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Hudson River Bancorp, Inc.
&
Cohoes Bancorp, Inc.
Updated Synopsis of Merger
June 28, 2000
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These investor materials may contain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 that involve
risk and uncertainty. It should be noted that a variety of factors could cause
the combined company's actual results and experience to differ materially from
the anticipated results or expectations expressed in the combined company's
forward-looking statements.
The risks and uncertainties that may affect the operations, performance,
development, growth projections and results of the combined company's business
include, but are not limited to, the growth of the economy, interest rate
movements, timely development by the combined company of technology enhancements
for its products and operating systems, the impact of competitive products,
services and pricing, customer based requirements, Congressional legislation,
acquisition cost savings and revenue enhancements and similar matters. Readers
of this report are cautioned not to place undue reliance on forward-looking
statements which are subject to influence by the named risk factors and
unanticipated future events. Actual results, accordingly, may differ materially
from management expectations.
Cohoes and Hudson River do not undertake, and specifically disclaim, any
obligation to publicly release the results of any revisions which may be made to
any forward-looking statements to reflect the occurrence of anticipated or
unanticipated events or circumstances after the date of such statements.
Hudson River has filed a Registration Statement on Form S-4 concerning the
merger with the Securities and Exchange Commission ("SEC"). WE URGE INVESTORS TO
READ THIS DOCUMENT BECAUSE IT CONTAINS IMPORTANT INFORMATION. Investors are able
to obtain the S-4 free of charge at the SEC's website, www.sec.gov. In addition,
documents filed with the SEC by Cohoes will be available free of charge from the
Secretary of Cohoes at 75 Remsen Street, Cohoes, New York 12047, telephone (518)
233-6500. Documents filed with the SEC by Hudson River will be available free of
charge from the Secretary of Hudson River at One Hudson City Centre, Hudson, New
York 12534, telephone (518) 828-4600. INVESTORS SHOULD READ THE JOINT PROXY
STATEMENT/PROSPECTUS CAREFULLY BEFORE MAKING A DECISION CONCERNING THE MERGER.
Cohoes and Hudson River and their respective directors and executive
officers may be deemed to be participants in the solicitation of proxies to
approve the Merger. INFORMATION ABOUT THE PARTICIPANTS MAY BE OBTAINED FROM THE
RESPECTIVE COMPANIES.
<PAGE>
[Map of Combined Market Area of Cohoes Savings Bank and Hudson River Bank and
Trust Company]
<PAGE>
DESCRIPTION OF HUDSON RIVER (HRBT)
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- Headquartered in Hudson, NY, the company provides full-service banking, as
well as investment management, trust and commercial services through its
subsidiary, Hudson River Bank & Trust Company. The company operates 18
branch offices.
- A summary of the bank's balance sheet and earnings performance as of March
31, 2000 is as follows:
(in thousands)
Total Assets $1,149,547
Loans, net 804,247
Securities 255,549
Deposits 748,563
Total Equity 200,723
Equity to Assets 17.46%
LTM Earnings $ 9,526
LTM EPS $ .65
LTM ROE 4.58%
<PAGE>
DESCRIPTION OF COHOES BANCORP (COHB)
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- Unitary holding company headquartered in Cohoes, NY. Its principal
subsidiary, Cohoes Savings Bank, operates 21 banking locations throughout
the NY upstate region.
- A summary of the bank's balance sheet and earnings performance as of March
31, 2000 is as follows:
(in thousands)
Total Assets $704,414
Loans, net 577,442
Securities 97,321
Deposits 491,508
Total Equity 121,136
Equity to Assets 17.20%
LTM Earnings $ 6,056
LTM EPS $ 0.72
LTM ROE 4.58%
<PAGE>
TRANSACTION DESCRIPTION - TERM SHEET
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Exchange Ratio: Fixed exchange ratio of 1.185 shares of HRBT for each COHB
share.
Value: COHB shareholders receive $11.04, based on HRBT's closing
stock price of $9.31 through 4/24/00. The aggregate offer is
approximately $87.3 million.
Ownership Profile: HRBT 62% / COHB 38%
<PAGE>
TRANSACTION DESCRIPTION - TERM SHEET
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Management: Chairman & CEO: Robinson for next 36 mos.
President: Florio
On the third anniversary, CEO position shared between
Robinson and Florio, for a six month transition. Then
Florio is sole CEO and Robinson continues as chairman.
Board of
Directors
Representation: 6 HRBT members / 6 COHB members
Accounting/
Stock Percentage: Purchase Accounting; 100% Stock
Stock Purchase
Option: Reciprocal standard 19.9% Agreements
<PAGE>
TRANSACTION BENEFITS
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STRATEGIC:
- Creates a dominant franchise with assets of approximately $1.8
billion and a $275mm market capitalization based on recent market
prices
- Expands core market area and creates critical mass in upstate New
York with a strong local presence
- Enhances ability to compete and widens product range through a
broadened customer base with similar demographics
- Provides an additional platform for further growth
<PAGE>
TRANSACTION BENEFITS
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FINANCIAL:
- Significantly accretive to earnings
- Strong capital position
- Purchase accounting provides flexibility to maintain stock
repurchases
- Increases liquidity
- Identified cost savings of approximately $3.6 million
- Revenue enhancements and/or deployment of excess capital/
incremental cash will further enhance financial benefits
<PAGE>
STRONG NY MARKET SHARE
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Deposit Data & Market Share Information is as of June 30, 1999
Source: SNL Securities, L.P.
County Institution Total Deposits ($millions) Market Share %
----------- --------------- --------------------- --------------
Albany HRBT $ 38 .62%
COHB 321 5.32
------ -----
Pro Forma 359 5.94
Columbia HRBT 457 59.22
Dutchess HRBT 24 .84
Greene COHB 1 .17
Rensselaer HRBT 63 4.08
COHB 57 3.71
------ -----
Pro Forma 119 7.79
Saratoga COHB 48 2.87
Schenectady HRBT 176 8.51
COHB 24 1.18
------ -----
Pro Forma 200 9.69
Warren COHB 7 .71
<PAGE>
STRONG BALANCE SHEET COMPOSITION
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Estimated March 31, 2000 Pro Forma Balance Sheet ($ in millions)
Estimated
HRBT COHB Pro Forma
----------- ---------- -----------
Assets $1,149 $704 $1,839
Net Loans 804 577 1,371
Investments 255 97 351
Deposits 749 491 1,241
Borrowings 151 80 225
Tangible Capital 189 121 277
<PAGE>
STRONG BALANCE SHEET COMPOSITION
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Estimated March 31, 2000 Pro Forma Balance Sheet ($ in millions)
Estimated
HRBT COHB Pro Forma
----------- ---------- -----------
App. Market Capitalization $ 146 $ 84 $ 230
Nonperforming Loans $ 10 $ 4 $ 14
Borrowings/Assets 13.14% 11.36% 12.25%
Tangible Capital/Assets 16.62% 17.20% 15.08%
LLR/Loans 2.38% 0.82% 1.75%
LLR/Nonperforming Loans 1.90% 1.09% 1.66%
<PAGE>
ATTRACTIVE EPS ACCRETION
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($ in millions, except for per share data)
Est. 2002
-------------
HRBT Estimated Net Income ($ .87)(1) $11.8
COHB Estimated Net Income ($1.00)(1) 6.9
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Total Estimated Net Income 18.7
After-Tax Cost Savings ($3.6 Pre-Tax) 2.3
After-Tax Earnings on Incremental Cash/ Capital 0
Revenue Enhancements 0
Purchase Accounting Adjustments (2) 2.0
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Pro Forma Net Income $23.0
=====
Estimated Pro Forma FD Shares 23.3
-----
Pro Forma EPS $0.98
=====
HRBT EPS Accretion 13%
COHB EPS Accretion 16%
(1) Based on management expectations.
(2) Includes amortization of negative goodwill generated in transaction plus
any balance sheet mark to markets.
<PAGE>
COST SAVING ANALYSIS
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Non Interest Expense:
--------------------------------
(In Thousands)
Salary & Benefits $1,669
Occupancy Expense 104
ESOP Expense 616
Other Operating Expenses 1,212
------
Total $3,601
Estimated Pre-tax Merger and Restructuring Charges of $6mm
Note: Full phase-in expected in 2001.
<PAGE>
REVENUE ENHANCEMENT OPPORTUNITIES
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- Incremental earnings potential through ability to leverage excess capital
- Trust services
- Expansion of small business lending
- Cash management services
- Expanded legal lending limit
<PAGE>
TIMING OF TRANSACTION
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- Transition teams for both banks have been formed and are working on
merger-related issues
- Shareholder votes are currently expected in August, 2000
- Transaction expected to close in early 4th Quarter, 2000
- Transaction must close by February 28, 2001
