Annual Report (Form 10-K), fiscal year 1994

ITEM 1. BUSINESS.
(A) GENERAL DEVELOPMENT OF BUSINESS.
UJB Financial Corp. ("UJB" or the "company"), registrant, commenced operations on October 1, 1970 as a New Jersey corporation and as a bank holding company registered under the Bank Holding Company Act of 1956. The company owns two banks (bank subsidiaries) and nine active non-bank subsidiaries. At December 31, 1994 the company had total consolidated assets of $15,429,472,000 which ranked it as the third largest New Jersey based bank holding company. The bank subsidiaries engage in a general banking business. United Jersey Bank is UJB's largest bank subsidiary, accounting for approximately 82% of UJB's total consolidated assets at December 31, 1994. The non-bank subsidiaries engage primarily in securities brokerage, venture capital investment, commercial finance lending, lease financing, and reinsuring credit life and disability insurance policies related to consumer loans made by the bank subsidiaries.
UJB Financial Corp. has its corporate office at 301 Carnegie Center, P.O. Box 2066, Princeton, New Jersey 08543-2066.
On January 19, 1995, the company announced a definitive agreement to acquire Bancorp New Jersey, Inc. with total assets of approximately $480,371,000. The merger is expected to occur in the second or third quarter of 1995. In addition, the company successfully completed the acquisitions of VSB Bancorp, Inc. (VSB) and Palisade Savings Bank, FSB (Palisade) during 1994. VSB was accounted for as a pooling of interests and was consummated on July 1, 1994. On September 16, 1994 the acquisition of Palisade was completed and accounted for under the purchase method.
The restructuring of the company along core lines of business and the consolidations of banks was completed. The three Pennsylvania banks were merged into one entity on March 18, 1994 under the name of First Valley Bank. In addition, the three New Jersey banks were consolidated into a single statewide bank called United Jersey Bank which was completed on July 15, 1994.
The following table lists each bank subsidiary, the location of its principal office, the number of its banking offices and, in thousands of dollars, its total assets and deposits as of December 31, 1994. Both the New Jersey and Pennsylvania locations are state banks, however only the New Jersey bank is a member of the Federal Reserve System.
--------------- (1) Not adjusted to exclude interbank deposits or other transactions among the subsidiaries.
(2) Restated to reflect the merger of Palisade Savings Bank, FSB on February 17, 1995.
(B) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS.
UJB is engaged in the business of managing or controlling banks and such other businesses related to banking as may be authorized under the Bank Holding Company Act of 1956, as amended. The registrant is also engaged in furnishing services to, or performing services for its present operating subsidiaries.
The major line of business is banking. UJB owns and operates two bank subsidiaries.
UJB also owns and operates nine active non-bank subsidiaries -- two stock brokerage firms, a venture capital company, a commercial finance company, two leasing companies, two credit life reinsurance companies and a data processing company. Total revenues (excluding intercompany revenues) for the non-bank subsidiaries as a group during the last three years did not account for 10% or more of consolidated revenues of UJB and subsidiaries.
(C)(1) NARRATIVE DESCRIPTION OF BUSINESS.
Bank Subsidiaries
United Jersey Bank was organized in 1899 and is the company's largest bank subsidiary. The bank had total assets of $12,582,814,000 at December 31, 1994. Based on the latest available data, it ranked as the third largest New Jersey based commercial bank. United Jersey Bank operates 51 offices to serve most of the 70 communities in Bergen County, the second most populous county in New Jersey. It also operates 146 banking offices throughout New Jersey. First Valley Bank was organized in 1968 and is the company's Pennsylvania bank subsidiary. The bank had total assets of $2,795,497,000 at December 31, 1994. First Valley Bank operates 73 offices in 13 counties in northeast Pennsylvania.
The company's bank subsidiaries are engaged in a general banking business. Its major lines of business include commercial lending, retail banking, mortgage banking and investment management. These lines of business offer a wide range of financial services to individuals, businesses, not-for-profit organizations, government entities and other financial institutions.
Non-Bank Subsidiaries
The company, through its wholly-owned subsidiary, UJB Credit Corporation, owns and operates Gibraltar Corporation of America. The company directly owns and operates UJB Investor Services Company, United Jersey Credit Life Insurance Company and United Jersey Venture Capital, Inc. The company indirectly owns United Jersey Leasing Corporation, Lehigh Securities Corporation, First Valley Leasing, Inc., First Valley Life Insurance Company and UJB Financial Service Corporation.
Gibraltar Corporation of America is a commercial finance company operating in the New York and New Jersey metropolitan areas, which specializes in making loans secured by accounts receivable, inventory, and equipment, as well as financing sales and leases of equipment. UJB Investor Services Company and Lehigh Securities Corporation are engaged in the stock brokerage business. United Jersey Credit Life Insurance Company and First Valley Life Insurance Company reinsure credit life and disability insurance policies related to the bank subsidiaries' consumer loans. United Jersey Venture Capital, Inc. makes venture capital investments. United Jersey Leasing Corporation and First Valley Leasing, Inc. were established for the purpose of making equipment leases. UJB Financial Service Corporation provides data processing services to banking subsidiaries.
Supervision and Regulation
The banking industry is highly regulated. Statutory and regulatory controls increase a bank holding company's cost of doing business and limit the options of its management to deploy assets and maximize income. Areas subject to regulation and supervision by the bank regulatory agencies include: nature of business activities; minimum capital levels; dividends; affiliate transactions; expansion of locations; acquisitions and mergers; interest rates paid on certain types of deposits; reserves against deposits; terms, amounts and interest rates charged to various types of borrowers; and investments.
BANK HOLDING COMPANY REGULATION
UJB is a bank holding company within the meaning of the Bank Holding Company Act of 1956, as amended (the "Holding Company Act"). As a bank holding company, UJB is supervised by the Board of Governors of the Federal Reserve System (the "FRB") and is required to file reports with the FRB and provide such additional information as the FRB may require. UJB is also regulated by the New Jersey and Pennsylvania Departments of Banking.
The Holding Company Act prohibits UJB, with certain exceptions, from acquiring direct or indirect ownership or control of more than five percent of the voting shares of any company which is not a bank and from engaging in any business other than that of banking, managing and controlling banks or furnishing services to subsidiary banks, except that it may, upon application, engage in, and may own shares of companies engaged in, certain businesses found by the FRB to be so closely related to banking "as to be a proper incident
thereto" if the FRB determines that such acquisitions will be, on balance, beneficial to the public. The Holding Company Act requires prior approval by the FRB of the acquisition by UJB of more than five percent of the voting stock of any additional bank and in effect permits only the acquisition of banks located in New Jersey and in states (including Pennsylvania) where laws specifically permit acquisitions of banks by out-of-state bank holding companies having the largest proportion of their deposits in New Jersey. Acquisitions in any state will be permitted after September 29, 1995. See "Interstate Banking" below. Satisfactory financial condition, particularly with regard to capital adequacy, and satisfactory Community Reinvestment Act ratings are generally prerequisites to obtaining federal regulatory approval to make acquisitions. All of UJB's subsidiary banks are currently rated "satisfactory" or better under the Community Reinvestment Act.
In addition, UJB is subject to various requirements under both New Jersey and Pennsylvania laws concerning future acquisitions. Such laws require the prior approval of the relevant Department of Banking to acquire any bank chartered by that State. Statewide branching is permitted in New Jersey and Pennsylvania. Branch approvals are subject to statutory standards relating to safety and soundness, competition, and public convenience. The Holding Company Act does not place territorial restrictions on the activities of non-bank subsidiaries of bank holding companies.
The policy of the FRB provides that UJB is expected to act as a source of financial strength to each of its subsidiary banks and to commit resources to support such subsidiary banks in circumstances in which it might not do so absent such policy. In addition, any capital loans by UJB to any subsidiary bank would be subordinate in right of payment to deposits and certain other indebtedness of such subsidiary bank.
UJB is required by the Holding Company Act to file annual reports of its operations with the FRB and is subject to examination by the FRB. Under Section 106 of the 1970 amendments to the Holding Company Act and the regulations of the FRB, bank holding companies and their subsidiaries are prohibited from engaging in certain tie-in arrangements in connection with any extension of credit or provision of any property or services. Regulations of the FRB under the Federal Reserve Act require that reserves be maintained by a UJB bank subsidiary to the extent that the proceeds of any UJB promissory note, acknowledgement of advance, due bill or similar obligation, with a maturity of less than four years, are used to supply or to maintain the availability of funds (other than capital) to the bank subsidiary, except any such obligation that, had it been issued directly by the bank subsidiary, would not constitute a deposit. They also place limits upon the amount of UJB's equity securities which may be repurchased or redeemed by UJB.
Bank regulatory authorities in the United States have issued risk-based capital standards by which all bank holding companies and banks are evaluated in terms of capital adequacy. These guidelines relate a company's capital to the risk profile of its assets. The standards require all banks to have Tier I capital of at least 4 percent, total capital, including Tier I capital, of at least 8 percent of risk-adjusted assets and a minimum leverage ratio of 4 percent for institutions that have a regulatory rating of two or more. Failure to meet minimum capital requirements can initiate certain actions by regulators that could have a direct effect on the operations and financial statements. Tier I capital includes shareholders' equity less certain intangibles and unrealized gains and losses on available-for-sale securities, net of tax. Total capital is comprised of Tier I capital, qualifying debt instruments, and a portion of the allowance for loan losses. Tier I leverage ratio measures the ratio of Tier I capital to quarterly average assets less certain intangibles. As of December 31, 1994, UJB's Tier I capital was 9.27%, total risk-based capital was 12.04%, and the leverage ratio was 7.02%.
INTERSTATE BANKING AND REGULATORY RELIEF LEGISLATION IN 1994
The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, enacted September 29, 1994, permits full nationwide interstate banking (e.g., bank holding company ("BHC") acquisition of bank subsidiaries anywhere in the U.S.), with interstate branching to be permitted after June 1, 1997. Importantly, states retain the right to opt-out of interstate branching and to require that out-of-state BHCs and banks comply with state rules governing entry.
A brief summary of the Act's major provisions follows:
(A) INTERSTATE BANKING. One year after enactment, adequately capitalized and adequately managed BHCs would be permitted to acquire banks in any state. States cannot opt-out of this provision. State laws may prohibit the purchase of banks 5 years of age or less. Concentration limits are imposed (10% of bank and thrift deposits nationwide/30% in the state; the state supervisor may waive this 30% limit). States retain existing authority to impose nondiscriminatory deposit caps. Those banks with over 30% of statewide deposits may be sold to out-of-state BHCs without being subject to the 30% rule where the BHC has no presence in the host state (some limited exceptions may apply).
(B) BANK/THRIFT AFFILIATE AGENCY AUTHORITY. One year after enactment, an insured bank subsidiary may act as agent for an affiliate bank or thrift in offering specified banking services (receive deposits, renew time deposits, close loans, service loans, and receive payments on loans and other obligations) both within and across state lines without offices of the agent being deemed branches of the affiliates on whose behalf they act. Thrift affiliates may provide these same agency services under limited circumstances.
(C) INTERSTATE BRANCHING.
(1) Branching Through Bank Mergers. After June 1, 1997, the appropriate Federal regulator may approve the merger of adequately capitalized banks across state lines, so long as the resulting institution is adequately capitalized and adequately managed. This will allow BHCs, after that date, to convert their subsidiary banks in different states into branches of the same bank; banks in different states, whether within holding companies or independent, will likewise be permitted to directly merge. Bank mergers would have to conform with state laws which impose age restrictions of up to 5 years on acquisitions of new banks. States may opt-out of interstate branching from September 29, 1994 until June 1, 1997. Doing so will preclude the merger of banks in that state with banks located in other states; banks located in states which opt-out would not be permitted to have interstate branches. States may permit interstate branching earlier than June 1, 1997, where both states involved with the bank merger expressly permit it by statute. Where the bank/BHC would be effectively moving into a new state as a result of the merger, regulators must consider Community Reinvestment Act compliance of all bank affiliates before approving the merger application. The 10% nationwide/30% deposit concentration limits discussed above also apply to bank mergers; states retain current authority to impose deposit caps. Host state banks with over 30% of statewide deposits may be merged with out-of-state banks without being subject to the 30% rule where the out-of-state bank has no presence in the host state (some limited exceptions may apply).
(2) Direct Branching by Banks. National and state banks are prohibited from directly acquiring an existing branch (separate from the acquisition of a charter), or establishing a de novo branch, in a host state unless the law of the host state permits it.
(D) FOREIGN BANKS. Foreign branches and agencies located in the U.S. will be permitted to branch interstate to the same extent as domestic institutions. However, certain restrictions are placed on foreign branch operations in the U.S.
(E) LAWS APPLICABLE TO STATE INTERSTATE BRANCHES. Branches of out-of-state state chartered banks will be subject to the laws of the host state, including permissible activities, as if it were a branch of a bank located in that host state. State bank supervisors of the host state may examine an in-state branch of an out-of-state state bank for purposes of determining compliance with state law and to ensure that the branch is being operated in a safe and sound manner.
(F) OTHER. For financial institutions that maintain one or more branches outside the home state, the appropriate Federal banking agency must prepare a written evaluation of the entire institution's Community Reinvestment Act performance and a separate evaluation of the institution's performance for each state and metropolitan statistical area, and for the nonmetropolitan portion of the state. The Act prohibits the use of interstate branches primarily for the purpose of deposit production, and requires that the interstate bank's level of lending in the host state relative to deposits from the host state (using available information) is greater than half the average of all banks with home offices in that state. The appropriate Federal regulator may require closure of a branch which fails this test. In the case of an interstate bank that proposes to close any branch in a low- or moderate-income area, the branch closure notices must contain the mailing address of the bank's Federal regulator, and a statement that comments regarding the closure may be mailed to that regulator. If a person from the area in which the branch is located submits a written request and includes a statement of specific reasons, and the request is not frivolous, the agency must consult with community leaders and convene a meeting with such leaders and depository institutions to explore the feasibility of obtaining adequate alternative facilities and services. The legislation specifically states that this process shall not affect the authority of the bank to close the branch, or the timing of the closing.
Congress also enacted the Riegle Community Development and Regulatory Improvement Act of 1994 on September 23, 1994. This Act amended the Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA") to allow regulators to issue guidelines instead of regulations on asset quality, earnings and stock valuation standards, provides for electronic filing of call reports and currency transaction reports, exempts business purpose loans from the Real Estate Settlement Procedures Act, reduces certain audit requirements of FDICIA, and included many other miscellaneous provisions intended to reduce regulatory burdens. However, stricter requirements are imposed on banks with respect to requiring flood insurance from borrowers.
FDICIA
The Federal Deposit Insurance Corporation Improvement Act of 1991, which became law in December 1991, in addition to authorizing increased funding for the Bank Insurance Fund ("BIF") by raising the FDIC's borrowing limits and eliminating the cap on deposit insurance premiums, imposes extensive additional statutory requirements regarding the roles, responsibilities, and liabilities of a bank's senior management, directors, independent auditors, and regulators in compliance, management and financial affairs of a bank. This Act has required additional time, effort and resources to be devoted to compliance and internal controls.
FDICIA requires each financial institution with $500 million or more in total assets to have an annual audit of its financial statements by an independent public accountant and to have an audit committee consisting of independent outside directors. There are more stringent criteria for audit committees of institutions with $3 billion or more in total assets. It also requires that management report on and assess their responsibility for internal controls over financial reporting and compliance with designated laws and regulations.
FDICIA requires each federal banking agency to ensure that its risk-based capital standards take adequate account of interest rate risk, concentration of credit risk and the risks of non-traditional activities, as well as reflect the actual performance and expected risk of loss on multi-family mortgages. In addition, pursuant to FDICIA, each federal banking agency has promulgated regulations specifying the levels at which a financial institution would be considered "well capitalized," "adequately capitalized," "undercapitalized," "significantly undercapitalized," or "critically undercapitalized," and to take certain mandatory and discretionary supervisory actions based on the capital level of the institution.
Insured institutions are generally prohibited from paying dividends or management fees if after making such payments, the institution would be "undercapitalized." An "undercapitalized" institution also is required to develop and submit to the appropriate federal banking agency a capital restoration plan, and each company controlling such institution must guarantee the institution's compliance with such plan. The liability of a holding company under any such guarantee is limited to the lesser of five percent of the institution's total
assets at the time it became undercapitalized or the amount needed to comply with all applicable capital standards. The FDIC is accorded a priority over the claims of unsecured creditors in any bankruptcy proceeding of a holding company that has guaranteed an institution's compliance with a capital restoration plan. Further, "undercapitalized," "significantly undercapitalized," and "critically undercapitalized" institutions are subject to increasingly extensive requirements and limitations, including mandatory sale of stock, forced mergers, and ultimately receivership or conservatorship. A "critically undercapitalized" institution, beginning 60 days after it becomes "critically undercapitalized," generally is prohibited from making any payment of principal or interest on the institution's subordinated debt.
FDICIA provides that the FDIC insurance assessments are to move from flat-rate premiums to a new system of risk-based premium assessments. The risk-based insurance assessment will evaluate an institution's potential for causing a loss to the insurance fund and base deposit insurance premiums upon individual bank profiles. Currently the annual assessment rates for the company's bank subsidiaries are 23 cents per $100 of domestic deposits. These rates are applicable through June 30, 1995 at which time they will be reevaluated based upon more current risk classifications. The FDIC has published proposals where BIF members would pay assessment rates ranging from 4 to 31 cents per $100 of domestic deposits depending upon risk classification.
FDICIA also contains the Truth in Savings Act, which requires certain disclosures to be made in connection with deposit accounts offered to consumers. The FRB has adopted regulations implementing the provisions of the Truth in Savings Act.
In addition, significant provisions of FDICIA require federal banking regulators to draft standards in a number of other areas to assure bank safety and soundness, including internal controls, information systems and internal audit systems, credit underwriting, asset growth, compensation, loan documentation and interest rate exposure. The bank regulators have proposed substantially similar regulations that impose on banks which fail to meet the safety and soundness standards of FDICIA substantially the same requirements respecting the formulation and implementation of a corrective plan of action as apply in the case of banks failing to meet the capital adequacy standards. FDICIA require the regulators to establish maximum ratios of classified assets to capital, and minimum earnings sufficient to absorb losses without impairing capital. The legislation also contains provisions which tighten independent auditing requirements, restrict the activities and investments of state-chartered banks to those permitted for national banks, amend various consumer banking laws, limit the ability of "undercapitalized" banks to borrow from the FRB discount window, and require federal banking regulators to perform annual on-site bank examinations and set standards for real estate lending. FDICIA has significantly increased costs for the banking industry due to higher FDIC assessments, additional layers of reporting and compliance requirements and more limitations on the activities of all but the most well capitalized banks.
FIRREA
Although the most significant purpose of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ("FIRREA") was to restructure the savings and loan industry, many of its provisions have importance for the commercial banking industry, including the provision which authorized bank holding companies to acquire healthy as well as troubled thrift institutions, generally without limitations on interstate acquisitions, while retaining thrift branching powers.
Under FIRREA, a depository institution insured by the FDIC can be held liable for any loss incurred by, or reasonably expected to be incurred by, the FDIC in connection with (i) the default of a commonly controlled FDIC-insured depository institution or (ii) any assistance provided by the FDIC to a commonly controlled FDIC-insured depository institution in danger of default. "Default" is defined generally as the appointment of a conservator or receiver and "in danger of default" is defined generally as the existence of certain conditions, including a failure to meet minimum capital requirements, indicating that a "default" is likely to occur in the absence of regulatory assistance. These provisions have commonly been referred to as FIRREA's "cross guarantee" provisions. Liability under the "cross guarantee" provisions is subordinate to claims (other than claims by shareholders, including bank holding companies, in their capacity as sharehold-
ers, and affiliates of the institution) of depositors, secured creditors, other general or senior creditors, and holders of obligations subordinated to depositors or other creditors. The FDIC may waive its rights under limited circumstances generally applicable to acquisitions of troubled institutions.
FIRREA gives the FDIC as conservator or receiver of a failed depository institution express authority to repudiate contracts with such institution which it determines to be burdensome or if such repudiation will promote the orderly administration of the institution's affairs. Certain "qualified financial contracts", defined to include securities contracts, commodity contracts, forward contracts, repurchase agreements, and swap agreements, are generally excluded from the repudiation powers of the FDIC. The FDIC is also given authority to enforce contracts made by a depository institution, notwithstanding any contractual provision providing for termination, default, acceleration, or exercise of rights upon, or solely by reason of, insolvency or the appointment of a conservator or receiver. Insured depository institutions are also prohibited from entering into contracts for goods, products or services which would adversely affect the safety and soundness of the institution.
The bank regulatory agencies have broad discretion to issue cease and desist orders if they determine that the company or its subsidiaries are engaging in "unsafe or unsound banking practices." In addition, the federal bank regulatory authorities are empowered to impose substantial civil money penalties for violations of certain Federal banking statutes and regulations. Financial institutions, and directors, officers, employees, controlling shareholders, agents, consultants, attorneys, accountants, appraisers and others associated with a financial institution could now be subject to increased fines, penalties, and other enforcement actions as a result of provisions of FIRREA. Further, under FIRREA the failure to meet capital guidelines could subject a banking institution to a variety of enforcement remedies available to Federal regulatory authorities, including the termination of deposit insurance by the FDIC.
REGULATION OF SUBSIDIARIES
Various laws and the regulations thereunder applicable to the company and its bank subsidiaries impose restrictions and requirements in many areas, including capital requirements, the maintenance of reserves, establishment of new offices, the making of loans and investments, consumer protection, employment practices and other matters. There are various legal limitations, including Sections 23A and 23B of the Federal Reserve Act, on the extent to which a bank subsidiary may finance or otherwise supply funds to UJB or its non-bank subsidiaries. Under federal law, no bank subsidiary may, subject to certain limited exceptions, make loans or extensions of credit to, or investments in the securities of, its parent or non-bank subsidiaries of its parent or take their securities as collateral for loans to any borrower. Each bank subsidiary is also subject to collateral security requirements for any loans or extensions of credit permitted by such exceptions. Further, a subsidiary bank may only engage in most transactions with other subsidiaries if terms and conditions are at least as favorable to the bank as those prevailing for transactions with unaffiliated companies. UJB and its banking and other subsidiaries are also subject to certain restrictions with respect to engaging in the business of issuing, underwriting, public sale, flotation or distribution of securities.
The two state-chartered subsidiary banks are subject to the supervision of, and to regular examination by, the New Jersey Departments of Insurance and Banking, in the case of United Jersey Bank, and the Pennsylvania Department of Banking, in the case of First Valley Bank. In addition, the subsidiary banks are subject to examination by the FDIC, and by the U.S Department of Education with respect to student loan activity. United Jersey Bank is also subject to examination by the FRB. The Municipal Bond Department of United Jersey Bank, as a registered municipal securities dealer, is subject to the supervision of the Municipal Securities Rulemaking Board.
None of the stocks of the subsidiary banks or other subsidiaries owned or controlled by UJB carry statutory double liability. However, Article XIV, Section 11 of the Constitution of the State of Arizona provide that the stock of UJB's credit life insurance subsidiaries, may be subject to assessment to restore impaired capital under certain circumstances as and to the extent provided therein. There is no such provision in New Jersey or Pennsylvania law governing UJB's state-chartered banks.
Certain statutory restrictions may affect the declaration and payment of dividends by the subsidiary banks to UJB. For additional information see Note 14 on page 49 of the 1994 Annual Report incorporated herein by reference as Exhibit 13.
UJB and its non-bank subsidiaries are subject to examination by the New Jersey and Pennsylvania state and the three federal bank regulatory agencies at their discretion. As a mortgagee approved by Department of Housing and Urban Development and a seller-servicer of mortgages approved by the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, and the New Jersey Housing and Mortgage Finance Agency, United Jersey Bank is subject to regulation or supervision by these government agencies. First Valley Bank is a participant in the mortgage program conducted by the Pennsylvania Housing Finance Agency and is subject to the supervision of that agency. UJB Investor Services Company and Lehigh Securities Corporation are subject to regulation and examination by the Securities and Exchange Commission, the National Association of Securities Dealers, Inc. and the New Jersey Bureau of Securities. UJB Investor Services Company is also subject to regulation and examination by the New York Bureau of Investor Protection and Securities and the Florida Department of Banking and Finance. Lehigh Securities Corporation is also subject to regulation and examination by the Pennsylvania Securities Commission and, as a registered municipal securities dealer, is subject to the supervision of the Municipal Securities Rulemaking Board. United Jersey Credit Life Insurance Company and First Valley Life Insurance Company are subject to regulation and examination by the Department of Insurance of the State of Arizona.
UJB and its subsidiaries are also subject to various reporting requirements of Federal and state securities laws and regulations of the Securities and Exchange Commission and the New York Stock Exchange.
From time to time, various bills are introduced in the United States Congress and the New Jersey or Pennsylvania Legislature which could result in additional regulation of the business of UJB and its subsidiaries, or further increase competition.
There is a continuing trend toward regulating every aspect of retail banking through consumer protection laws, at significant expense to financial institutions. At the same time, securities brokers, insurance companies, retailers and other non-bank entities are being allowed to offer a variety of traditional bank services without being subject to the same degree of regulation as banks and bank holding companies. If these trends continue without providing parity to the commercial banks in matters such as permissible services, taxation and interest rates chargeable on loans, adverse effects on commercial banks could ensue.
In its operations in other countries, United Jersey Bank is also subject to restrictions imposed by the laws and banking authorities of such countries.
References under this caption, Supervision and Regulation, to applicable statutes are brief summaries of portions thereof which do not purport to be complete and which are qualified in their entirety by reference to such statutes.
Monetary Policy and Economic Conditions
The earnings and business of UJB and its subsidiaries are affected by the policies of regulatory authorities, including the FRB. The monetary policies of the FRB have had a significant effect on the operating results of commercial banks in the past and are expected to continue to do so in the future. Because of the changing conditions in the national and international economy and in the money markets, as a result of actions by monetary and fiscal authorities, interest rates, credit availability and deposit levels may change due to circumstances beyond the control of UJB or its subsidiaries.
Effects of Inflation
A bank's asset and liability structure differs from that of an industrial company, since its assets and liabilities fluctuate over time based upon monetary policies and changes in interest rates. The growth in the bank's earning assets, regardless of the effects of inflation, will increase net interest income if the bank is able to maintain a consistent interest spread between earning assets and supporting liabilities.
A purchasing power gain or loss from holding net monetary assets during the year represents the effect of general inflation on monetary assets and liabilities. Almost all of the assets and liabilities of UJB are considered monetary because they are fixed in terms of dollars and therefore, are not materially affected by inflation.
(C)(1)(I) PRINCIPAL PRODUCTS AND SERVICES RENDERED BY INDUSTRY SEGMENTS.
Not applicable. See response to Item 1(b) contained elsewhere in this report.
(C)(1)(II) DESCRIPTION OF NEW PRODUCTS OR SEGMENTS.
Not applicable.
(C)(1)(III) SOURCES AND AVAILABILITY OF RAW MATERIALS.
Not applicable.
(C)(1)(IV) IMPORTANCE OF PATENTS, TRADEMARKS, LICENSES, FRANCHISES AND CONCESSIONS HELD.
Patents and licenses, as such, are not of importance to UJB or its subsidiaries, but operating charters (similar to licenses) -- approved banking location authorizations granted by the New Jersey and Pennsylvania Departments of Banking for state-chartered bank subsidiaries -- are vital to the operation and expansion of the bank subsidiaries. Such charters are perpetual unless revoked by the granting authorities. Various licenses and approvals to do business are also required by the other regulatory agencies referred to under Supervision and Regulation above. Most of these licenses and approvals require periodic renewal.
UJB has several registered service marks, none of which is considered material to its business. The duration of each registration is perpetual so long as the registrant continues to use the mark.
(C)(1)(V) SEASONALITY OF BUSINESS.
Not applicable.
(C)(1)(VI) WORKING CAPITAL REQUIREMENTS RELATED TO INVENTORY.
Not applicable.
(C)(1)(VII) CONCENTRATION OF CUSTOMERS.
The business of the registrant and its subsidiaries is not dependent on a single customer, nor on a small group of customers.
(C)(1)(VIII) BACKLOG OF ORDERS.
Not applicable.
(C)(1)(IX) GOVERNMENT CONTRACTS.
No material portion of the business of UJB and its subsidiaries is subject to renegotiation of profits or termination of contracts or subcontracts at the election of the Government.
(C)(1)(X) COMPETITION.
Each bank subsidiary faces strong competition for local business in the communities it serves from other banking institutions as well as from other financial institutions. United Jersey Bank and First Valley Bank compete in the national market with other major banking and financial institutions in the New York and Philadelphia areas, many of which are substantially larger and may have greater financial resources. A number of these institutions offer their services throughout New Jersey and Pennsylvania through bank and non-bank subsidiaries, loan production offices and solicitations through broadcast and print media and direct mail. For international business, United Jersey Bank competes not only with a substantial number of United States banks having foreign departments, but also with agencies and branches of foreign banks located in the United States and with other major banks throughout the world. The effect of liberalized branching and acquisition
laws has been to lower barriers to entry into the banking business and to increase competition for banking business, as well as to increase both competition for and opportunities to acquire other financial institutions. Nationwide interstate banking will accelerate these trends.
For most of the services which the subsidiaries perform, there is increasing competition from financial institutions other than commercial banks due to the relaxation of regulatory restrictions. Money market funds actively compete with banks for deposits. Savings banks, savings and loan associations and credit unions also actively compete for deposits and for various types of loans; such institutions, as well as securities brokers, consumer finance companies, mortgage companies, factors, insurance companies and pension trusts, are important competitors. Financial institutions such as these, as well as retailers and other non-bank entities, have acquired so-called "non-bank banks" permitting them to offer traditional banking services without being subject to the same degree of regulation. Insurance companies, mutual fund investment counseling firms and other business firms and individuals offer competition for personal and corporate trust services and investment advisory services.
Each of UJB's non-bank subsidiaries competes with a very large number of competitors, many of which are substantially larger and have greater financial resources.
Competition for banking and permitted non-bank services is based on price, nature of product, quality of service, and in the case of retail activities, convenience of location.
(C)(1)(XI) RESEARCH AND DEVELOPMENT.
UJB and its subsidiaries conduct research activities, from time to time, relating to the development of new services. Expenditures for these activities are not considered material to the financial condition of UJB and its subsidiaries. Research expenditures during 1994 were charged directly to expense as incurred.
(C)(1)(XII) COST OF COMPLIANCE WITH ENVIRONMENTAL REGULATIONS.
It is not expected that compliance with Federal, state and local provisions relating to the protection of the environment will have any material effect on UJB or its subsidiaries.
(C)(1)(XIII) NUMBER OF PERSONS EMPLOYED.
At December 31, 1994, there were 6,143 persons, on a full-time equivalent basis, employed by UJB and its subsidiaries.
(D) FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS AND EXPORT SALES.
United Jersey Bank operates an International Banking Department principally for the benefit of its domestic customers and, in January 1974, opened its first offshore banking facility on the island of Grand Cayman in the British West Indies. Business at the offshore facility constituted less than one-half of one percent of the total assets and income of United Jersey Bank in 1994.
(E) STATISTICAL INFORMATION.
The following tables set forth, on a consolidated basis, certain statistical information concerning UJB and its subsidiaries. The tables should be read in conjunction with the consolidated financial statements contained in the 1994 Annual Report to Shareholders, included herein as Exhibit 13. Average data have been derived from daily balances except in the case of certain smaller subsidiaries where month-end balances were used.
Distribution of Assets, Liabilities and Shareholders' Equity; Interest Rates and Interest Differential.
The following table shows the Average Balance Sheet with Resultant Interest and Rates for the years ended 1994 through 1992. Net interest income is the amount by which interest income exceeds interest expense. Net interest income in any given period is affected by the average volume of earning assets and the yield earned on such assets, the average volume of interest bearing sources of funds and the average rate paid on such liabilities.
--------------- Notes: -- The tax equivalent adjustment was computed based on a Federal income tax rate of 35% for 1994 and 1993 and 34% for 1992.
The following table shows the approximate effect on the effective interest differential of volume and rate changes for the years 1994 and 1993 on a tax-equivalent basis. For purposes of this table, the change in interest due to both volume and rate has been allocated to change due to volume and change due to rate in proportion to the relationship of the absolute dollar amounts of the change in each.
Investment Securities Available for Sale
The following table shows the carrying value of investment securities available for sale at December 31 for each of the following years:
The following table shows the maturity distribution and weighted average yields to maturity on a tax-equivalent basis for investment securities available for sale, by type and in total, of Federal agencies, and other securities at December 31, 1994. The carrying value represents the market value of securities at December 31, 1994 and are distributed by contractual maturity. However, mortgage-backed securities and other securities which may have prepayment provisions are distributed to a maturity category based on estimated average lives. These principal prepayments are not scheduled over the life of the investment, but are reflected as adjustments to the final maturity distribution. The distribution follows:
--------------- (1) Excludes corporate stock with a carrying value of $27,884,000 and Federal Reserve Bank stock with a carrying value of $11,401,000.
(2) Weighted average yields have been computed on a tax-equivalent basis using the statutory Federal income tax rate of 35%.
Investment Securities
The following table shows the carrying value of investment securities at December 31 for each of the past three years:
The following table shows the maturity distribution and weighted average yields to maturity on a tax-equivalent basis for investment securities, by type and in total, of U.S. Government, Federal agencies, states and political subdivisions and other securities at December 31, 1994. The carrying value and market value of securities at December 31, 1994 are distributed by contractual maturity. However, mortgage-backed securities and other securities which may have prepayment provisions are distributed to a maturity category based on estimated average lives. These principal prepayments are not scheduled over the life of the investment, but are reflected as adjustments to the final maturity distribution. The distribution follows:
--------------- (1) Weighted average yields have been computed on a tax-equivalent basis using the statutory Federal income tax rate of 35%.
Loan Portfolio
The following table shows the classification of consolidated loans (net of unearned discount and before deduction of the allowance for loan losses) by major category at December 31 for each of the past five years:
Unearned discount on loans and leases at December 31, 1994 and 1993 were $68.7 million and $39.3 million, respectively. At December 31, 1994 commercial mortgage loans and residential mortgage loans represented 15.1% and 13.8% of total loans, respectively. Home equity loans represented 15.8% of the total loan portfolio at year end. As of December 31, 1994 there are no other concentrations of loans which exceed 10% of total loans.
The following table shows the approximate maturities of selected loans at December 31, 1994. The loans are segregated between those which are at predetermined interest rates and those at floating or adjustable interest rates. The table includes non-performing loans which are discussed on pages 18 and 19 of this report:
The loan portfolio is reviewed regularly to determine whether specific loans should be placed in a non-performing status. Non-performing loans consist of commercial non-accrual and renegotiated loans. Non-accrual loans include loans that are past due 90 days or more as to principal or interest, or where reasonable doubt exists as to timely collectibility. At the time a loan is placed on non-accrual status, previously accrued and uncollected interest is reversed against interest income. Interest collections on non-accrual loans are generally credited to interest income when received. However, if ultimate collectibility of principal is in doubt, interest collections are applied as principal reductions. After principal and interest payments are brought current and future collectibility is reasonably assured, loans are returned to accrual status. Renegotiated loans are loans whose contractual interest rates have been reduced to below market rates or other significant concessions made due to a borrower's financial difficulties. Interest income on renegotiated loans is generally credited to interest income as received. Non-performing loans do not include past due consumer loans 90 days or more as to principal or interest, but which are well collateralized and in the process of collection.
The following table shows, in thousands of dollars, the principal amount of commercial non-accruing loans, renegotiated loans, and loans contractually past due 90 days or more at December 31 for each of the past five years, and their resultant impact on earnings before taxes for the years then ended. All loans in the following table represent domestic loans. There are no foreign loans included in any of the categories.
--------------- (1) Primarily all consumer loans which are well collateralized and in the process of collection.
Potential problem loans are those which management believes conditions indicate that the collection of principal and interest may be doubtful in accordance with the original contract terms. They are not included in non-performing loans as these loans are still performing. Potential problem loans were $34,614,000 and
$37,684,000 at December 31, 1994 and 1993 respectively. Potential problem loans at December 31, 1994 comprised commercial and industrial loans of $26,130,000, construction and development loans of $1,710,000, and real estate related loans of $6,774,000. Such risk associated with these loans have been factored into the company's allowance for loan losses.
Summary of Loan Loss Experience
The relationship for the past five years among loans, loans charged off and loan recoveries, the provision for loan losses and the allowance for loan losses is shown below:
For additional information, see Financial Review on pages 25 through 37 of the 1994 Annual Report incorporated herein by reference as Exhibit 13.
Implicit in the lending function is the fact that loan losses will be experienced and that the risk of loss will vary with the type of loan being made, the creditworthiness of the borrower and prevailing economic conditions. A standardized process has been established throughout the company to provide for loan losses through a reasonable and prudent methodology. This methodology includes a review to assess the risks inherent in the loan portfolio. It incorporates a credit review and gives consideration to areas of exposure such as concentrations of credit, economic and industry conditions, and negative trends in delinquencies and collections. Consideration is also given to collateral levels and the composition of the portfolio.
Specific allocations as well as a need for general reserves are identified by loan type and allocated according to the following categories of loans at December 31 for each of the past five years. The percentage of loans to total loans is based upon the classification of loans shown as follows:
Deposits
For information on classification of average balances for deposits, see "Comparative Average Balance Sheets With Resultant Interest and Rates" on page 13 of this report.
The following table shows, by time remaining to maturity, all commercial certificates of deposit $100,000 and over at December 31, 1994 (in thousands):
Return on Equity and Assets
For information on consolidated ratios, see "Summary of Selected Financial Data" on pages 38 and 39 in the 1994 Annual Report to Shareholders incorporated herein by reference as Exhibit 13.
Short-Term Borrowings
The following table summarizes information relating to certain short-term borrowings for each of the past three years:
ITEM 2.



ITEM 2. PROPERTIES.
United Jersey Bank owns the building, constructed in 1984, in West Windsor Township, New Jersey where UJB maintains its administrative headquarters. Additionally, UJB occupies offices in Hackensack, New Jersey in space provided by United Jersey Bank as well as at other locations in New Jersey, which it leases from third-party lessors. During 1978, UJB sold a six-story office building that it owned in Hackensack, adjacent to the administrative and principal banking office of United Jersey Bank. United Jersey Bank leases space in the building.
The principal banking office and administrative offices of United Jersey Bank are located in Hackensack in a nine-story building owned by the bank which was constructed in 1927. The bank occupies substantially the entire building. In addition to its principal office, United Jersey Bank owns 99 of its branch office buildings; office space in certain of these buildings is leased to others. United Jersey Bank leases the buildings and property for 98 of its branch offices. It leases a multi-level parking garage accommodating 250 cars located near the principal office and an office and warehouse facility in Fair Lawn, New Jersey. UJB leases real property located in Ridgefield Park, New Jersey and a multi-story building containing approximately 300,000 square feet of space for use by UJB Financial Service Corporation as a data processing facility which was completed in 1991. The tenant improvements and furniture, fixtures and equipment for the new facility was initially funded by UJB. On August 31, 1992, the Company consummated the sale of certain assets and simultaneously negotiated the leaseback of these assets. The previous computer center in Hackensack, owned by United Jersey Bank, has been utilized to centralize certain banking activities. The principal banking and administrative offices of First Valley Bank are located in an eleven-story building built in 1974 in Bethlehem, Pennsylvania. First Valley leases the building for an initial term ending in the year 2000, with renewal options extending for an additional 38 years. First Valley occupies approximately two-thirds of the building. All properties owned by the various bank subsidiaries are unencumbered by mortgages or similar liens.
The bank subsidiaries at December 31, 1994 operated banking offices in 17 of the 21 counties in New Jersey (Atlantic, Bergen, Burlington, Camden, Cumberland, Essex, Gloucester, Hudson, Mercer, Middlesex, Monmouth, Morris, Ocean, Passaic, Somerset, Union and Warren), and 13 of the 67 counties in Pennsylvania (Berks, Bucks, Carbon, Chester, Delaware, Lackawanna, Lancaster, Lehigh, Luzerne, Montgomery, Northampton, Philadelphia and Schuylkill). Gibraltar Corporation of America occupies leased offices in New York City, New York. UJB Investor Services Company occupies leased offices in Fort Lee, Matawan, Morristown, Paramus, Princeton and West Caldwell, New Jersey. First Valley Leasing, Inc. occupies leased offices in Bethlehem, Pennsylvania. Lehigh Securities Corporation occupies leased offices in Whitehall, Pennsylvania.
ITEM 3.

ITEM 3. LEGAL PROCEEDINGS.
Management does not believe that the ultimate disposition of the litigation discussed below will have a material adverse effect on the financial position and results of operation of the company and its subsidiaries, taken as a whole.
SHAREHOLDER SUIT
In Re UJB Financial Corp. Shareholder Litigation, United States District Court for the District of New Jersey, Trenton, Civil Action No. 90-1569. Suit filed April 5, 1990.
Three suits, UJB Financial Corporation, derivatively by Chappaqua Family Trust and Robert Bassman v. UJB Financial Corporation et al; Irwin Shapiro v. UJB Financial Corp. et al; Lester Associates and Jerome Katz v. UJB Financial Corp, et al were filed in April and May of 1990. These suits were consolidated and a Consolidated Amended Complaint and Derivative Complaint was filed on September 4, 1990.
This purported derivative and class action securities lawsuit against UJB Financial Corp. ("UJB") and certain officers and directors is brought by Plaintiffs who are alleged to have owned or purchased securities of UJB from approximately February 1, 1988 through July 1990. Violations are alleged of Sections 10(b), 14(a) and 20 of the Exchange Act, Sections 11, 12 and 15 of the Securities Act of 1933 and New Jersey common law. The suit alleges that UJB's reserves for loan losses were inadequate, resulting in inaccurate financial
statements, and that the defendants made misleading positive statements about UJB's financial condition and failed to disclose negative information about UJB's lending policies, operations and finances, thus artificially inflating UJB's earnings and the prices of UJB's securities. The suit further alleges that UJB's internal credit review and controls were inadequate.
In addition, plaintiffs assert that the 1990 Proxy Statement was false and misleading because it did not disclose that defendants had engaged in the conduct described in the preceding paragraph or that entrenchment allegedly was defendants' true motive behind the adoption of a shareholder rights plan and a provision amending UJB's certificate of incorporation to require 80% approval by the shareholders to increase the authorized number of directors (and 80% approval to amend or repeal any provision of the proposed amendments). The plaintiffs demand judgment including unspecified money damages, a declaration that all action taken at the 1990 Annual Meeting is null and void, a declaration that the shareholder rights plan is void, and attorneys' fees.
Discovery and determination of class issues were stayed by District Court order. UJB and the defendant directors and officers moved to dismiss the complaint and each claim for relief on various grounds, including, among others: failure to state a claim; failure to plead with particularity; and failure to make the required demand. The District Court granted the motion in part and allowed plaintiffs thirty days to replead or amend their complaint with respect to other alleged wrongdoing. The plaintiffs determined not to replead or amend and appealed the District Court ruling to the U.S. Circuit Court of Appeals. Plaintiffs did not appeal dismissal of the derivative claims and voluntarily withdrew, with prejudice, the claim challenging UJB's 1990 Proxy Statement. On May 22, 1992 the Court of Appeals reversed in part the District Court's decision insofar as it dismissed certain claims in the complaint and remanded same to the District Court for further proceedings, including repleading by the plaintiffs. By orders dated July 7, 1992, the Court of Appeals denied the defendants' petition for rehearing en banc but stayed entry of its mandate until August 13, 1992 to permit defendants to seek review by the United States Supreme Court. All proceedings in the District Court were stayed pending entry of the mandate; the mandate issued upon denial of review by the Supreme Court. On October 13, 1992, the Supreme Court declined to accept the case for review. On March 22, 1993, the Plaintiffs served the Second Consolidated Amended Class Action Complaint which contained substantially the same claims (except for those that had been dismissed) as set forth in the prior Amended Complaint. UJB and the defendant directors and officers then moved to dismiss the Second Consolidated Amended Class Action Complaint and each claim for relief contained therein on various grounds. On September 13, 1993, the District Court denied the defendants' motion to dismiss the plaintiffs' claims under the Securities Exchange Act of 1934 and New Jersey common law and reserved decision on the motion with regard to plaintiffs' claims under the Securities Act of 1933. The plaintiffs subsequently stipulated to the dismissal with prejudice of their claims under the Securities Act of 1933 on October 14, 1993. The defendants filed a motion requesting certification of an appeal from the District Court order to the United States Court of Appeals for the Third Circuit pursuant to 12 U.S.C. 1292(b) on October 29, 1993. The defendants also filed an Answer denying the allegations of the Second Consolidated Amended Class Action Complaint on October 28, 1993. The District Court by order dated December 3, 1993 denied the defendants' motion requesting certification of an appeal. Discovery commenced in January 1994. On April 21, 1994 the court entered another consent order dismissing without prejudice all claims against the defendant Clifford H. Coyman (the former president and CEO of United Jersey Bank) and dismissing with prejudice all claims against the outside director defendants (Robert L. Boyle, Elinor J. Ferdon, Walter L. Dealtry, Fred G. Harvey, Francis J. Mertz, Henry S. Patterson II, James A. Skidmore, Jr. and Joseph M. Tabak.) On the same day, the court entered a consent order conditionally certifying the matter to proceed as a class action pursuant to Rule 23 of the Federal Rules of Civil Procedure with respect to Counts I, II, and VI of the Complaint, on behalf of a plaintiff class consisting of all persons who purchased UJB's common stock during the period beginning February 1, 1988 through and including July 18, 1990, and who allegedly sustained damages thereby. On December 30, 1994, the parties agreed to settle the action for $3.65 million, subject to, among other things, notice to the class and final approval by the Court. The Court approved the settlement on March 29, 1995. A portion of this settlement will be paid by UJB's insurance carrier and the remaining balance has been fully reserved. Therefore, the effect of this settlement will have no significant impact on the financial operating results of the Company. The Company has agreed to the settlement in light of a number of considerations including the avoidance of
continuing costs of the litigation and the burden and disruption to the Company, its directors, management and employees caused by the continued defense of the litigation. As permitted by New Jersey law, the expenses of the individual defendants are being advanced by UJB.
OTHER LITIGATION
1. McAdoo CERCLA Matter. First Valley Bank ("FVB") foreclosed on property in McAdoo, Pennsylvania, taking title by a sheriff's deed in 1980. The property was later designated by the United States Environmental Protection Agency ("EPA") as a part of a site (the "McAdoo Site") listed on the National Priorities List of sites to be remediated pursuant to the federal Comprehensive Environmental Response Compensation and Liability Act ("CERCLA").
On June 3, 1988, the United States District Court for the Eastern District of Pennsylvania entered a Consent Decree in United States v. Air Products and Chemicals, Inc., Civil Action No. 87-7352 (the "Air Products litigation"), in which sixty-five potentially responsible parties ("PRPs"), not including FVB, agreed to undertake remediation of the McAdoo Site and the United States agreed to pay 25% of the settling PRPs (the "Initial PRPs") cost of remediation.
On June 11, 1988, after having made a demand upon FVB and a number of other non-settling PRPs, the United States sued a number of the PRPs other than FVB who did not enter into the Consent Decree in a matter entitled United States of America v. Alcan Aluminum et al, United States District Court, Eastern District of Pennsylvania, Civil Action No. 88-4970 (the "Alcan litigation"). Although the United States did not sue FVB, on April 16, 1990, one defendant in the Alcan Litigation, Kalama Chemical, Inc., filed a motion for leave to file a third party complaint against FVB seeking contribution. The motion was denied without prejudice.
FVB then participated in settlement discussions in the Alcan litigation. Pursuant to those negotiations, FVB and certain defendants, third-party defendants and other potential third-party defendants deposited, in a Court registry, a sum which the United States agreed will satisfy all of its claims against FVB. The parties also executed a Consent Decree which was approved by the District Court by Order dated June 24, 1993. The Consent Decree gives FVB a broad covenant not to sue and contribution protection to the extent available under 42 U.S.C. sec. 9622(d)(2). The Consent Decree was the subject of public notice and comment, pursuant to 42 U.S.C. sec. 9622(d)(2). The Initial PRPs submitted comments to the United States objecting to the Consent Decree, including inter alia, the broad release provided to FVB. The Initial PRPs also filed a motion to intervene in the Alcan litigation, which was denied by the District Court. The Initial PRPs then appealed that denial to the United States Court of Appeals for the Third Circuit in a matter captioned United States v. Alcan Aluminum, Inc., et al., Action No. 93-1099 (3rd Cir.). On May 25, 1994, the Third Circuit vacated the District Court's orders denying the motion to intervene and approving the Consent Decree, holding that the Initial PRPs may intervene as a matter of right in the Alcan litigation if they can prove that they have a protectable interest in that litigation. Consequently, the case was remanded to the District Court to determine whether the Initial PRPs have a protectable interest in the Alcan litigation.
As a result of settlement negotiations, the parties have reached an agreement in principle for the settlement of the case. In light of this agreement in principle, the Court has suspended all proceedings in the case.
2. In re Payroll Express Corporation of New York and Payroll Express Corporation, United States Bankruptcy Court for the Southern District of New York, Case Nos. 92-B-43149 (CB) and 92-B-43150 (CB).
United Jersey Bank (the "Bank") is involved in six Chapter 11 cases venued in the United States Bankruptcy Court for the Southern District of New York (the "Bankruptcy Cases") involving a former customer of the Bank, Payroll Express Corp. ("Payroll"), and several related entities. Payroll was primarily in the business of providing on-site check cashing services.
Customers of Payroll deposited funds into a general deposit account ("Account") at the Bank to cover their payrolls. The Account was given credit for deposits received by Payroll and cash was obtained by debiting the Account.
Payroll perpetrated a substantial check kiting scheme using the Account and another account at National Westminster Bank, NJ ("NatWest"). NatWest apparently discovered this scheme in late May of 1992. Due to this discovery, NatWest ceased honoring checks drawn by Payroll on its account. UJB was ultimately left with a loss of approximately $4 million in the Account.
On June 5, 1992, Robert Felzenberg, the President of Payroll, was charged in a Federal court located in Manhattan with embezzlement and wire fraud. He has pled guilty to among other things, wire and tax fraud, and was sentenced to 6 1/2 years imprisonment in March 1994.
A trustee (the "Trustee") has been appointed by the Bankruptcy Court, and he is currently conducting an investigation of Payroll. The Trustee has also retained special counsel to pursue potential claims against the fidelity insurers of Payroll Express Corp. and possibly Payroll's insurance agent. Several parties concerned with the Bankruptcy Cases have undertaken an extensive discovery pursuant to a Discovery Order under Bankruptcy Rule 2004.
Payroll customers deposited a total of $11.8 million into the Account during this period of time. A number of these customers have asserted claims against the Bank, although only three lawsuits by seventeen customers are currently pending: Beth Israel Medical Center, et al. v. United Jersey Bank and National Westminster Bank New Jersey, United States District Court for the Southern District of New York, Civil Action No. 94-8256 (LAP), Frederick Goldman, Inc. v. United Jersey Bank and National Westminster Bank New Jersey, United States District Court for the Southern District of New York, Civil Action No. 94-8256 (LAP) and Towers Financial Corporation v. United Jersey Bank, United States District Court for the District of New Jersey, Civil Action No. 92-3175 (WGB). The lawsuits allege various common law causes of action against the Bank, including unjust enrichment, restitution, conversion, fraud, negligence and/or breach of fiduciary duty. The Beth Israel and Frederick Goldman matters have been consolidated and the Bank has filed a motion to dismiss the complaints for failure to state a claim upon which relief can be granted. The motion is pending. Towers Financial has filed for protection under the bankruptcy laws and this case has been inactive for some time.
The Trustee appointed in the Bankruptcy Cases described above filed two adversary proceedings against the Bank. The first, captioned John E. Pereira, as Chapter 11 Trustee of the Estate of Payroll Express Corporation et al. v. United Jersey Bank, was originally filed in the United States Bankruptcy Court for the Southern District of New York. The adversary complaint alleges the Account received incoming wire transfers of at least $17,013,537.54 within the 90 days prior to the filing of bankruptcy by Payroll. These incoming wire transfers were allegedly used by the Bank to reduce its losses on the check kiting scheme. The Trustee claims that the amounts of the wire transfers are recoverable by the Trustee as avoidable preferences under the Bankruptcy Code. The Bank successfully moved to withdraw the reference of this matter to the United States District Court for the Southern District of New York where it is currently pending under Civil Action No. 94-1565 (LAP). The Bank has filed a motion for summary judgment in this matter. The motion is pending.
The second adversary complaint, captioned John E. Pereira, as Chapter 11 Trustee of the Estate of Payroll Express Corporation et al. v. United Jersey Bank, United States Bankruptcy Court for the Southern District of New York, Adversary Proceeding No. 94-8297A, alleges that the mortgages given to UJB on property owned by the various Felzenberg-controlled entities, together with certain loan payments made by Payroll to UJB, were fraudulent conveyances. The properties in question have all been sold. The Trustee also seeks the return of $310,000.00 in principal and $152,487.50 in interest payments made by Payroll on its loan in the year prior to the bankruptcy. The Trustee claims that these transfers are recoverable under section 548 of the Bankruptcy Code, as well as under the New Jersey Uniform Fraudulent Transfer Act. The Bank has filed an answer denying the material allegations of the complaint and the parties are currently conducting discovery.
ITEM 4.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
EXECUTIVE OFFICERS OF THE REGISTRANT.
The following data is supplied as of March 9, 1995:
The term of each of the above officers is until the next organization meeting of the Board of Directors, which occurs immediately following the annual meeting of shareholders, and until a successor is appointed by the Board of Directors. Each officer may be removed at any time by the Board of Directors without cause. Management of UJB is not aware of any family relationship between any director or executive officer or person nominated or chosen to become a director or executive officer.
PART II
ITEM 5.

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
This item has been omitted pursuant to paragraph (2) of General Instruction "G" -- Information to be Incorporated by Reference. See the Shareholders' Equity and Dividends section in the Financial Review on pages 34 and 35, Notes 12 and 13 to the Consolidated Financial Statements on pages 48 and 49 and Unaudited Quarterly Financial Data on page 56 of the 1994 Annual Report incorporated herein by reference as Exhibit 13. At February 28, 1995 there were 20,168 record holders of UJB Common Stock.
ITEM 6.

ITEM 6. SELECTED FINANCIAL DATA.
This item is omitted pursuant to paragraph (2) of General Instruction "G" -- Information to be Incorporated by Reference. See Summary of Selected Financial Data on pages 38 and 39 of the 1994 Annual Report incorporated herein by reference as Exhibit 13. Included in non-interest income for the years 1994 through 1991 were investment securities gains of $1.9 million, $8.9 million, $18.5 million and $13.9 million respectively and investment securities losses of $.6 million in 1990.
ITEM 7.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
This item is omitted pursuant to paragraph (2) of General Instruction "G" -- Information to be Incorporated by Reference. See Financial Review on pages 25 through 37 of the 1994 Annual Report incorporated herein by reference as Exhibit 13. Reference is made to page 10 of this report for a discussion of the effects of inflation.
ITEM 8.


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
This item is omitted pursuant to paragraph (2) of General Instruction "G" -- Information to be Incorporated by Reference.
See Consolidated Financial Statements and Notes to Consolidated Financial Statements on pages 40 through 54 of the 1994 Annual Report incorporated herein by reference as Exhibit 13.
ITEM 9.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10.



ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
This item is omitted pursuant to paragraph (3) of General Instruction "G" -- Information to be Incorporated by Reference, except that certain information on Executive Officers of the Registrant is included in Part I of this report and herein as follows: At December 31, 1994 loans to officers and directors of the Company and its subsidiaries and to their associates amounted to $86.0 million compared to $1.1 billion of shareholders' equity. A definitive proxy statement, dated March 9, 1995 (the "Proxy Statement"), was filed with the Securities and Exchange Commission. Information required by Item 401 of Regulation S-K is provided at page 25 of this Annual Report on Form 10-K and at pages 2-5 of the Proxy Statement under the caption "Election of Directors", which is hereby incorporated herein by reference. Information required by Item 405 of Regulation S-K is provided at page 16 of the Proxy Statement in the material appearing under the caption "Additional Information Regarding Directors and Officers" and is hereby incorporated herein by reference.
ITEM 11.

ITEM 11. EXECUTIVE COMPENSATION.
This item is omitted pursuant to paragraph (3) of General Instruction "G" -- Information to be Incorporated by Reference. Information required by Item 402 of Regulation S-K is provided at page 9 of the Proxy Statement under the caption "Corporate Governance of UJB -- Remuneration of Outside Directors", at pages 9-15 of the Proxy Statement under the caption "Compensation Committee Report on Executive Compensation", at pages 11 and 13 of the Proxy Statement under the captions "Summary Compensation Table", "Options/SAR Grants in Last Fiscal Year" and "Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-End Option/SAR Values", at page 15 of the Proxy Statement under the caption "Stock Performance Graph" and at pages 16-19 of the Proxy Statement under the caption "Certain Information As To Executive Officers", all of which information is hereby incorporated herein by reference.
ITEM 12.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
This item has been omitted pursuant to paragraph (3) of General Instruction "G" -- "Information to be Incorporated by Reference". Information required by Item 403 of Regulation S-K is provided at page 1 of the Proxy Statement in the introductory information to the Proxy Statement and at pages 6-7 of the Proxy Statement under the caption "Beneficial Ownership of UJB Equity Securities by Directors and Executive Officers", all of which is hereby incorporated herein by reference.
ITEM 13.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
This item is omitted pursuant to paragraph (3) of Instruction "G" -- "Information to be Incorporated by Reference". Information required by Item 404 of Regulation S-K is provided at page 16 of the Proxy Statement in the material appearing under the caption "Additional Information Regarding Directors and Officers", which is hereby incorporated herein by reference.
PART IV
ITEM 14.

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
a)(1) Financial statements, UJB Financial Corp. and Subsidiaries:
Financial statement schedules are omitted as the required information is not applicable or the information is presented in the financial statements or related notes thereto.
(3) Other Exhibits (all references to Forms 8-K, 10-K and 10-Q refer to Securities and Exchange Commission File No. 1-6451. Other Exhibits are numbered in accordance with Item 601 of Regulation S-K):
(2) Plan of acquisition, reorganization, arrangement, liquidation or succession.
A. Agreement and Plan of Merger, dated January 19, 1995, between UJB Financial Corp. and Bancorp New Jersey, Inc. (incorporated by reference without exhibits to Exhibit 2 to Registration Statement No. 33-58111 on Form S-4, filed March 15, 1995).
(3) Articles of incorporation; By-laws.
A. Restated Certificate of Incorporation of UJB Financial Corp., as restated July 1, 1988, as amended through May 19, 1994 (incorporated by reference to Exhibit (3)A.(i) on Form 10-Q for the quarter ended June 30, 1994).
B. By-Laws of UJB Financial Corp. as amended through October 19, 1994 (incorporated by reference to Exhibit (3)B.(i) on Form 10-Q for the quarter ended September 30, 1994).
(4) Instruments defining the rights of security holders, including indentures.
A. Rights Agreement, dated as of August 16, 1989, by and between UJB Financial Corp. and First Chicago Trust Company of New York, as Rights Agent (incorporated by reference to Exhibit 2 to the Registration Statement on Form 8-A, filed August 28, 1989).
B. Indenture, dated as of November 1, 1972, between UJB Financial Corp. (under former name of United Jersey Banks) and The Bank of New York, as Trustee, for $20,000,000 of 7 3/4% Sinking Fund Debentures due November 1, 1997 (incorporated by reference to Exhibit 4(a) to Amendment No. 2 to Registration Statement No. 2-45397 on Form S-1, filed October 25, 1972).
C. Purchase Agreement, dated October 25, 1972, between UJB Financial Corp. (under former name of United Jersey Banks) and Merrill Lynch, Pierce, Fenner & Smith Incorporated and Salomon Brothers, for 7 3/4% Sinking Fund Debentures (incorporated by reference to Exhibit 1(b) to Amendment No. 2 to Registration Statement No. 2-45397 on Form S-1, filed October 25, 1972).
D. Note Agreement, dated as of August 19, 1993, between UJB Financial Corp. and The Northwestern Mutual Life Insurance Company relating to $20,000,000 of
---------------
*Refers to the respective page numbers of UJB Financial Corp. 1994 Annual Report to Shareholders included as Exhibit 13. Such pages are incorporated herein by reference.
7.95% Senior Notes Due August 25, 2003 (incorporated by reference to Exhibit (4)D. on Form 10-Q for the quarter ended September 30, 1993).
E. (deleted)
F. (deleted)
G. (i) Subordinated Indenture, dated as of December 1, 1992, between UJB Financial Corp. and Citibank, N.A., Trustee, relating to $175,000,000 of 8 5/8% Subordinated Notes Due December 10, 2002 of UJB Financial Corp. (incorporated by reference to Exhibit (4)G. on Form 10-K for the year ended December 31, 1992), and (ii) Specimen of UJB Financial Corp.'s 8 5/8% Subordinated Notes Due December 10, 2002 (incorporated by reference to Exhibit 4 on Form 8-K, dated December 10, 1992).
(10) Material Contracts
A. (i) Asset Purchase Agreement, dated as of March 1, 1995, among United Jersey Bank and certain subsidiaries of United Jersey Bank, as Sellers, and ANJ Portfolio, LLC, as Purchaser, and (ii) Amendment, dated March 27, 1995, to the Asset Purchase Agreement.
B. (i) Master Agreement of Lease, dated January 26, 1982, between United Jersey Banks (former name of UJB Financial Corp.) and Sha-Li Leasing Associates, Inc. relating to equipment leases in excess of $10,000,000 in aggregate lease obligations, including form of Equipment Schedule (incorporated by referenced to Exhibit (10)B.(i) on Form 10-Q for the quarter ended September 30, 1993), (ii) Assignment and Assumption of Equipment Lease, effective December 31, 1991, between UJB Financial Corp. and UJB Financial Service Corporation (relating to assignment of Master Agreement of Lease) (incorporated by reference to Exhibit (10)B.(ii) on Form 10-Q for the quarter ended September 30, 1993), and (iii) Form of Guaranty Agreement between UJB Financial Corp. and various lenders under the Master Agreement of Lease relating to certain equipment leases in excess of $10,000,000 in aggregate lease obligations (incorporated by reference to Exhibit (10)B.(iii) on Form 10-Q for the quarter ended September 30, 1993).
*C. (i) UJB Financial Corp. 1993 Incentive Stock and Option Plan (incorporated by reference to Exhibit 10(C) to Registration Statement No. 33-62972 on Form S-8, filed May 19, 1993), (ii) Compensation Committee Regulations for the Grant and Exercise of Stock Options and Restricted Stock (adopted July 19, 1993) (incorporated by reference to Exhibit (10)C.(ii) on Form 10-Q for the quarter ended June 30, 1993), and (iii) Compensation Committee Interpretation of Section 5(e)(ii)(F) (incorporated by reference to Exhibit (10)C. (iii) on Form 10-Q for the quarter ended March 31, 1994).
*D. (i) UJB Financial Corp. 1990 Stock Option Plan (incorporated by reference to Exhibit (10)D. on Form 10-Q for the quarter ended June 30, 1990), and (ii) Compensation Committee Regulations for the Grant and Exercise of Stock Options and Restricted Stock (adopted July 19, 1993) (incorporated by reference to Exhibit (10)C.(ii) on Form 10-Q for the Quarter ended June 30, 1993).
*E. (i) UJB Financial Corp. 1989 Long-Term Performance Stock Plan (incorporated by reference to Exhibit (10)E. on Form 10-K for the year ended December 31, 1990), and (ii) Compensation Committee Regulations for the Grant and Exercise of Stock Options and Restricted Stock (adopted July 19, 1993) (incorporated by reference to Exhibit (10)C.(ii) on Form 10-Q for the Quarter ended June 30, 1993).
*F. Description of Incentive Plan approved January 20, 1982.
--------------- * Management contract or compensatory plan or arrangement.
G. (i) Deferred Compensation Plan for Directors, as revised October 17, 1979, and (ii) Amendment adopted April 25, 1994.
*H. (i) Agreement dated April 2, 1981 between UJB Financial Corp. (under former name of United Jersey Banks) and T. Joseph Semrod, with (ii) Amendment No. 1 dated May 5, 1981, (iii) Amendment No. 2 dated December 15, 1982, and (iv) Amendment No. 3 dated August 20, 1986.
I. (deleted)
J. (deleted)
K. (i) Guaranty Agreement, dated August 7, 1991, by and between UJB Financial Corp. and Security Pacific National Bank, as Trustee (incorporated by reference to Exhibit (10)K.(i) on Form 10-Q for the quarter ended June 30, 1991), (ii) Warranty Bill of Sale, dated August 7, 1991, of Trico Mortgage Company (incorporated by reference to Exhibit (10)K.(ii) on Form 10-Q for the quarter ended June 30, 1991), and (iii) Pooling and Servicing Agreement, dated as of June 30, 1991, by and among Trico Mortgage Company, Inc., Securitization Subsidiary I, Inc. and Security Pacific National Bank, as Trustee (incorporated by reference to Exhibit (10)K.(iii) on Form 10-Q for the quarter ended June 30, 1991).
*L. (i) United Jersey Banks (former name of UJB Financial Corp.) 1982 Stock Option Plan (incorporated by reference to Exhibit 4 to Registration Statement No. 2-78500 on Form S-8, filed July 21, 1982) with (ii) Amendment No. 1, dated June 16, 1984, (iii) Amendment No. 2, dated December 19, 1990 (incorporated by reference to Exhibit (10)L.(iii) on Form 10-K for the year ended December 31, 1990), and (iv) Compensation Committee Regulations for the Grant and Exercise of Stock Options and Restricted Stock (adopted July 19, 1993) (incorporated by reference to Exhibit (10)C.(ii) on Form 10-Q for the Quarter ended June 30, 1993). .
*M. (i) Retirement Restoration Plan, adopted April 19, 1983, (ii) Supplemental Retirement Plan, adopted August 16, 1989, (iii) Written Consent of UJB Financial Corp. Benefits Committee interpreting the Retirement Restoration Plan, adopted August 30, 1989, and (iv) Amendments to the Retirement Restoration Plan and Supplemental Retirement Plan adopted April 25, 1994.
N. (i) Equipment Lease Guaranty dated as of August 31, 1992 by UJB Financial Corp. to Sanwa General Equipment Leasing, Inc. (incorporated by reference to Exhibit (10)N.(i) on Form 10-Q for the quarter ended March 31, 1993), and (ii) Equipment Lease Agreement dated as of August 31, 1992 and Equipment Schedule Nos. A-1 and A-2 dated as of August 31, 1992 between Sanwa General Equipment Leasing, Inc. and UJB Financial Service Corporation, United Jersey Bank, United Jersey Bank/Central, N.A. and United Jersey Bank/South, N.A., pursuant to Equipment Lease Agreement dated as of August 31, 1992, for five year lease of furniture, fixtures and equipment (incorporated by reference to Exhibit (10)N.(ii) on Form 10-Q for the quarter ended March 31, 1993).
O. (i) Equipment Lease Guaranty dated as of August 31, 1992 by UJB Financial Corp. to MetLife Capital Corporation (incorporated by reference to Exhibit (10)O.(i) on Form 10-Q for the quarter ended March 31, 1993), and (ii) Equipment Schedule Nos. B-1 and B-2 dated as of August 31, 1992 between MetLife Capital Corporation and UJB Financial Service Corporation, United Jersey Bank, United Jersey Bank/Central, N.A. and United Jersey Bank/South, N.A. pursuant to Equipment
---------------
* Management contract or compensatory plan or arrangement.
Lease Agreement dated as of August 31, 1992 between Sanwa General Equipment Leasing, Inc. and United Jersey Bank, United Jersey Bank/Central, N.A. and United Jersey Bank/South, N.A., for five year lease of furniture, fixtures and equipment (incorporated by reference to Exhibit (10)O.(ii) on Form 10-Q for the quarter ended March 31, 1993).
P. Twenty-year real estate lease executed and dated December 12, 1988 from Hartz Mountain Industries, Inc. for real property located in Ridgefield Park, New Jersey and improvements to be constructed by Hartz thereon for use as new data processing facility for the company (incorporated by reference to Exhibit (10)P. on Form 10-K for the year ended December 31, 1993).
Q. (deleted)
R. (deleted)
S. (deleted)
T. (deleted)
U. (deleted)
V. (deleted)
W. (i) Retirement Plan for Outside Directors of UJB Financial Corp., as amended and restated February 20, 1990 (incorporated by reference to Exhibit (10)W. on Form 10-K for the year ended December 31, 1990), (ii) Interpretation, dated March 15, 1993, of the Retirement Plan for Outside Directors of UJB Financial Corp. (incorporated by reference to Exhibit (10)W.(ii) on Form 10-K for the year ended December 31, 1992), and (iii) Amendment adopted April 25, 1994.
X. (deleted)
Y. (deleted)
Z. Stock Option Agreement, dated December 16, 1993, issued by VSB Bancorp, Inc. to UJB Financial Corp. (incorporated by reference to Exhibit (10)Z. on Form 8-K, dated December 15, 1993).
AA. (deleted)
BB. (deleted)
CC. (deleted)
DD. (deleted)
*EE. (i) Form of Termination Agreement between UJB Financial Corp. and each of T. Joseph Semrod, John G. Collins, John R. Howell, John R. Haggerty, Stephen H. Paneyko, Larry L. Betsinger, Alfred M. D'Augusta, William J. Healy, James J. Holzinger, William F. Flyge, Sabry J. Mackoul, John J. O'Gorman, Richard F. Ober, Jr., Dennis Porterfield, Alan N. Posencheg, Gary F. Simmerman and Edmund C. Weiss, Jr. (incorporated by reference to Exhibit (10)EE.(i) on Form 10-K for the year ended December 31, 1991) with (ii) Amendment No. 1, dated December 20, 1989 (incorporated by reference to Exhibit (10)EE.(ii) on Form 10-K for the year ended December 31, 1991), (iii) Amendment No. 2, dated October 16, 1991 (incorporated by reference to Exhibit (10)EE.(iii) on Form 10-K for the year ended December 31, 1991), and (iv) Amendment No. 3, dated December 16, 1992 (incorporated by reference to Exhibit (10)EE.(iv) on Form 8-K, dated January 19, 1993).
---------------
* Management contract or compensatory plan or arrangement.
*FF. (i) UJB Financial Corp. Executive Severance Plan, as amended through December 16, 1992 (incorporated by reference to Exhibit (10)FF. on Form 8-K, dated January 19, 1993), and (ii) Amendment adopted April 25, 1994.
GG. (deleted)
HH. Retirement Program for Outside Directors of Franklin State Bank (incorporated by reference to Exhibit (10)HH. on Form 10-K for the year ended December 31, 1991).
II. Franklin State Bank Deferred Compensation Plan adopted January 10, 1984 (incorporated by reference to Exhibit (10)II. on Form 10-K for the year ended December 31, 1991).
JJ. (i) Retirement Plan for Outside Directors of Commercial Bancshares, Inc. adopted May 1, 1986 (incorporated by reference to Exhibit (10)JJ. on Form 10-K for the year ended December 31, 1991), and (ii) Compensation Committee Interpretation, dated July 19, 1993 (incorporated by reference to Exhibit (10)JJ.(ii) on Form 10-Q for the quarter ended June 30, 1993).
KK. (i) Commercial Bancshares, Inc. Directors Deferred Compensation Plan adopted May 20, 1986 (substantially identical plans were adopted by former subsidiaries of Commercial Bancshares, Inc.) (incorporated by reference to Exhibit (10)KK.(i) on Form 10-K for the year ended December 31, 1991) and (ii) related Master Trust Agreement (incorporated by reference to Exhibit (10)KK.(ii) on Form 10-K for the year ended December 31, 1991).
*LL. (i) United Jersey Banks (former name of UJB Financial Corp.) 1987 Stock Option Plan (incorporated by reference to Exhibit (10)LL.(i) on Form 10-K for the year ended December 31, 1991) with (ii) Amendment dated April 25, 1989, (iii) amendment dated June 30, 1990 (incorporated by reference to Exhibit (10)LL.(ii) on Form 10-Q for the quarter ended June 30, 1990), and (iv) Compensation Committee Regulations for the Grant and Exercise of Stock Options and Restricted Stock (adopted July 19, 1993) (incorporated by reference to Exhibit (10)C.(ii) on Form 10-Q for the Quarter ended June 30, 1993).
MM. (deleted)
*NN. First Valley Bank Executive Management Incentive Bonus Plan (incorporated by reference to Exhibit (10)NN. on Form 10-K for the year ended December 31, 1992).
(13) UJB Financial Corp. 1994 Annual Report to Shareholders
(21) Subsidiaries of the registrant.
(23) Consents of Experts and Counsel
A. Independent Auditors' Consent -- KPMG Peat Marwick LLP
(27) Financial Data Schedule --------------- * Management contract or compensatory plan or arrangement.
None of the Exhibits listed above other than the UJB Financial Corp. 1994 Annual Report to Shareholders are furnished herewith (other than certain copies filed with the Securities and Exchange Commission). Any of such Exhibits will be furnished to any requesting securityholder upon payment of a fee of 15 cents per page. Contact Lori A. Wierzbinsky, Assistant Corporate Secretary, UJB Financial Corp., P.O. Box 2066, Princeton, NJ 08543-2066 for a determination of the fee necessary to fulfill any request.
b) Reports on Form 8-K.
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
UJB FINANCIAL CORP.
Dated: March 28, 1995 By: /s/ J. R. HAGGERTY ------------------------------------ John R. Haggerty Senior Executive Vice President/Finance
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
EXHIBIT INDEX