VOTE "For" the 'Merger' on MANAGEMENT'S
"WHITE" PROXY ONLY.
[Logo of Cohoes Bancorp Inc.] [Logo of Hudson River Bancorp Inc.]
July 20, 2000
Vote "For" the Cohoes/Hudson River 'Merger' and HELP create a POWERHOUSE Bank in
the 'Capital District'.......................................................and
tell TrustCo..."NO Thanks!"
Dear Shareholder:
Recently we sent you a Proxy Statement asking you to vote in favor of our
'Merger of Equals' transaction. We are COMMITTED to the Cohoes/Hudson River
combination and believe that it is in the BEST interest of ALL of our
shareholders (many of whom are our friends, family members, employees & business
associates.)
Our COMBINED institution will create a POWERHOUSE Franchise in our local Banking
community!
In fact, the expected STRENGTH of this combination has our competition Fighting
to STOP us!
One of our competitors, TrustCo, is trying to DISRUPT our merger by
sending you materials asking that you vote against our combination and
SUPPOSEDLY 'offering' to buy your stock.
Their 'offer' has a load of CONDITIONS (11 to be EXACT), many of which we
believe are IMPOSSIBLE to meet. In our opinion, their only REAL purpose in
mailing these materials is to DECEIVE our shareholders into defeating our Merger
because they are AFRAID of the COMPETITOR that we WILL become!
TrustCo ISN'T trying to "START SOMETHING"............................... they're
trying to 'STEAL SOMETHING'....................................specifically YOUR
companies!!!
<PAGE>
Here are a few reasons WHY you should vote "FOR" the Cohoes/Hudson River Merger:
o We WILL create a POWERHOUSE Banking Franchise in the Capital
District;
o Our combined 'Shareholder's Equity' will be $289 million,
approximately 1.75X that of TrustCo;
o With $289 million in capital, we intend to CONTINUE STOCK
REPURCHASES, CONTINUE INTERNAL GROWTH and INCREASE OUR QUARTERLY
CASH DIVIDENDS;
o Our Merger will SIGNIFICANTLY INCREASE the 'earnings per share' that
each of our companies would otherwise have had on its own.
Again, do NOT let TrustCo CONFUSE or DECEIVE you with their materials. We are
convinced that their SOLE strategy is to 'break-up' our deal.
--------------------------------------------------------------------------------
We believe the Trustco offer will NEVER become a REALITY because:
o It is a HIGHLY CONDITIONAL offer (11 in all), and we believe some of
the conditions are IMPOSSIBLE to satisfy;
o The 'currency' for their offer is OVERvalued TrustCo stock which is
currently selling at approximately 380% of 'book value' AND creates
the potential for HUGE downside risk;
o The acquisition 'premium' that they are offering is WHOLLY
inadequate.
TrustCo will TRY to CONFUSE and TRICK you.......................................
............................................DON'T let them!!!
<PAGE>
Our Boards of Directors, once again, UNANIMOUSLY URGE you to COMPLETE,
SIGN, DATE and RETURN Management's "White" Proxy (another is enclosed) voting
"For" the 'Merger of Equals' and to THROW AWAY all "gold" OR "green" proxies
that you receive from TrustCo. Although each shareholder's vote can only be
counted once, we have been advised to collect as many individual proxies as we
can (from each of you) for security reasons.
The ONLY 'REAL DEAL' for Cohoes & Hudson River
Shareholders is OUR DEAL!
We appreciate your consideration & loyalty and ASSURE you that we will
continue to do our BEST to MAXIMIZE your investment.
With kind personal regards,
/s/ Harry L. Robinson /s/ Carl A. Florio
---------------------------- ----------------------------
Harry L. Robinson Carl A. Florio
President and CEO President and CEO
Cohoes Bancorp Hudson River Bancorp
- VERY IMPORTANT -
IF you have any questions about HOW to vote "FOR" the Cohoes/Hudson River
'Merger of Equals', please call our proxy solicitor, Regan & Associates, Inc. at
(800) 737-3426.
As a 'general' rule, our "WHITE" proxy should be returned ONLY in the
prepaid envelope that was supplied to you. IF YOUR SHARES ARE HELD BY A BROKER
OR BANK, it is necessary that your proxy instructions be returned to them FIRST,
so that they can issue a vote on your behalf. YOU MUST RETURN THE
COMPUTER-GENERATED FORM. A VOTE BY TELEPHONE OR THE INTERNET WILL NOT BE VALID.
<PAGE>
This letter 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
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 United States Securities and Exchange Commission which includes
the joint merger proxy statement/prospectus being provided to shareholders. In
addition, Hudson River and Cohoes each intend to file a Solicitation/
Recommendation statement with the United States Securities and Exchange
Commission in response to the Tender Offer Statement to be filed by TrustCo Bank
Corp NY. WE URGE INVESTORS TO READ THESE DOCUMENTS BECAUSE THEY CONTAIN
IMPORTANT INFORMATION. Investors are currently able to obtain the Form S-4
Registration Statement and will be able to obtain the
Solicitation/Recommendation Statement of each company when filed, free of charge
at the SEC's website, www.sec.gov. In addition, documents filed with the SEC by
Cohoes are 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 are available free of charge from the Secretary of
Hudson River at One Hudson City Centre, Hudson, New York 12534, telephone (518)
828-4600.
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 THROUGH
THE SEC'S WEBSITE FROM THE S-4 REGISTRATION STATEMENT AND DOCUMENTS FILED UNDER
RULE 425 FILED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION ON JUNE
26, 2000, AS AMENDED, AND JULY 20, 2000, RESPECTIVELY.
<PAGE>
[Set forth below is a corrected table from page 17 of the Joint Proxy
Statement/Prospectus of Hudson River Bancorp, Inc. and Cohoes Bancorp, Inc.,
dated July 3, 2000. This information is being provided to correct printing
errors in the original document.]
The table below sets forth the comparative data as of and for the twelve months
ended March 31, 2000. For Cohoes, the data below is as of and for the twelve
months ended December 31, 1999.
Hudson
River Cohoes Regional Highly
Bancorp Bancorp Group Valued
---------- -------- ----------- ----------
Total assets $1,149,547 $708,884 $1,090,996 $1,248,561
Annual growth rate of total assets 30.46% (.05)% 8.02% 10.10%
Tangible equity/assets 16.45% 18.34% 7.97% 6.01%
Intangible assets/total equity 5.79% 0.00% 1.52% 1.12%
Net loans/total assets 69.96% 80.00% 65.64% 66.25%
Cash & securities/total assets 23.68% 17.57% 31.02% 30.56%
Gross loans/total deposits 110.06% 119.88% 97.98% 99.99%
Total borrowings/total assets 13.16% 12.50% 21.25% 25.68%
Non-performing assets/total assets 1.04% 0.74% 0.47% 0.48%
Loan loss reserve/gross loans 2.38% 0.78% 1.17% 1.08%
Net interest margin 4.83% 4.14% 3.27% 3.11%
Loan loss provision/average assets 0.62% 0.28% 0.12% 0.08%
Non-interest income/average assets 0.25% 0.43% 0.36% 0.48%
Non-interest expense/average assets 2.80% 2.55% 2.13% 2.27%
Efficiency ratio 52.77% 59.36% 59.02% 54.10%
Return on average assets 0.96% 0.92% 0.97% 1.09%
Return on average equity 4.58% 4.47% 10.43% 15.69%
Price/tangible book value per share 70.01% 67.66% 117.31% 155.04%
Price/earnings per share 14.71x 15.97x 9.17x 9.53x
Dividend yield 1.25% 1.79% 1.52% 3.62%
Dividend payout ratio 18.46% 26.09% 23.12% 32.25%
<PAGE>
PARTICIPANTS IN HUDSON RIVER'S
STOCKHOLDER SOLICITATION
The following table sets forth the names, principal occupations,
business addresses and the numbers of shares of common stock of Hudson River
Bancorp, Inc. (the "Company") beneficially owned by the directors of the Company
and Hudson River Bank & Trust Company (the "Bank") and such other officers and
associates of such directors and officers, as may be deemed participants in this
proxy solicitation under federal securities laws (together the "Participants").
Name, Occupation and Address Shares Owned
Earl Schram, Jr., Chairman of the Board 140,669
Attorney and President of
Connor, Curran & Schram, P.C.
441 East Allen Street
Hudson, NY 12534
Carl A. Florio, President & CEO; Director 155,413
Hudson River Bank & Trust Company
One Hudson City Centre
Hudson, NY 12534
Stanley Bardwell, M.D., Director 35,117
Retired Physician
770 Snydertown Road
Craryville, NY 12521
William E. Collins, Director 29,274
Retired President & CEO of
Hudson City Savings Institution
PO Box 804
North Chatham, NY 12132
Joseph Giaquinto, Director 14,699
Retired President & CEO of SFS Bancorp, Inc.
16 Glorious Lane
Scotia, NY 12302
Marilyn Herrington, Director 55,843
Real Estate Developer
Ed Herrington, Inc.
Route 23
Hillsdale, NY 12529
William H. Jones, Director 32,471
President and Publisher of
Roe Jan Independent Publishing Co., Inc.
PO Box 246
Hillsdale, NY 12529
Joseph W. Phelan, Director 36,043
President of
Taconic Farms, Inc.
273 Hover Avenue
Germantown, NY 12526
Marcia M. Race, Director 11,543
Retired Assistant to the President
Hudson City Savings Institution
3459 Route 9
Hudson, NY 12534
<PAGE>
Timothy E. Blow, CPA 45,553
Chief Financial Officer
Hudson River Bank & Trust Company
One Hudson City Centre
Hudson, NY 12534
Sidney D. Richter 84,893
Executive Vice President, Senior Lending Officer
Hudson River Bank & Trust Company
One Hudson City Centre
Hudson, NY 12534
Carol Dube 3,514
Senior Vice President, Operations
Hudson River Bank & Trust Company
One Hudson City Centre
Hudson, NY 12534
Richard J. Malena --
Senior Vice President, Retail Banking
Hudson River Bank & Trust Company
One Hudson City Centre
Hudson, NY 12534
David J. Jurczynski 1,446
Vice President of Finance & Risk Management
Hudson River Bank & Trust Company
One Hudson City Centre
Hudson, NY 12534
James McDonald 7,935
Chief Investment Officer
Hudson River Bank & Trust Company
One Hudson City Centre
Hudson, NY 12534
Lawrence J. Longo, Jr. 20,509
Vice President of Mortgage Originations
Hudson River Bank & Trust Company
One Hudson City Centre
Hudson, NY 12534
James Mackerer 11,871
Vice President of Commercial Lending &
Facilities
Hudson River Bank & Trust Company
One Hudson City Centre
Hudson, NY 12534
Total 686,793
<PAGE>
None of the Participants has been convicted in a criminal proceedings
(excluding traffic violations or similar misdemeanors) during the past ten
years. No Participants own any shares of common stock of record but not
beneficially. No Participants own any securities of any subsidiary of the
Company.
During the past two years, none of the Participants has borrowed or
otherwise obtained funds for the purpose of acquiring or holding any securities
of the Company, except for Messrs. Richter and Giaquinto whose outstanding
indebtedness for the purchase of Company common stock as of July 17, 2000 was
$73,500 and $0, respectively.
None of the Participants has any substantial direct or indirect
interest in any matters to be acted upon at the Meeting, except as set forth in
the Company's Joint Proxy Statement/Prospectus dated July 3, 2000 under the
heading "The Merger --Interests of Directors and Officers in the Merger that are
Different from Your Interests," filed with the SEC in a Registration Statement
on Form S-4 on June 26, 2000, as amended on June 30, 2000.
During the past two years, the following Participants effected the
purchases and sales of Company common stock as set forth below:
Mr. Schram acquired 110,000 shares on July 1, 1998 at $10.00 per
share, 1,000 shares on January 27, 1999 at $11.875 per share, 1,000 shares
on April 27, 1999 at $10.125 per share, 2,000 shares on October 26, 1999 at
$11.00 per share, and 1,000 shares on December 10, 1999 at $10.125 per
share;
Mr. Florio purchased 50,835 shares on July 1, 1998 at $10.00 per
share, 2,000 shares on August 5, 1998 at $13.0625 per share, 2,000 shares
on August 5, 1998 at $13.125 per share, 1,150 shares on October 29, 1998 at
$10.0625 per share, 800 shares on October 29, 1998 at $10.125 per share,
3,000 shares on January 29, 1999 at $11.875 per share, 2,000 shares on
April 27, 1999 at $10.125 per share, 1,000 shares on July 26, 1999 at
$11.69 per share, 250 shares on October 26, 1999 at $11.0625 per share, 750
shares on October 27 at $11.00 per share, 1,000 shares on December 10, 1999
at $10.875 per share, and 500 shares on May 8, 2000 at $9.6875 per share;
Dr. Bardwell purchased 24,574 shares on July 1, 1998 at $10.00 per
share and 500 shares on October 23, 1998 at $10.00 per share;
Mr. Collins purchased 17,500 shares on July 1, 1998 at $10.00 per
share and 1,000 shares on August 7, 1998 at $13.25 per share;
Mr. Collins sold 1,000 shares on July 29, 1999 at $11.6875 per share
and 500 shares on October 28, 1999 at $10.9375 per share;
Mr. Giaquinto purchased 4,699 shares on July 1, 1998 at $10.00 per
share and 10,000 shares on July 1, 1998 at $12.625 per share;
Ms. Herrington purchased 45,000 shares on July 1, 1998 at $10.00 per
share and 800 shares on November 30, 1998 at $10.00 per share;
Mr. Jones purchased 22,428 shares on July 1, 1998 at $10.00 per share;
Mr. Phelan purchased 25,000 shares on July 1, 1998 at $10.00 per share
and 1,000 shares on May 2, 1999 at $10.50 per share;
Ms. Race purchased 1,500 shares on July 1, 1998 at $10.00 per share;
Mr. Blow purchased 1,658 shares on July 1, 1998 at $12.0625 per share
and 475 shares on July 22, 1999 at $10.31 per share;
Mr. Richter purchased 32,406 shares on July 1, 1998 at $10.00 per
share, 1,000 shares on October 26, 1998 at $10.00 per share, 900 shares on
October 22, 1998 at $10.00 per share, 700 shares on October 29, 1998 at
$10.00 per share, 1,650 shares on May 3, 1999 at $10.50 per share, 600
shares on October 25, 1999 at $11.00 per share, 1,000 shares on December
16, 1999 at $10.1875 per share, 200 shares on January 3, 2000 at $10.18 per
share, 500 shares on January 3, 2000 at $10.00 per share, 200 shares on
January 3, 2000 at $ 9.78 per share and 500 shares on May 12, 2000 at $9.16
per share;
Ms. Dube purchased 25 shares on July 1, 1998 at $10.00 per share;
Mr. Jurczynski purchased 550 shares on July 1, 1998 at $12.625 per
share;
Mr. McDonald purchased 8,221 shares on July 1, 1998 at $10.00 per
share;
Mr. McDonald sold 2,000 shares on March 20, 2000 at $10.19375 per
share;
Mr. Mackerer purchased 13,200 shares on July 1, 1998 at $10.00 per
share;
Mr. Mackerer sold 300 shares on March 2, 2000 at $10.25 per share;
Mr. Longo purchased 5,000 shares on July 1, 1998 at $10.00 per share;
Mr. Longo sold 357 shares on February 29, 2000 at $9.75 per share.
In addition, Messrs. Florio, Blow, Richter, Ms. Dube, and Messrs.
Jurczynski, McDonald, Longo, and Mackerer have, during the past two years,
acquired beneficial ownership of shares of common stock through their
participation in the Company's Employee Stock Ownership Plan (the "ESOP"). Share
allocations under the ESOP to Messrs. Florio, Blow, Richter, Ms. Dube, Messrs.
Jurczynski, McDonald, Longo, and Mackerer for the plan years ended March 31,
2000 and 1999 were 2,704 shares and 2,386 shares; 1,851 shares and 1,494 shares;
2,189 shares and 1,804 shares; 1,011 shares and 792 shares; 714 shares and 0
shares; 1,067 shares and 0 shares; 1,135 shares and 934 shares; 1,355 shares and
997 shares, respectively.
<PAGE>
The following Participants have been granted options to purchase common
stock under the Hudson River Bancorp, Inc. 1998 Stock Option and Incentive Plan,
as set forth below:
Mr. Schram - granted on January 5, 1999 a ten-year option to purchase
62,488 shares of common stock at an exercise price of $11.50 per share,
vesting 20% annually beginning January 5, 2000;
Messrs. Bardwell, Collins, Jones, Phelan, Ms. Herrington and Ms. Race
- each granted on January 5, 1999 a ten-year option to purchase 39,055
shares of common stock at an exercise price of $11.50 per share, vesting
20% annually beginning January 5, 2000;
Mr. Florio - granted on January 5, 1999 a ten-year option to purchase
312,441 shares of common stock at an exercise price of $11.50 per share,
vesting 20% annually beginning January 5, 2000;
Messrs. Blow and Richter - each granted on January 5, 1999 a ten-year
option to purchase 149,972 shares of common stock at an exercise price of
$11.50 per share, vesting 20% annually beginning January 5, 2000;
Ms. Dube and Messrs. Longo and Mackerer - each granted on January 5,
1999 a ten-year option to purchase 4,686 shares of common stock at an
exercise price of $11.50 per share, vesting 20% annually beginning January
5, 2000;
Mr. McDonald - granted on February 1, 1999 a ten-year option to
purchase 2,343 shares of common stock at an exercise price of $11.50 per
share, vesting 20% annually beginning February 1, 2000;
Ms. Dube - granted on January 6, 2000 a ten-year option to purchase
25,314 shares of common stock at an exercise price of $9.875 per share,
vesting 20% annually beginning January 6, 2001;
Mr. Malena - granted on January 6, 2000 a ten-year option to purchase
30,000 shares of common stock at an exercise price of $9.875 per share,
vesting 20% annually beginning January 6, 2001; and
Mr. Jurczynski - granted on January 6, 2000 a ten-year option to
purchase 4,686 shares of common stock at an exercise price of $9.875 per
share, vesting 20% annually beginning January 6, 2001.
The following Participants have been awarded shares of restricted stock
under the Hudson River Bancorp, Inc. 1998 Management Recognition and Retention
Plan, as set forth below:
Mr. Schram - awarded on January 5, 1999, 35,708 restricted shares of
common stock, vesting 10% annually beginning January 5, 2000;
Messrs. Bardwell, Jones, Phelan, Ms. Herrington and Ms. Race - each
awarded on January 5, 1999, 22,317 restricted shares of common stock,
vesting 10% annually beginning January 5, 2000;
Mr. Collins - awarded on January 5, 1999, 22,317 restricted shares of
common stock, vesting 20% annually beginning January 5, 2000;
Mr. Florio - awarded on January 5, 1999, 175,538 restricted shares of
common stock, vesting 10% annually beginning January 5, 2000;
Messrs. Blow and Richter, each awarded on January 5, 1999, 85,698
restricted shares of common stock, vesting 10% annually beginning January
5, 2000;
Ms. Dube and Messrs. Longo and Mackerer, each awarded on January 5,
1999, 3,571 restricted shares of common stock, vesting 10% annually
beginning January 5, 2000;
Mr. McDonald, awarded on February 1, 1999, 1,785 restricted shares of
common stock, vesting 10% annually beginning February 1, 2000;
Ms. Dube, awarded on January 6, 2000, 11,429 restricted shares of
common stock, vesting 10% annually beginning January 6, 2001;
Mr. Malena, awarded on January 6, 2000, 500 restricted shares of
common stock, vesting 50% annually beginning January 6, 2001; and
Mr. Jurczynski, awarded on January 6, 2000, 3,571 restricted shares of
common stock, vesting 10% annually beginning January 6, 2001.
In addition, Messrs. Florio, Blow, Richter, Ms. Dube, and Messrs.
Jurczynski, Longo, and Mackerer have, during the past two years, acquired
beneficial ownership of shares of common stock through their participation in
the Employer Stock Fund of the Hudson City Savings Institution 401(k) Savings
Plan in RSI Retirement Trust (the "Employer Stock Fund"). Shares acquired in the
Employer Stock Fund by Messrs. Florio, Blow, Richter, Ms. Dube, Messrs.
Jurczynski, Longo, and Mackerer through June 20, 2000 were 3,696 shares; 1,582
shares; 13,560 shares; 388 shares; 182 shares; 12,503 shares; and 2,725 shares,
respectively.
Other than the stock option and restricted stock awards discussed above
and the participation by Messrs. Florio, Blow, Richter, Ms. Dube, and Messrs.
Jurczynski, McDonald, Longo and Mackerer in the ESOP, no Participant is, or was
within the past year, a party to any contract, arrangement or understanding with
any person with respect to any securities of the Company.
Except as set forth in the Company's Joint Proxy Statement/Prospectus
dated July 3, 2000, under the heading "The Merger -- Interests of Directors and
Officers in the Merger that are Different from Your Interests," none of the
Participants has any arrangement or understanding with respect to any future
employment by the Company or its subsidiaries or any future transactions to
which the Company or any of its subsidiaries will or may be a party, nor any
material interest, direct or indirect, in any transaction which has occurred
since April 1, 1999 or any currently proposed transaction, or series of similar
transactions, to which the Company or any of its subsidiaries was or is to be a
party and in which the amount involved exceeds $60,000.
