and fees on loans $3,522 $3,756 $7,108 $7,429 Interest and dividends on investment securities: Taxable interest income 4,874 6,371 10,419 12,923 Nontaxable interest income 680 150 987 301 Interest on Federal funds sold and securities purchased under agreement to resell 7 9 - ---------------------------------------------------------------------- Total interest income 9,076 10,284 18,514 20,662 - ---------------------------------------------------------------------- Interest expense: Interest on certificates of deposit $100,000 or more 86 115 238 289 Interest on other deposits 1,666 2,165 3,463 4,356 Interest on short-term borrowings 1,455 1,331 2,741 2,643 - ---------------------------------------------------------------------- Total interest expense 3,207 3,611 6,442 7,288 - ---------------------------------------------------------------------- Net interest income 5,869 6,673 12,072 13,374 Provision for loan losses 79 90 159 180 - ---------------------------------------------------------------------- Net interest income after provision for loan losses 5,790 6,583 11,913 13,194 - ---------------------------------------------------------------------- Other income: Service charges, commissions and fees 421 395 838 774 Other income 136 95 247 165 BOLI 179 191 359 371 Gain on securities sold 6 56 237 242 - ---------------------------------------------------------------------- Total other income 742 737 1,681 1,552 - ---------------------------------------------------------------------- Other expense: Salaries and employee benefits 2,676 2,282 5,327 4,582 Occupancy expense, net 444 382 972 838 Premises and equipment expense 447 395 894 784 Stationery and printing expense 131 148 305 304 Marketing and advertising 112 163 289 356 Other expenses 803 847 1,559 1,808 - ---------------------------------------------------------------------- Total other expense 4,613 4,217 9,346 8,672 - ---------------------------------------------------------------------- Income before income tax expense 1,919 3,103 4,248 6,074 Income tax expense 412 1,016 1,055 1,952 - ---------------------------------------------------------------------- Net income $1,507 $2,087 $3,193 $4,122 - ---------------------------------------------------------------------- Earnings per share Basic $0.18 $0.25 $0.38 $0.49 Diluted $0.18 $0.25 $0.37 $0.49 - ---------------------------------------------------------------------- Average weighted common shares outstanding Basic 8,465,762 8,395,686 8,453,192 8,371,008 Diluted 8,544,098 8,462,380 8,541,942 8,438,920 - ---------------------------------------------------------------------- All common share and per common share amounts have been adjusted to reflect the 2-for-1 common split declared April 15, 2003 and issued June 2, 2003 to common stockholders of record May 19, 2003. See Accompanying Notes to Consolidated Financial Statements Average Balance Sheet with Interest and Average Rates Six Months Period Ended June 30, 2003 2002 - ---------------------------------------------------------------------- (tax equivalent Interest Average Interest Average basis, dollars Average Income/ Yield/ Average Income/ Yield/ in thousands) Balance Expense Rate Balance Expense Rate - ---------------------------------------------------------------------- Assets Interest-earning assets: Investment securities:(1) Taxable $500,617 $10,419 4.16% $441,898 $12,923 5.85% Non-taxable 48,778 1495 6.13% 13,071 456 6.98% Federal funds sold and securities purchased under agreement to resell 0 0 0 999 9 1.80% Loans, net of unearned income (2) 242,445 7,108 5.86% 217,984 7,429 6.82% - ---------------------------------------------------------------------- Total interest- earning assets $791,840 $19,022 4.80% 673,952 20,817 6.18% - ---------------------------------------------------------------------- Non-interest earning assets Cash and due from banks 21,907 18,387 BOLI 14,301 13,545 Other assets 26,756 23,201 Allowance for possible loan losses (2,571) (2,260) - ---------------------------------------------------------------------- Total non- interest earning assets 60,393 52,873 - ---------------------------------------------------------------------- Total assets $852,233 $726,825 - ---------------------------------------------------------------------- Liabilities and stockholders' equity Interest-bearing liabilities: Money Market deposits $95,351 570 1.20% $100,080 980 1.96% Savings deposits 156,450 1,039 1.33% 156,504 1,926 2.46% Time deposits 143,884 1,867 2.60% 101,553 1,326 2.61% Other interest bearing deposits 69,835 225 0.64% 67,047 413 1.23% Borrowings 201,477 2,494 2.48% 130,497 2,363 3.62% Trust Preferred 10,000 247 4.94% 10,000 280 5.60% - ---------------------------------------------------------------------- Total interest- bearing liabilities 676,997 6,442 1.90% 565,861 7,288 2.58% - ---------------------------------------------------------------------- Noninterest- bearing liabilities: Demand deposits 117,322 108,047 Other noninterest- bearing deposits 468 511 Other liabilities 5,251 5,817 - ---------------------------------------------------------------------- Total noninterest- bearing liabilities 123,041 114,375 - ---------------------------------------------------------------------- Stockholders' equity 52,195 46,769 - ---------------------------------------------------------------------- Total liabilities and stockholders' equity $852,233 $726,825 - ---------------------------------------------------------------------- Net interest income (tax- equivalent basis) $12,580 $13,529 Net Interest Spread 2.90% 3.60% - ---------------------------------------------------------------------- Net interest income as percent of earning- assets 3.18% 4.01% - ---------------------------------------------------------------------- Tax equivalent adjustment (3) (508) (155) - ---------------------------------------------------------------------- Net interest income $12,072 $13,374 - ---------------------------------------------------------------------- (1)Average balances for available-for- sale securities are based on amortized cost (2)Average balances for loans include loans on non- accrual status (3)The tax-equivalent adjustment was computed based on a statutory Federal income tax rate of 34 percent Average Balance Sheet with Interest and Average Rates Three Month Period Ended June 30, 2003 2002 - ---------------------------------------------------------------------- (tax equivalent Interest Average Interest Average basis, dollars Average Income/ Yield/ Average Income/ Yield/ in thousands) Balance Expense Rate Balance Expense Rate - ---------------------------------------------------------------------- Assets Interest-earning assets: Investment securities:(1) Taxable $495,838 $4,874 3.93% $437,444 $6,371 5.83% Non-taxable 69,097 1,030 5.96% 13,020 227 6.97% Federal funds sold and securities purchased under agreement to resell 0 0 0 1,352 7 2.07% Loans, net of unearned income (2) 249,340 3,522 5.65% 222,389 3,756 6.76% - ---------------------------------------------------------------------- Total interest- earning assets $814,275 $9,426 4.63% 674,205 10,361 6.15% - ---------------------------------------------------------------------- Non-interest earning assets Cash and due from banks 20,930 18,856 BOLI 14,395 13,641 Other assets 27,338 23,825 Allowance for possible loan losses (2,609) (2,296) - ---------------------------------------------------------------------- Total non- interest earning assets 60,054 54,026 - ---------------------------------------------------------------------- Total assets $874,329 $728,231 - ---------------------------------------------------------------------- Liabilities and stockholders' equity Interest-bearing liabilities: Money Market deposits $90,331 264 1.17% $91,934 456 1.98% Savings deposits 157,419 519 1.32% 157,634 1,053 2.67% Time deposits 133,797 872 2.61% 102,764 574 2.23% Other interest bearing deposits 67,461 97 0.58% 67,446 197 1.17% Borrowings 235,974 1,333 2.26% 132,198 1,188 3.59% Trust Preferred 10,000 122 4.88% 10,000 143 5.60% Total interest- bearing liabilities 694,982 3,207 1.85% 561,976 3,611 2.57% - ---------------------------------------------------------------------- Noninterest- bearing liabilities: Demand deposits 120,611 112,506 Other noninterest- bearing deposits 453 509 Other liabilities 5,369 5,971 - ---------------------------------------------------------------------- Total noninterest- bearing liabilities 126,433 118,986 Stockholders' equity 52,914 47,269 - ---------------------------------------------------------------------- Total liabilities and stockholders' equity $874,329 $728,231 - ---------------------------------------------------------------------- Net interest income (tax- equivalent basis) $6,219 $6,750 Net Interest Spread 2.78% 3.58% - ---------------------------------------------------------------------- Net interest income as percent of earning- assets 3.05% 4.00% - ---------------------------------------------------------------------- Tax equivalent adjustment (3) (350) (77) Net interest income $5,869 $6,673 - ---------------------------------------------------------------------- (1)Average balances for available-for- sale securities are based on amortized cost (2)Average balances for loans include loans on non- accrual status (3)The tax-equivalent adjustment was computed based on a statutory Federal income tax rate of 34 percent CONTACT: Center Bancorp Inc. Anthony C. Weagley, 908/688-9500 -----END PRIVACY-ENHANCED MESSAGE-----