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UJB FINANCIAL NINE MONTH EARNINGS RISE 40 PERCENT; EARNINGS REFLECT RESTRUCTURING CHARGE TAKEN IN THIRD QUARTER

 PRINCETON, N.J., Oct. 19 /PRNewswire/ -- UJB Financial Corp. (NYSE: UJB) today announced earnings for the first nine months of 1993 of $54.6 million, or $1.04 per common share, compared to $36.1 million, or $.74 per common share, for the same period a year ago, a 40.5 percent increase. Earnings for the third quarter were $11.8 million, or $.22 per common share, compared to $16.3 million, or $.33 per common share, a year ago. The results for the nine months and the third quarter were reduced due to a restructuring charge of $21.5 million. Excluding the after-tax effect of this one-time charge, earnings for the quarter would have been higher by $12.7 million, or $.25 per common share. The charge reflects a recently announced program to realign the company along business lines and consolidate its member banks into one each in New Jersey and Pennsylvania.
 Chairman and CEO T. Joseph Semrod said, "The restructuring program represents the final phase of a strategic initiative which is expected to enhance shareholder value and improve the company's competitive position for the future. When combined with current efficiency measures already under way, the restructuring is expected to lead to total annualized savings and incremental revenues of over $40 million in 1995."
 Mr. Semrod continued, "Excluding the restructuring charge, UJB Financial has now enjoyed nearly three years of improved earnings, including more than two years of reductions in non-performing loans. We are encouraged by the declining trend in the amount of loans moving into the non-performing category so far this year. Third quarter earnings were enhanced by improved credit quality and lower costs associated with non-performing loans."
 At Sept. 30, 1993, non-performing loans were $273.5 million, a reduction of $112.0 million, or 29.1 percent, from a year ago. For the quarter, the company reduced non-performing loans by $22.5 million, marking the ninth consecutive quarter of declines. Non-performing loans as a percent of total loans were 3.14 percent at Sept. 30, 1993, compared to 4.34 percent a year ago.
 The allowance for loan losses was $246.8 million at Sept. 30, 1993, or 2.84 percent of loans, compared with $291.5 million, or 3.28 percent of loans, at the end of the third quarter in 1992. The coverage ratio of non-performing loans was 90.3 percent, compared to 75.6 percent at this time a year ago.
 The provision for loan losses for the quarter amounted to $24.0 million, compared to $32.0 million a year ago. For the first nine months, the provision at $74.0 million decreased 34.5 percent from $113.0 million recorded in the same period a year ago. Net charge offs for the third quarter of 1993 were $25.9 million, or 1.18 percent of average loans, compared to $34.8 million, or 1.56 percent, at Sept. 30, 1992.
 Other real estate owned (OREO), which includes foreclosed assets and in-substance foreclosures, net of reserve, declined $53.5 million from a year ago and amounted to $92.7 million at Sept. 30, 1993, compared to $146.2 million at Sept. 30, 1992. Included in the OREO balance at Sept. 30, 1993, was a reserve of $29.5 million, compared to $5.7 million a year ago.
 "Our loan growth has continued to be impacted by the lackluster performance of the national and regional economies. We have experienced continued reluctance on the part of both consumers and businesses to borrow," Mr. Semrod stated.
 Total loans at Sept. 30, 1993, amounted to $8.7 billion, down 2.1 percent from $8.9 billion at Sept. 30, 1992, but up slightly from June 30, 1993. At the end of the third quarter, commercial loans were $4.3 billion, down 4.4 percent from a year ago. Installment loans declined slightly and at Sept. 30, 1993, were $2.0 billion, as compared to $2.1 billion at Sept. 30, 1992. Mortgage loans at $2.3 billion were up 4.8 percent from the same period a year ago.
 "Deposit growth has felt the impact of the ongoing lower rate environment, as we have witnessed New Jersey and Pennsylvania consumers and middle market borrowers using liquidity to pay down debt," Mr. Semrod explained. Retail savings and time deposits at $8.5 billion at Sept. 30, 1993, showed a 3.9 percent decrease from the prior year.
 Mr. Semrod pointed out that demand deposits had, however, shown strong growth and at $2.7 billion had increased $472.2 million, or 21.0 percent, from Sept. 30, 1992. "This increase can be attributed to our continued aggressive business development efforts and the new relationships which we have established over the last 18 months. These relationships should prove beneficial when the economy does return to more normal levels and businesses again begin to borrow," he said.
 "UJB Financial's earnings were positively impacted by continued improvement in interest margin," Mr. Semrod said. For the quarter, net interest income totaled $142.6 million, a 2.7 percent gain over the same quarter a year ago, and for the nine months was $421.5 million, up 5.4 percent from the prior year.
 During the third quarter of 1993, net interest margin at 4.66 percent increased from 4.60 percent the prior year. For the first nine months, net interest margin was 4.64 percent, compared to 4.50 percent in 1992. Factors contributing to this improvement were the continued strong growth in demand deposits, a reduced level of non-performing loans and a lower interest rate environment.
 Non-interest operating income, which excludes securities transactions, increased 15.1 percent for the quarter ended Sept. 30, 1993, and was up 7.4 percent for the nine months. Improvements in both trust income and service charges on deposit accounts were responsible for the increases.
 Non-interest expenses for the third quarter of 1993 totaled $150.5 million, a 22.0 percent increase over a year ago, and for the nine months were $415.1 million, a 12.6 percent rise from the prior year. Non-interest expenses for the third quarter included a restructuring charge of $21.5 million. Excluding this charge, expenses for the third quarter and the nine months would have increased 4.5 percent and 6.7 percent, respectively.
 In conclusion Mr. Semrod said, "Improved earnings and ongoing balance sheet management continue to strengthen our capital ratios." At Sept. 30, 1993, Tier I capital was 9.14 percent, compared to 8.72 percent at Sept. 30, 1992. Total risk-based capital for the third quarter of 1993 was 12.20 percent, compared to 10.19 percent a year ago. The leverage ratio at Sept. 30, 1993, was 6.90 percent, against 6.58 percent at Sept. 30, 1992.
 UJB Financial with $13.6 billion in assets has 257 banking offices in New Jersey and eastern Pennsylvania. The company currently 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.
 Quarter ended Sept. 30 1993 1992
 Net income $11,843,000(A) $16,315,000
 Per share $.22(A) $.33
 Average shares outstanding 51,361,000 48,017,000
 Nine months ended Sept. 30 1993 1992
 Income before cumulative effect of a
 change in accounting principle $50,795,000(A) $36,106,000
 Cumulative effect of a change
 in accounting principle(B) 3,816,000 --
 Net income $54,611,000(A) $36,106,000
 Per share
 Income before cumulative effect of a
 change in accounting principle $.97(A) $.74
 Cumulative effect of a change
 in accounting principle(B) .07 --
 Net income $1.04(A) $.74
 Average shares outstanding 51,190,000 46,779,000
 Book value per common share $18.07 $17.31
 (A) -- Includes 1993 third quarter restructuring charge of $21.5 million, $12.7 million after tax, or $.25 per share.
 (B) -- Effective January 1993, the company adopted Financial Accounting Standards No. 109, Accounting for Income Taxes. The cumulative effect of the accounting change had a favorable impact on net income of $3.8 million or $.07 per share in the first quarter.
 -0- 10/19/93
 /CONTACT: Faith P. Goldstein, VP-corporate communications, 609-987-3341, or (analysts/investors) Kerry K. Calaiaro, VP of investor relations, 609-987-3226, all of UJB Financial/
 (UJB)


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

CK -- NY060 -- 3991 10/19/93 12:44 EDT
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