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EARNINGS CONTINUE TO RISE AT UJB FINANCIAL

 EARNINGS CONTINUE TO RISE AT UJB FINANCIAL
 PRINCETON, N.J. April 9 /PRNewswire/ -- UJB Financial Corp.


(NYSE: UJB) today announced first quarter earnings of $.20 per common share compared to $.03 a year ago. This represents the fifth consecutive quarter of improved earnings. The company also reported a decline in the level of non-performing loans for the third successive quarter.
 Net income for the first quarter of 1992 was $9.5 million, or $.20 per common share, compared with $1.9 million, or $.03 per common share, for the same period a year ago. Non-performing loans at March 31, 1992 were $420.9 million, a decline of $23.9 million, or 5.4 percent from year end. This follows decreases previously reported in both the third and fourth quarters of 1991.
 "We are encouraged that we have achieved increased earnings for the fifth quarter in a row despite continued weakness in the regional and national economies," T. Joseph Semrod, chairman, president, and chief executive officer said.
 "More importantly," Semrod continued, "since non-performing loans reached their highest level at June 30, 1991 at $483.0 million, they have declined in each of the last three quarters. This is an indication that the negative effect on earnings of the non-performing loan portfolio will continue to diminish as the year goes forward."
 "Further adding to our optimism that UJB Financial will show steady improvement in earnings in 1992, is the recently announced decision by the FDIC not to increase deposit insurance premiums this year and the Federal Reserve's lowering of the reserve requirement. These two actions alone will reduce our anticipated costs for the remainder of the year by nearly $6 million," Semrod added. "Additionally, the low interest rate environment and the proposed New Jersey and Federal tax credits for first time home buyers should create a stimulus in the residential real estate market and make it easier for us to sell our other real estate owned. Also, we have a contract to sell the former headquarters building of Commercial Bancshares in Jersey City which will result in a $4.5 million gain this year."
 At March 31, 1992, non-performing loans totaled $420.9 million, or 4.83 percent of total loans compared to $444.7 million, or 5.07 percent at Dec. 31, 1991, and $449.7 million, or 5.24 percent, a year ago. "We are encouraged that the downward trend in non-performing loans continues," Semrod said. "The amount of new loans moving into this category have declined in each of the last six quarters. Payments received on these loans also continued to be significant."
 The allowance for loan losses at March 31, 1992 was $289.8 million, or 3.33 percent of total loans, compared to $285.9 million, or 3.33 percent of total loans a year earlier. The provision for loan losses for the quarter ended March 31, 1992 was $40.0 million, compared to $51.0 million for the same period a year earlier, down 21.6 percent. Net charge-offs were $39.0 million, or 1.80 percent of average loans, for the quarter ended March 31, 1992, compared to $23.7 million, or 1.12 percent the previous year. The coverage ratio of the allowance to non- performing loans rose to 69 percent.
 Other real estate, which includes foreclosed assets and in-substance foreclosures, amounted to $143.6 million at March 31, 1992, compared to $119.9 million a year ago. Approximately 60 percent of the total represents properties for which we hold the title and that can be sold.
 Total loans at March 31, 1992 were $8.7 billion, up 1.5 percent from $8.6 billion the prior year. Installment loans at March 31, 1992 at $1.9 billion were up 4.4 percent, compared to $1.8 billion at March 31, 1991, and mortgage loans were $2.1 billion, up 12.0 percent over the same period a year ago. Total commercial loans at the end of the first quarter were $4.6 billion, down 2.5 percent from March 31, 1991.
 "Although the overall market for commercial and industrial loans continues to decline because of the economy, our share of that market has increased. Despite this improvement, borrowing continues to be down from previous levels at UJB Financial," Semrod observed. "However, increases in consumer and mortgage loans continued to offset weak commercial loan demand, as they did throughout last year."
 "We experienced strong growth in deposits," Semrod pointed out. "Demand deposits increased $366.0 million to $2.1 billion, an increase of 21.1 percent over the prior year." Total retail time deposits were up $799.9 million to $8.7 billion, an increase of 10.2 percent. These combined deposits at March 31, 1992 were $10.8 billion, up 12.2 percent. Total assets at $13.3 billion increased 5.1 percent at March 31, 1992, compared to $12.7 billion a year ago.
 Net interest income was up 6.8 percent to $126.4 million for the quarter ending March 31, 1992, compared to $118.4 million for the same period last year. Net interest margin was 4.34 percent for the first quarter of 1992, compared to 4.17 percent reported in both the first and last quarters of 1991. Significant demand deposit growth and the benefit of the lower rate environment on the cost of retail time deposits were the primary factors for the improvement in interest margin.
 Non-interest operating income grew 22.7 percent to $37.8 million. Significant increases were reported in all categories with loan fees up 33.1 percent, service charges up by 32.3 percent, and trust income rising 13.7 percent. Additionally, security gains of $7.3 million were realized to take advantage of current market conditions and to reduce prepayment risk associated with higher coupon mortgage-backed securities.
 Non-interest expenses in the first quarter were up $18.8 million over a year ago, but down $4.1 million from the fourth quarter of 1991. Approximately $7.0 million of the increase over the prior year was attributable to legal and professional fees on non-performing loans and higher costs associated with holding and operating other real estate. Additionally, expenses in connection with recent events that had not occurred in the first half of 1991, accounted for $3.5 million of the increase this quarter. Such expenses include our new operations facility, operating costs of branch acquisitions, and an increased FDIC insurance assessment.
 "Part of this expense growth also results from the expansion of certain fee-based business such as trust, insurance and annuity sales, mortgage originations, and merchant bankcard processing. The benefit of these costs are reflected in the 22.7 percent growth in non-interest income. This quarter also includes $1.5 million of costs related to the proxy contest," Semrod added.
 "We continue to see signs that the regional economy is improving. However, indications are that it will be a slow recovery," Semrod concluded. "More than 100 companies relocated to New Jersey last year and other major firms are moving in this year. With mortgage rates still down, housing starts and home sales should continue to improve as they did last year. For the long term, New Jersey is expected to have a steady increase in exports. In Pennsylvania, UJB Financial is anticipating good solid growth in 1992. Our share of commercial and industrial loans in that state has increased by 74 percent since year- end 1988."
 UJB Financial has 265 banking offices in New Jersey and eastern Pennsylvania. The company has six banks and nine active non-bank subsidiaries providing financial services to individuals, businesses, not-for-profit organizations, government, and other financial institutions.
 UJB FINANCIAL CORP.
 For the Quarter Ended March 31: 1992 1991
 Net income $ 9,547,000 $ 1,867,000
 Per share $.20 $.03
 Average shares outstanding 46,060,000 45,418,000
 Book value per common share $17.09 $17.05
 -0- 4/9/92
 /CONTACT: Barrie H. MacKay, VP-corporate communications, 609-987 3350, or Faith P. Goldstein, AVP-corporate communications, 609-987 3341, both of UJB Financial/
 (UJB) CO: UJB Financial Corp. ST: New Jersey, Pennsylvania IN: FIN SU: ERN


SH -- NY073 -- 6855 04/09/92 14:10 EDT
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Date:Apr 9, 1992
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