Printer Friendly

UJB FINANCIAL ANNOUNCES RESTRUCTURING AND CONSOLIDATION; WILL FOCUS ON FOUR PRIMARY BUSINESS LINES

 PRINCETON, N.J., Sept. 22 /PRNewswire/ -- As the final phase of a strategic initiative, UJB Financial Corp. (NYSE: UJB) today announced a comprehensive restructuring program to enhance shareholder value and improve its competitive position for the '90s and beyond.
 In making the announcement, Chairman and Chief Executive Officer T. Joseph Semrod said, "We will focus on four fronts: 1) a new management structure centered on four primary lines of business, 2) New Jersey and Pennsylvania statewide consolidations of existing member banks, 3) enhanced customer service, and 4) establishment of new financial goals.
 "The new structure will be aligned along lines of business, and will concentrate on our most profitable core businesses: wholesale lending, retail banking, mortgage banking and investment management. While UJB Financial has always been a leader in providing banking services to middle market companies, a new emphasis will now also be placed on small business customers with under $2 million in sales."
 Semrod pointed out, "Our studies show that small businesses prefer to handle banking at a local office. We have an extensive retail branch network which is well positioned to directly deliver banking services to these customers. Emphasizing small business is also consistent with UJB Financial's commitment to the goals of the Community Reinvestment Act."
 The company will be capitalizing on emerging trends and expanding its mortgage business in both New Jersey and eastern Pennsylvania. "We will be implementing a plan to increase both our mortgage servicing and originations during the next three years," Semrod said.
 Semrod also reported that UJB Financial's successful investment management group, private banking and discount brokerages will now be working in tandem to offer customers better accessibility to investment and credit services.
 "But, as much as the company will benefit from the restructuring," Semrod said, "the real winners will be our customers. By creating statewide banks, New Jersey customers will be able to conduct transactions at 185 branches, and Pennsylvania customers will have 72 offices to serve them.
 "We want to make it convenient and desirable for our customers to rely on us for all their financial needs. The resulting nearly $11 billion New Jersey bank and the $3 billion Pennsylvania bank will be customer-driven organizations with close ties to their local communities."
 Semrod said that he expects the consolidations to take place in stages over the next year and to be completed by the third quarter of 1994. UJB Financial's present New Jersey banks are: United Jersey Bank, United Jersey Bank/Central, N.A. and United Jersey Bank/South, N.A. The Pennsylvania banks are: First Valley Bank, The Hazleton National Bank and Hanover Bank.
 Semrod, 56, who is currently chairman of United Jersey Bank, will be named chairman of the resulting New Jersey bank while John R. Howell, 60, a UJB Financial vice chairman and chairman of First Valley Bank, will be named chairman of the resulting Pennsylvania bank.
 UJB Financial has now completed ten consecutive quarters of improved earnings and eight successive quarters of declines in the level of non- performing loans. Semrod said that this progress, combined with efficiencies and revenue growth provided by the restructuring, and the planned implementation of a strengthened and centralized credit risk management function, have permitted new financial goals to be set for the company. "Our goal is to achieve a return on assets (ROA) of 1.20 percent, return on equity (ROE) of over 15 percent, and a 59 percent efficiency ratio by the fourth quarter of 1995," Semrod stated.
 In the past year, the company has been implementing major projects in branch automation and back office and check processing consolidations. Now, with the added savings from the line of business strategies and the bank consolidations, UJB Financial is anticipating total annualized savings and incremental revenues of approximately $40 million.
 Semrod pointed out, "A restructuring program of this magnitude requires difficult decisions. While specific staffing needs for the new organization have yet to be determined, we believe that our actions going forward will ultimately affect approximately 7 percent of our work force."
 "Since the beginning of this year, automation and consolidation efforts have already resulted in staff reductions of about 240 employees. We were able to place a number of these people in vacant positions throughout the organization. For staff affected by the planned restructuring, we will try to do the same. However, in situations where this is not possible, employees will receive severance packages and outplacement assistance," he emphasized.
 The company anticipates a restructuring charge in conjunction with the realignment, but Semrod said that it will be necessary to define severance packages and other costs before a specific amount can be determined. It is anticipated this charge will be recognized in 1993, and that the quarter in which it is taken would remain profitable.
 UJB Financial, the 44th largest bank holding company in the nation, has total assets of $13.5 billion. Through its six banks, nine non-bank subsidiaries, and 257 banking offices, the company provides financial services throughout New Jersey and eastern Pennsylvania to individuals, businesses, not-for-profit organizations, governments and other financial institutions.
 -0- 9/22/93
 /CONTACT: Faith P. Goldstein, media, VP-corporate communications, 609-987-3341, or Kerry K. Calaiaro, analysts, VP-investor relations, 609-987-3226, both of UJB/
 (UJB)


CO: UJB Financial Corp. ST: New Jersey IN: FIN SU: RCN

PS -- NY007 -- 4518 09/22/93 08:14 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Sep 22, 1993
Words:887
Previous Article:CANTAB PHARMACEUTICALS PLC PROPOSED LISTING ON THE LONDON STOCK EXCHANGE; PATHFINDER PROSPECTUS ISSUED
Next Article:DICK GOLDSTEIN NAMED SENIOR VICE PRESIDENT SALES FOR ACKERLEY COMMUNICATIONS INC.
Topics:

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters