updated 7/12/2005 12:53:51 PM ET 2005-07-12T16:53:51

Financial services company TD Banknorth Inc. said Tuesday that it agreed to acquire Hudson United Bancorp Inc. in a $1.9 billion deal that will extend its business into the New Jersey and Philadelphia markets.

The acquisition will create a regional financial services company with 590 branches, 751 ATMs and more than $26 billion in deposits across eight northeastern states.

TD Banknorth is offering a combination of 49 percent cash and 51 percent stock that values Hudson United at about $42.78 per share based on TD Banknorth’s Monday closing stock price. That represents a 14 percent premium over Hudson United’s closing price of $37.50 on Monday.

“This acquisition is consistent with our growth strategy and will significantly expand our franchise in both Connecticut and eastern New York while providing us with a presence in the fast-growing markets of New Jersey and Philadelphia,” said William J. Ryan, TD Banknorth’s chairman, president and chief executive.

Hudson United, which has about 1,900 employees, posted net income of $128.1 million on sales of $570.8 million in fiscal 2004. The company operates more than 200 branches in southern Connecticut, New Jersey, New York, and eastern Pennsylvania that serve individuals and small to midsized businesses.

Kenneth T. Neilson, Hudson United chairman, president and chief executive, said in an interview that possible layoffs connected with the transaction would be “minimal,” and noted that TD Banknorth will provide significant opportunities to Hudson employees.

“Our franchises do not overlap,” said Neilson, who will retire when the deal is complete. “That was a major attraction to the deal.”

Neilson also said that Hudson United enhanced its severance packages should anyone decide not to continue with the combined company.

Jeff Nathanson, a spokesman for TD Banknorth, said that while it is too early to tell what sort of personnel redundancies will exist in the combined company, overlap is most likely to occur in finance and marketing departments, and within loan and deposit operations.

Ryan told analysts during a conference call Tuesday that it’s unlikely jobs will be lost at the customer-service level. He said that some higher-level administrative jobs from Hudson’s current turf could be moved to Maine. In addition to Maine, New York and Connecticut, TD Banknorth has operations in Vermont, New Hampshire and Massachusetts.

Ryan said TD Banknorth branches average deposits of $52 million at any one time, compared with $30 million for Hudson branches. He said that with more advertising and the ability to make bigger loans, the Hudson branches can attract more deposits.

He also said TD Banknorth would follow Hudson’s expansion plans. Ryan said the combined bank will probably not expand farther south than Philadelphia, but may eventually enter New York City.

TD Banknorth, which has about 7,200 workers, reported net income of $304.6 million on sales of $1.6 billion in 2004.

The company expects the transaction to lower earnings by 1 cent per share in 2006 and add 6 cents per share to earnings in 2007. Analysts surveyed by Thomson Financial are looking for earnings per share of $2.34 in 2006.

The deal, which is subject to regulatory and shareholder approvals, is expected to close in the first quarter of 2006, with Hudson branches converting later next year. Two Hudson United directors will be added to the TD Banknorth board.

TD Banknorth said it plans to finance the transaction through the sale of 29.6 million shares of TD Banknorth common stock $31.79 per share to TD Bank Financial Group, the company’s majority shareholder.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


Discussion comments


Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 3.79%
$30K home equity loan FICO 4.99%
$75K home equity loan FICO 4.69%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.83%
Cash Back Cards 17.80%
Rewards Cards 17.18%
Source: Bankrate.com