EX-99.2 5 y94816exv99w2.txt CURRENT REPORT ON FORM 8-K FEDERAL DEPOSIT INSURANCE CORPORATION WASHINGTON, D.C. 20429-9990 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): JANUARY 28, 2004 THE TRUST COMPANY OF NEW JERSEY (Exact Name of Registrant as Specified in Charter) NEW JERSEY 12525 22-1337980 (State or Other (FDIC Insurance (IRS Employer Jurisdiction of Certificate Number) Identification No.) Incorporation) 35 JOURNAL SQUARE, JERSEY CITY, NEW JERSEY 07306 -------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (201) 420-2500 ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (c) Exhibits As described in Item 12 of this Report, the following Exhibit is furnished as part of this Current Report on Form 8-K: 99.1 Press Release of The Trust Company of New Jersey dated January 28, 2004. ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On January 28, 2004, The Trust Company of New Jersey (the "Company") issued a press release regarding results for the three months and year ended December 31, 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 as of, and for the three months and year ended, December 31, 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. SIGNATURE 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 hereunto duly authorized. THE TRUST COMPANY OF NEW JERSEY By: /S/ WILLIAM S. BURNS ------------------------------------- Name: William S. Burns Title:Executive Vice President and Chief Financial Officer Date: January 28, 2004 EXHIBIT INDEX 99.1 Press Release of The Trust Company of New Jersey dated January 28, 2004. Exhibit 99.2 CONTACT: WILLIAM S. BURNS EXECUTIVE VICE PRESIDENT & CFO THE TRUST COMPANY OF NEW JERSEY (201) 420-4946 FOR IMMEDIATE RELEASE THE TRUST COMPANY OF NEW JERSEY REPORTS FINANCIAL RESULTS FOR THE FULL YEAR AND FOURTH QUARTER OF 2003, THE PLANNED CLOSING OF 20 IN-STORE BRANCHES AND PROGRESS TOWARD MERGER WITH NORTH FORK BANCORPORATION; DECLARES $0.18 PER SHARE QUARTERLY DIVIDEND JERSEY CITY, N.J., JANUARY 28, 2004 - THE TRUST COMPANY OF NEW JERSEY (THE "COMPANY" OR "TRUSTCOMPANY") (NASDAQ: TCNJ ) today reported net income for the year ended December 31, 2003 of $21.0 million, or $1.11 per diluted share, compared with $38.0 million, or $2.03 per diluted share, for 2002. For the fourth quarter of 2003, Trustcompany experienced a net loss of $1.6 million, or $0.09 per diluted share, compared to net income of $10.0 million, or $0.53 per diluted share, for the third quarter 2003 and $7.5 million, or $0.40 per diluted share, for the fourth quarter of 2002. The loss in the fourth quarter 2003 arose principally from charges incurred in connection with the pending merger with North Fork Bancorporation ("North Fork"). The Company also announced today that its Board of Directors has declared a cash dividend on its common stock of $0.18 per share. The dividend is payable on March 1, 2004 to shareholders of record on February 13, 2004. During the fourth quarter 2003 the Company completed the previously announced closing of 9 in-store branches, recognizing a pretax charge of $0.8 million. The Company also plans to close an additional 20 in-store branches, continuing a strategy of closing underperforming locations. These closings are expected to occur no later than May 2004, prior to the anticipated closing of the merger with North Fork. It is estimated that a pretax charge of $7.0 million will be recognized in the second quarter 2004. Consistent with its previous experience, the Company believes that it will retain a major portion of the deposits and customer relationships of these branches. Trustcompany estimates that the 29 in-store closings will contribute $4.0 million in pretax earnings on an annual basis. Alan J. Wilzig, Chairman and CEO of Trustcompany, commented, "Core operations for the recent quarter continued to exhibit strength. Revenue growth remained robust, reflecting a net interest margin that widened by 24 basis points, increased service charges and fees, and an improved business mix." With respect to North Fork, Mr. Wilzig noted, "Our pending merger, announced in December, remains on track for a second quarter closing." The Company reported that bank regulatory applications have been filed and a shareholder meeting seeking approval of the merger is currently expected to take place in April. Net interest income for the fourth quarter 2003 increased by 9.9% to $33.2 million from $30.2 million in the third quarter 2003, and increased 4.7% from $31.8 million in the fourth quarter 2002. The net interest margin for the current quarter was 3.55%, representing a 24 basis point increase from the 3.31% achieved in the third quarter 2003, and a 17 basis point improvement from the fourth quarter 2002. Fourth quarter 2003 net interest margin was positively impacted by an increase in lower cost core deposits, loan growth, a lower level of bond premium amortization and previously announced debt restructurings. Average interest earning assets were $3,958 million in the fourth quarter 2003, $3,879 million in the third quarter 2003 and $4,014 million in the fourth quarter 2002. Average lower cost core deposits amounted to $1,883 million in the fourth quarter 2003, an increase of $22 million over the linked quarter and an increase of $69 million over fourth quarter 2002. Gains from the sale of securitizations and loans amounted to $0.9 million in the fourth quarter 2003 compared to gains of $2.0 million in the third quarter 2003 and $28,000 in the fourth quarter 2002. During the fourth quarter 2003, the Company recorded mortgage servicing rights valuation allowance expense of $1.1 million due to declines in market pricing at year-end 2003 that were not necessarily consistent with the recent trend toward decreased refinancing activity. The Company largely offset this fourth quarter expense by selling mortgage-backed securities resulting in a $0.9 million gain. The mortgage servicing rights valuation allowance adjustment was income of $1.4 million during the third quarter 2003 and expense of $1.4 million in the fourth quarter 2002. Non-interest income, excluding gains from the sale of securitizations, loans and mortgage-backed securities was $6.5 million for fourth quarter 2003 compared to $6.3 million for the third quarter 2003 and $5.9 million for the fourth quarter 2002. The increase versus prior periods was principally attributable to increased trust fees and insurance commissions. Non-interest expense, excluding the mortgage servicing asset valuation adjustment was $32.5 million in the fourth quarter 2003 compared to $25.3 million in the third quarter 2003 and $27.5 million in the fourth quarter 2002. The increase in fourth quarter 2003 non-interest expense was due to merger-related charges of $7.2 million and aggregate costs of $2.3 million associated with branch closing expenses; increases in employee benefit plan expenses; the costs related to Trustcompany's now abandoned plans to form a holding company, issue trust preferred securities and restructure its retirement plans; and special legal and consulting fees. These higher expenses were partially offset by pension income and net gains on OREO. In addition, third quarter 2003 included a $3.3 million charge for the early extinguishment of certain FHLB borrowings. In connection with its merger agreement with North Fork, Trustcompany committed to sell certain commercial real estate loans to one borrower totaling $29.2 million (including unfunded commitments of $0.9 million). The borrower has recently exhibited a deteriorating financial condition but remains current as to principal and interest. If the Company is unable to sell the loans by the closing date, certain principal shareholders of the Company, including Alan J. Wilzig, have agreed, at North Fork's request, to purchase the loans for $20 million. Accordingly, during the quarter the Company recognized a charge of $9.2 million and reclassified the remaining balance of the loans to the held-for-sale category. Total net loan charge-offs (excluding the $9.2 million write-down mentioned above) for the fourth quarter 2003 were $1.2 million versus $0.8 million in the third quarter 2003 and $1.1 million in the fourth quarter 2002. The annualized charge-off ratios, excluding the above-mentioned loans, were 0.22% for the fourth quarter 2003, 0.16% for the third quarter 2003, and 0.23% for the fourth quarter 2002. OREO decreased 9.8% to $3.3 million as of December 31, 2003 from $3.6 million at September 30, 2003, and decreased 66.8% from $9.8 million at December 31, 2002. Total non-accrual loans, excluding loans in the held-for-sale category, were $4.6 million at December 31, 2003, $5.3 million at September 30, 2003 and $4.3 million at December 31, 2002. Non-performing assets, excluding loans held for sale, decreased to 0.18% of total assets at December 31, 2003, down from 0.21% of total assets at September 30, 2003 and 0.32% at December 31, 2002. Book value per share amounted to $14.48 per share as of December 31, 2003, up slightly from $14.43 per share one year ago. The Company has virtually no intangible assets on its balance sheet. Average core deposits (defined as total deposits less time deposits) as a percent of average total deposits increased to 56.6% for the current quarter from 53.1% a year ago. The Company's tier 1 risk-based capital, total risk-based capital and leverage ratios were 9.74%, 10.13%, and 5.81% at December 31, 2003. The Company's tier 1 risk-based capital and total risk-based capital and leverage ratios were 10.13%. 10.54%, and 6.01% at September 30, 2003 and 9.74%, 10.14%, and 5.47% at December 31, 2002. The Company is considered "well-capitalized" under regulatory guidelines. The Trust Company of New Jersey is one of the largest banks based in New Jersey. It is a full service commercial bank, founded in 1896, that operates over 90 branches and over 150 ATMs throughout New Jersey's 13 Northern and Central Counties as well as 2 locations in Rockland County, New York. For further information regarding The Trust Company of New Jersey visit our website at www.trustcompany.com. Non-historical statements in Trustcompany's press release constitute forward-looking statements under the Private Securities Litigation Reform Act of 1995. These may be identified by the use of words or phrases such as "believe," "expect," "anticipate," and "potential" or other words or phrases of similar import. These forward-looking statements are based on Trustcompany's current expectations. A wide variety of factors could cause Trustcompany's actual results and experience to differ materially from the anticipated results or other expectations expressed in such forward-looking statements. The risks and uncertainties that may affect the operations, performance, developments, and results of Trustcompany's business include, among others, interest rate movements, competition from both financial and non-financial institutions, changes in applicable laws and regulations, regulatory initiatives and directives, the timing and occurrence (or non-occurrence) of transactions and events that may be subject to circumstances beyond Trustcompany's control and general economic and geopolitical conditions. In addition, this press release contains forward-looking statements regarding North Fork's acquisition of Trustcompany. These forward-looking statements involve certain risks and uncertainties. Factors that may cause the actual results and experience relating to this acquisition to differ materially from those contemplated by such forward-looking statements include, among others, the following possibilities: (1) estimated cost savings from the acquisition cannot be fully realized within the expected time frame; (2) revenues following the acquisition are lower than expected; (3) competitive pressure among depository institutions increases significantly; (4) costs or difficulties related to the integration of the businesses of North Fork and Trustcompany are greater than expected; (5) changes in the interest rate environment reduce interest margins; (6) general economic conditions, either nationally or in the markets in which North Fork will be doing business, are less favorable than expected; (7) legislation or changes in regulatory requirements adversely affect the businesses in which North Fork would be engaged or (8) factors occur which result in a condition to the transaction not being met. North Fork intends to file with the Securities and Exchange Commission (the "SEC") a registration statement and other relevant materials in connection with the proposed merger (the "Merger"). The registration statement will contain a proxy statement/prospectus to be distributed to the stockholders of Trustcompany in connection with their vote on the Merger. Investors and security holders are urged to read the registration statement (including the proxy statement/prospectus) and the other relevant materials when they become available because they will contain important information about North Fork, Trustcompany and the Merger. The registration statement (including the proxy statement/prospectus) and other relevant materials, and any other documents filed by North Fork with the SEC, when they become available, may be obtained free of charge at the SEC's web site at www.sec.gov. The proxy statement/prospectus and other relevant materials, and any other documents filed by Trustcompany with the Federal Deposit Insurance Corporation (the "FDIC"), when they become available, may be obtained at the FDIC, Registration and Disclosure Division, 550 17th Street N.W., Room F-643, Washington, D.C. 20429. In addition, investors and security holders may obtain free copies of the documents filed with the SEC by North Fork by contacting the Corporate Secretary, North Fork Bancorporation, Inc., 275 Broadhollow Road, Melville, New York 11747, telephone: 631-844-1252 or by visiting North Fork's website at www.northforkbank.com. Investors and security holders may obtain free copies of the documents filed with the FDIC by Trustcompany by contacting The Trust Company of New Jersey, Investor Relations, 35 Journal Square, Jersey City, New Jersey 07306, telephone: 201-420-4946. Trustcompany and certain of its executive officers and directors may be deemed to be participants in the solicitation of proxies from the stockholders of Trustcompany in favor of the Merger. Information about the interests of Trustcompany's executive officers and directors in Trustcompany is set forth in the proxy statement for Trustcompany's 2003 Annual Meeting of Stockholders, which was filed with the FDIC on April 4, 2003. In addition to those interests, Alan J. Wilzig, the Chairman, President and Chief Executive Officer of Trustcompany, will become a director of North Fork following the Merger and will enter into an employment agreement and change of control agreement with North Fork. If and to the extent that Mr. Wilzig will receive any additional benefits in connection with the Merger that are unknown as of the date of this filing, the details of such benefits will be described in the proxy statement-prospectus to be distributed to Trustcompany stockholders. Investors and security holders may obtain more detailed information regarding the direct and indirect interests of Mr. Wilzig and Trustcompany's other executive officers and directors by reading the proxy statement-prospectus when it becomes available. The Trust Company of New Jersey Consolidated Statements of Condition ($ in thousands, except per share amounts) Unaudited December 31, -------------------------------------- Assets 2003 2002 ------ ------------------ ---------------- Cash and due from banks $ 117,403 $ 135,382 Federal funds sold 30,000 50,000 ---------------- ---------------- Total cash and cash equivalents 147,403 185,382 Securities: Available for sale, at market value 1,678,406 1,927,065 Held to maturity (market value $57,081 in 2003 and $54,575 in 2002) 52,427 52,636 ---------------- ---------------- Total securities 1,730,833 1,979,701 Loans: Held for sale 66,095 (1) 251,284 Held in portfolio, net of unearned income 2,132,706 1,790,570 Allowance for loan losses (10,144) (9,971) ---------------- ---------------- Loans, net 2,188,657 2,031,883 Premises and equipment 39,135 40,167 Other real estate owned 3,271 9,846 Accrued interest receivable 20,602 24,840 Bank owned life insurance 70,093 67,765 Prepaid pension cost and other assets 78,011 71,218 ---------------- ---------------- Total Assets $ 4,278,005 $ 4,410,802 ================ ================ Liabilities and Stockholders' Equity ------------------------------------ Deposits: Non interest bearing demand $ 627,830 $ 584,979 Interest bearing NOW and money market 659,928 700,345 Savings 560,883 513,934 Time 1,458,042 1,638,024 ---------------- ---------------- Total deposits 3,306,683 3,437,282 Securities sold under agreements to repurchase and other borrowings 121,331 71,283 Federal Home Loan Bank advances 550,000 600,000 Deferred taxes and other liabilities 33,668 37,967 ---------------- ---------------- Total liabilities 4,011,682 4,146,532 Common stock, $2.00 par value; authorized 72,000,000 shares; issued and outstanding 18,387,801 in 2003 and 18,312,909 in 2002 36,776 36,626 Additional paid in capital 30,061 26,762 Retained earnings 185,093 179,179 Accumulated other comprehensive income 14,393 21,703 ---------------- ---------------- Total stockholders' equity 266,323 264,270 ---------------- ---------------- Total Liabilities and Stockholders' Equity $ 4,278,005 $ 4,410,802 ================ ================ (See accompanying Notes to Financial Data)
THE TRUST COMPANY OF NEW JERSEY CONSOLIDATED STATEMENTS OF INCOME ($ IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
UNAUDITED QUARTERS ENDED ------------------------------------------------- DECEMBER 31, SEPTEMBER 30, DECEMBER 31, 2003 2003 2002 ------------ ------------- ------------ INTEREST INCOME Interest and fees on loans $ 33,490 $ 32,709 $ 35,226 Interest on Federal funds sold 278 294 442 Interest and dividends on securities Taxable 13,699 12,162 17,954 Exempt from Federal Income Taxes 3,217 3,232 3,387 ------------ ------------- ------------ Total interest income 50,684 48,397 57,009 INTEREST EXPENSE Interest on deposits 10,996 11,486 17,556 Interest on borrowed funds 6,440 6,699 7,696 ------------ ------------- ------------ Total interest expense 17,436 18,185 25,252 ------------ ------------- ------------ Net interest income 33,248 30,212 31,757 Provision for loan losses 10,200 (2) 1,000 1,300 ------------ ------------- ------------ Net interest income after provision for loan losses 23,048 29,212 30,457 NON-INTEREST INCOME Service charges on deposit accounts and other retail banking fees 4,811 4,437 4,529 Trust department income 723 516 468 Bank owned life insurance 781 811 882 Net gains on securities sales 809 185 1,579 Gains on sales of securitizations and loans 937 2,045 28 Other income 297 553 24 ------------ ------------- ------------ Total non-interest income 8,358 8,547 7,510 NON-INTEREST EXPENSE Salaries and employee benefits 15,159 (3) 14,064 15,429 Pension expense (income) (5,730) (5,701) (3,891) Occupancy expense, net of rental income 3,487 3,283 3,468 Furniture and equipment expense 2,372 2,560 2,281 Outside data processing services 1,505 1,471 1,429 Other real estate owned (income) expenses, net (279) (567) 1,817 Merger related expenses 7,173 - - Loss on early extinguishment of debt - 3,269 - Mortgage servicing asset valuation expense (income) 1,147 (1,434) 1,447 Other expense 8,851 (4) 6,919 6,971 ------------ ------------- ------------ Total non-interest expense 33,685 23,864 28,951 Income (loss) before provision for income taxes (2,279) 13,895 9,016 Provision (benefit) for income taxes (708) 3,921 1,561 ------------ ------------- ------------ NET INCOME (LOSS) $ (1,571) $ 9,974 $ 7,455 ============ ============= ============ EARNINGS PER COMMON SHARE Basic ($ 0.09) $ 0.54 $ 0.41 ============ ============= ============ Diluted ($ (0.09) $ 0.53 $ 0.40 ============ ============= ============ WEIGHTED AVERAGE SHARES OUTSTANDING Basic 18,352,843 18,329,997 18,333,112 ============ ============= ============ Diluted 19,144,784 18,838,987 18,701,342 ============ ============= ============
(SEE ACCOMPANYING NOTES TO FINANCIAL DATA) THE TRUST COMPANY OF NEW JERSEY CONSOLIDATED STATEMENTS OF INCOME ($ IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
UNAUDITED YEARS ENDED DECEMBER 31, --------------------------------- 2003 2002 ------------ ------------- INTEREST INCOME Interest and fees on loans $ 134,377 $ 134,751 Interest on Federal funds sold 1,234 2,928 Interest and dividends on securities Taxable 55,832 74,556 Exempt from Federal Income Taxes 13,142 12,119 ------------ ------------- Total interest income 204,585 224,354 INTEREST EXPENSE Interest on deposits 50,544 76,333 Interest on borrowed funds 28,103 30,413 ------------ ------------- Total interest expense 78,647 106,746 ------------ ------------- Net interest income 125,938 117,608 Provision for loan losses 12,800 (2) 2,200 ------------ ------------- Net interest income after provision for loan losses 113,138 115,408 NON-INTEREST INCOME Service charges on deposit accounts and other retail banking fees 19,282 19,306 Trust department income 2,012 1,620 Bank owned life insurance 4,514 4,089 Net gains on securities sales 1,190 9,112 Gains on sales of securitizations and loans 11,439 11,745 Other income 1,003 315 ------------ ------------- Total non-interest income 39,440 46,187 NON-INTEREST EXPENSE Salaries and employee benefits 64,606 53,855 Pension expense (income) (12,110) 860 Occupancy expense, net of rental income 14,587 13,668 Furniture and equipment expense 9,504 8,422 Outside data processing services 5,969 5,737 Other real estate owned expenses, net 1,227 2,034 Merger related expenses 7,173 - Loss on early extinguishment of debt 6,027 - Mortgage servicing asset valuation expense 1,002 2,520 Other expense 29,186 23,201 ------------ ------------- Total non-interest expense 127,171 110,297 Income before provision for income taxes 25,407 51,298 Provision for income taxes 4,378 13,308 ------------ ------------- NET INCOME $ 21,029 $ 37,990 ============ ============= EARNINGS PER COMMON SHARE Basic $ 1.15 $ 2.07 ============ ============= Diluted $ 1.11 $ 2.03 ============ ============= WEIGHTED AVERAGE SHARES OUTSTANDING Basic 18,338,712 18,386,331 ============ ============= Diluted 18,933,515 18,694,748 ============ =============
(SEE ACCOMPANYING NOTES TO FINANCIAL DATA) THE TRUST COMPANY OF NEW JERSEY NOTES TO FINANCIAL DATA ($ IN THOUSANDS) (1) Includes $46,981 of residential mortgages and $19,114 of commercial real estate loans to a single borrower. (2) Includes $9,200 associated with the write-down of one relationship transferred to held-for-sale. (3) Includes $437 of stock appreciation rights expense reflecting the increased value of TCNJ common stock resulting from the announcement of the merger with North Fork. (4) Includes $1,892 of costs related to branch closings, holding company formation and trust preferred filings, retirement plan restructuring and special legal and consulting fees.