HUBCO INC, 10-K, 1995-03-31

HUBCO INC
10-K, 1995-03-31
STATE COMMERCIAL BANKS

Previous: FIRST CAPITAL INCOME PROPERTIES LTD SERIES VIII, 10-K, 1995-03-31

Next: LEGG MASON TAX EXEMPT TRUST INC, 485B24E, 1995-03-31

===============================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549

------------

FORM l0-K

/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]

For the fiscal year ended December 31, 1994

/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period from ______________ to ___________________

Commission file number 0-l0699

HUBCO, INC.
-------------------
(Exact name of registrant as specified in its Charter)

New Jersey 22-2405746
-------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.

1000 MacArthur Blvd.
Mahwah, New Jersey 07430
-------------- ------------------
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (201) 236-2600

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

None

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

Common Stock, no par value Series A Preferred Stock
-------------- --------------
(Title of Class) (Title of Class)

Indicate by check mark whether the registrant (l) has filed all reports
required to be filed by Section l3 or l5(d) of the Securities Exchange Act of
l934 during the preceding l2 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES [X] NO [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ X ]

The aggregate market value of the voting stock held by non-affiliates
of the Registrant, as of March 16, 1995 was $141,613,394.

The number of shares of Registrant's Common Stock, no par value,
outstanding as of March 16, 1995 was 9,750,233.

===============================================================================
<PAGE>

DOCUMENTS INCORPORATED BY REFERENCE

Part(s) Into
Documents Which Incorporated
------------- ---------------------
Registrant's Annual Report to Part I
Shareholders for the fiscal year Part II
ended December 31, 1994 ("HUBCO's
1994 Annual Report"), pages 6
through 36

Registrant's Proxy Statement which
is expected to be filed within 120
days of fiscal year-end 1994 to be
used in connection with the Annual
Meeting of Shareholders which is
anticipated to be held June 1,
1995 (HUBCO's Proxy Statement for
its 1995 Annual Meeting) under the
captions "Proposal 2--Election of
Directors", "Executive
Compensation", "Stock Ownership of
Management and Principal
Shareholders", "Compensation
Committee Interlocks and Insider
Participation" and "Certain
Transactions with Management".
Notwithstanding the foregoing, the
information contained in HUBCO's
Proxy Statement for its 1995 Annual
Meeting pursuant to Items 402(k) and
402(1) of Regulation S-K is not
incorporated by reference and is not
to be deemed part of this report. Part III

With the exception of information specifically incorporated by
reference, HUBCO's 1994 Annual Report and HUBCO's Proxy Statement for its 1995
Annual Meeting are not to be deemed part of this report.

-3-

<PAGE>

HUBCO, INC.

Form l0-K Annual Report
For The Fiscal Year Ended December 31, 1994

PART I

ITEM 1. BUSINESS

(a) General Development of Business.

HUBCO, Inc. ("HUBCO" or "Registrant" or the "Company") is a bank holding
company registered under the Bank Holding Company Act of 1956, as amended (the
"Bank Holding Company Act"). HUBCO was organized under the laws of New Jersey in
1982 by Hudson United Bank for the purpose of creating a bank holding company
for Hudson United Bank. HUBCO directly owns Hudson United Bank ("the Bank") and
a second subsidiary, HUB Financial Services, Inc. HUBCO is also the indirect
owner, through Hudson United Bank of an investment subsidiary and an inactive
subsidiary. Each of HUBCO's direct and indirect subsidiaries is described below
in this Item 1.

Growth of Hudson United Bank

Hudson United Bank was incorporated in 1890 as a state-chartered commercial
bank. The bank took on its present name in a merger with United National Bank of
Bergen County in 1972. In 1975, Hudson United Bank acquired an additional branch
when it purchased Peoples Trust Company of Dunellen. In 1981, the bank sold one
of its branches in Bloomfield, New Jersey. In 1983, the bank acquired another
branch when it assumed the deposits and purchased certain assets of Pan American
National Bank from the Federal Deposit Insurance Corporation ("FDIC") and began
operating the former Pan American National Bank office in Union City, New Jersey
as a branch of Hudson United Bank. Additional branches were opened in West New
York, North Bergen, and Edgewater, New Jersey in 1986, 1988 and 1990,
respectively.

Since October 1990, HUBCO has engaged in a series of acquisitions, which
are briefly described below. As of the filing of this Form 10-K, the Company has
two substantial acquisitions pending. In November 1994, the Company and the Bank
agreed to acquire Jefferson National Bank ("Jefferson") under an Agreement and
Plan of Merger (the "Agreement"), pursuant to which Jefferson will merge with
and into Hudson United Bank. Under the terms of the Agreement, Jefferson
shareholders will receive 2.844 shares of HUBCO Common stock for each share of
Jefferson Common stock which they own, subject to certain collar provisions
which will apply in the event that HUBCO's average selling price (during a
specific period prior to the effective date of the merger) falls below or
increases above a specified range and subject to adjustment for certain other
events. The transaction will result in the issuance of approximately 610,000 new
shares. At December 31, 1994, Jefferson reported total assets, deposits and
stockholders equity of $91,647,000, $85,376,000 and $5,445,000, respectively.
The

-4-
<PAGE>

transaction is subject to, among other things, Jefferson stockholders' and
various regulatory approvals. The acquisition will be accounted for using the
pooling of interests method of accounting and is expected to be finalized prior
to April 30, 1995.

On February 14, 1995, the Company entered into a definitive agreement with
Urban National Bank ("Urban") pursuant to which Urban will be merged with and
into the Bank. Under the terms of the agreement, shareholders of Urban will
receive 2.17 shares of HUBCO common stock in exchange for each of the 984,372
Urban shares outstanding, subject to adjustment in certain circumstances. The
exchange ratio will be adjusted downward in the event that the Closing
Shareholders' Equity of Urban, as defined in the agreement, falls below
$11,795,000. The agreement further provides that Urban may terminate the
transaction in the event that the exchange ratio, as adjusted, is less than 2.0,
the Average Closing Price of HUBCO common stock, as defined in the agreement, is
less than $12.75 per share, or if the exchange ratio multiplied by the Average
Closing Price of the HUBCO common stock yields an amount less than $26.65. At
December 31, 1994 Urban reported total assets, deposits and stockholders' equity
of $241,324,000, $206,435,000 and $11,795,000, respectively. Consummation of the
merger is subject to several conditions, including that the transaction qualify
as a pooling of interests for accounting purposes and that the parties receive
all necessary regulatory approvals.

The Company's acquisition philosophy is to seek in-market or contiguous
market opportunities which can be accomplished with little dilution to earnings.
Since October 1990, the Company has acquired the assets and liabilities of nine
institutions, adding to its assets and liabilities a total of $1,231.8 million
in assets and $1,188.1 million in liabilities and expanding its branch network
from 15 branches to 45 branches. Over 60% of these assets and liabilities were
acquired through government assisted transactions which allow the Bank to
reprice deposits, review loans and purchase only those loans which meet its
underwriting criteria. The balance of the assets and liabilities were acquired
in traditional negotiated private transactions which the Company believes
present a different level of risk than the risk presented in government assisted
transactions.

-5-

<PAGE>

Summary of Acquisitions

The following chart summarizes the acquisitions undertaken by the Company
since October 1990:

DEPOSITS LOANS
GOVERNMENT PREMIUM ASSUMED PURCHASED BRANCHES
INSTITUTION ASSISTED PAID (IN MILLIONS) (IN MILLIONS) ACQUIRED
----------- --------- ------- ------------- ------------- --------
<S> <C> <C> <C> <C> <C>
Mountain Ridge State Bank ........................ Yes $ 325,000 $ 47.0 $ 12.0 1
Meadowlands National Bank ........................ No $ 415,000(1) $ 35.5 $ 22.1 3
Center Savings and Loan Association .............. Yes $ 10,000 $ 89.9 $ 78.6 1
Irving Savings and Loan Association .............. Yes $ 5,000 $161.1 $ 62.4 5
Broadway Bank and Trust Company .................. Yes $ 3,406,000 $345.7 $ 9.5 8
Pilgrim State Bank ............................... No $ 6,000,000(2) $122.9 $ 46.7 6
Polifly Savings Bank ............................. Yes $ 6,180,000 $104.4 $ .5 4
Washington Savings Bank .......................... No $40,500,000(3) $237.8 $168.5 8
Shoppers Charge Accounts ......................... No $16,300,000(4) -- $ 55.6 --

</TABLE>
----------
(1) Represents the purchase price paid to the shareholders of Meadowlands
National Bank.

(2) Represents the amount paid as purchase price to Ramapo, the owner of the
assets immediately prior to closing.

(3) Represents the purchase price paid to the shareholders of Washington
Savings Bank.

(4) Represents the purchase price paid to the shareholders of the Shoppers
Charge Accounts Co.

The Company's profitability and its financial condition may be
significantly impacted by the continuing implementation of its acquisition
strategy and by the consummation of the acquisition of Jefferson and the
acquisition of Urban.

The Company intends to continue to seek acquisition opportunities that
arise in its market area. There can be no assurance that the Company will be
able to acquire additional financial institutions or, if additional financial
institutions are acquired, that these acquisitions will be managed successfully
to enhance the profitability of the Company.

On November 8, 1993, the Company's Board of Directors authorized a
stock repurchase plan and authorized management to repurchase up to 10% of its
outstanding common stock per year beginning immediately. At that time, the
Company had approximately 6.9 million shares outstanding. As of March 1, 1995,
the Company had repurchased 572,081 shares at a cost of $12,498,898, of which
48,600 shares have been reissued by the Company as awards under its restricted
stock plan.

On January 14, 1994, the Company sold $25 million aggregate principal
amount of subordinated debt in a private placement. The subordinated debentures
bear interest at 7.75% per annum payable semi-annually. The debentures mature in
2004 (i.e., ten years after the date of original issuance) and payment of the
principal of the debentures may be accelerated only upon the bankruptcy or
insolvency of the Company or its major banking subsidiary. The debt was issued
under an indenture intended to comply with the terms and conditions of the Trust
Indenture Act of 1939 and the Company registered the subordinated debt with the
SEC in May 1994, in an exchange offer for registered securities. The
subordinated debt has been structured to comply with the current rules of

-6-

<PAGE>

the Board of Governors of the Federal Reserve System regarding debt which
will qualify as Tier 2 capital under the FRB capital adequacy rules. It may also
be invested in the banking subsidiary as Tier I capital. The Company sold the
debt as part of a long term strategy to raise capital and did not need the
additional capital or funds raised to pay for existing acquisitions. The Company
intends to use the net proceeds from the sale of the subordinated debt for
general corporate purposes, including investments in and advances to the
Company's subsidiaries, and for financing possible future acquisitions of
deposits and banking assets. Pending such use, the Company or its subsidiaries
may temporarily invest the net proceeds in investment grade securities.

In April 1994, the Company finalized its purchase of a new corporate
headquarters in Mahwah, New Jersey. The 64,350 square foot facility was
renovated during the year and, as of March 1995, houses the executive offices of
the Company and the Company's data processing subsidiary.

Other Subsidiaries

HUBCO has a second directly-owned subsidiary called HUB Financial Services,
Inc., a data processing subsidiary formed in January 1983, which had primarily
serviced automobile and equipment leases for Hudson United Bank, on a fee basis.
In May 1994, the Bank's deposit service and MIS functions were transferred to
HUB Financial Services, Inc, which will service the Bank's data processing and
check processing needs and will offer its services to smaller banks in the New
York and New Jersey area.

In 1984, Hudson United Bank established a subsidiary corporation in
Delaware to manage a portion of its investment portfolio and had contributed
$20,033,509 of its investment portfolio to the corporation as of December 31,
1992. In February 1993, the assets of the Delaware Corporation were transferred
up to its parent, Hudson United Bank, in the form of a dividend and the
subsidiary was dissolved. In 1987, Hudson United Bank established a subsidiary
corporation in New Jersey to manage a portion of its investment portfolio and to
operate under state tax law as an investment company. As of December 31, 1994,
$378,489,114 of the Bank's investment portfolio is being managed by the New
Jersey corporation. Hudson United Bank also owns an inactive subsidiary,
Lafayette Development Corp.

Unionization of Hudson United Bank

Hudson United Bank is administratively divided into four administrative
regions: the Bergen, Hudson, Passaic and Essex regions. Thirteen branches,
primarily in the Hudson region, of Hudson United Bank are unionized. Local 153
of the Office and Professional Employees International Union represents the
Bank's clerical staff in the Southern Division's bargaining unit. In February
1993, a three-year collective

-7-

<PAGE>

bargaining agreement was negotiated which provides for a modest increase in
wages, an increase in hours of employment, contributions towards the cost of
providing health care benefits and an increase in the annual pension benefit for
employees with more than three years of service who were employed as of March 1,
1990. Currently, approximately 56% of the employees in the bargaining unit are
members of the union. The collective-bargaining agreement expires February 28,
1996.

Regulatory Matters

There are a variety of statutory and regulatory restrictions governing the
relations among HUBCO and its subsidiaries:

Capital Adequacy Guidelines

Bank holding companies must comply with the Federal Reserve Board's
risk-based capital guidelines, which became effective on February 15, 1989 and
were fully phased-in on December 31, 1992. Under the guidelines, risk weighted
assets are calculated by assigning assets and certain off-balance sheet items to
broad risk categories. The total dollar value of each category is then weighted
by the level of risk associated with that category. As of December 31, 1992,
minimum risk-based capital to risk based assets ratio of 8.00% must be attained.
At least one half of an institution's total risk based capital must consist of
Tier 1 capital, and the balance may consist of Tier 2, or supplemental, capital.
Tier 1 capital consists primarily of common stockholder's equity along with
preferred or convertible preferred stock, minus goodwill. Tier 2 capital
consists of an institution's allowance for loan and lease losses, subject to
limitation, hybrid capital instruments and certain subordinated debt. The
allowance for loan and lease losses which is considered Tier 2 capital is
limited to l.25% of an institution's risk-based assets. As of December 31, 1994,
HUBCO's total risk-based capital ratio was 16.71% consisting of a Tier 1 ratio
of 12.08% and a Tier 2 ratio of 4.63%. Both ratios exceed the requirements under
these regulations.

In addition, the Federal Reserve Board has promulgated a leverage capital
standard, with which bank holding companies must comply. Bank holding companies
must maintain a minimum Tier l capital to total assets ratio of 3%. However,
institutions which are not among the most highly rated by federal regulators
must maintain a ratio 100-to-200 basis points above the 3% minimum. As of
December 31 1994, HUBCO had a leverage capital ratio of 6.54%.

The FDIC also imposes risk based and leverage capital guidelines on Hudson
United Bank. These guidelines and the ratios to be met are substantially similar
to those imposed by the Federal Reserve Board. If a bank does not satisfy the
FDIC's capital requirements, it will be deemed to be operated in an unsafe and
unsound manner and will be subject to regulatory action. As of December 31,
1994, Hudson United Bank had a risk weighted capital ratio of 12.75% and a
leverage capital ratio of 5.96%. These ratios exceed the requirements under the
FDIC regulations.

-8-

<PAGE>

See also "Management's Discussion and Analysis of Financial Condition and
Results of Operation--Capital".

Restrictions on Dividend Payments

The payment of dividends by the Bank to HUBCO is regulated. Under the New
Jersey Banking Act of 1948, as amended, Hudson United Bank may pay dividends
only out of retained earnings, and out of surplus to the extent that surplus
exceeds 50 percent of stated capital. Under the Financial Institutions
Supervisory Act, the FDIC has the authority to prohibit a state-chartered bank
from engaging in conduct which, in the FDIC's opinion, constitutes an unsafe or
unsound banking practice. Under certain circumstances, the FDIC could claim that
the payment of a dividend or other distribution by a bank to its sole
shareholder constitutes an unsafe or unsound practice.

Restrictions on Transactions Between HUBCO and the Bank

The Banking Affiliates Act of 1982, as amended, severely restricts loans
and extensions of credit by the Bank to HUBCO and HUBCO affiliates (except
affiliates which are banks). In general, such loans must be secured by
collateral having a market value ranging from 100% to 130% of the loan,
depending upon the type of collateral. Furthermore, the aggregate of all loans
from the Bank to HUBCO and its affiliates may not exceed 20% of that Bank's
capital stock and surplus and, singly to HUBCO or any affiliate, may not exceed
l0% of the Bank's capital stock and surplus. Similarly, the Banking Affiliates
Act of 1982 also restricts the Bank in the purchase of securities issued by, the
acceptance from affiliates of loan collateral consisting of securities issued
by, the purchase of assets from, and the issuance of a guarantee or standby
letter-of-credit on behalf of, HUBCO or any of its affiliates.

Holding Company Supervision

Under the Bank Holding Company Act, HUBCO may not acquire directly or
indirectly more than 5 percent of the voting shares of, or substantially all of
the assets of, any bank without the prior approval of the Federal Reserve Board.
HUBCO cannot acquire any bank located outside New Jersey unless the law of such
other state specifically permits the acquisition.

In general, the Federal Reserve Board, under its regulations and the Bank
Holding Company Act, regulates the activities of bank holding companies and
non-bank subsidiaries of banks. The regulation of the activities of banks,
including bank subsidiaries of bank holding companies, generally has been left
to the authority of the supervisory government agency, which for Hudson United
Bank is the Federal Deposit Insurance Corporation ("FDIC") and the New Jersey
Department of Banking (the "Department").

-9-

<PAGE>

Interstate Banking Authority

New Jersey law allows New Jersey banking organizations to acquire or be
acquired by banking organizations in other states on a "reciprocal" basis (i.e.,
provided the other state's laws permit New Jersey banking organizations to
acquire or be acquired by banking organizations in that state on substantially
the same terms and conditions applicable to banking acquisitions solely within
the state).

FIRREA

The Financial Institutions Reform, Recovery and Enforcement Act of 1989
("FIRREA") established new capital standards and enhanced regulatory oversight
of the thrift industry. Many thrifts were unable to comply with the new
regulations creating opportunities for mergers and acquisitions by commercial
banks as well as other thrift institutions. From time to time, HUBCO
investigates potential opportunities that arise as the result of this
legislation and the enforcement of regulations promulgated thereunder.

While FIRREA focuses primarily on the recovery and reform of the savings
and loan industry, there are provisions which affect commercial banks. Such
provisions include a new deposit insurance system, increased deposit insurance
premiums, restrictions on acceptance of brokered deposits and increased
consumer-related disclosure requirements.

FDICIA

The Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA") was enacted in December 1991. FDICIA was primarily designed to
provide additional financing for the FDIC by increasing its borrowing ability.
The FDIC was given the authority to increase deposit insurance premiums to repay
any such borrowing. In addition, FDICIA identifies the following capital
standard categories for financial institutions: well capitalized, adequately
capitalized, undercapitalized, significantly undercapitalized and critically
undercapitalized. As a result of FDICIA, the various banking regulatory agencies
have set certain capital and other measures for determining the categories into
which financial institutions fall. FDICIA imposes progressively more restrictive
constraints on operations, management and capital distributions depending on the
category in which an institution is classified. Pursuant to FDICIA,
undercapitalized institutions must submit recapitalization plans, and a company
controlling a failing institution must guarantee such institution's compliance
with its plan. FDICIA also required the various regulatory agencies to prescribe
certain non-capital standards for safety and soundness relating generally to
operations and management, asset quality and executive compensation, and permits
regulatory action against a financial institution that does not meet such
standards. The agencies have implemented some of those regulations and have
proposed to implement others.

Interstate Banking and Branching Act

The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994
(the "Interstate Banking and Branching Act") passed by Congress and signed into
law on September 29, 1994, significantly changed interstate banking rules.
Pursuant to the Interstate Banking and Branching Act, a bank holding company
will be able to acquire banks in states other than its home state beginning
September 29, 1995, regardless of applicable state law. Until such provisions
are effective, interstate acquisitions by bank holding companies will continue
to be subject to current state law restrictions.

The Interstate Banking and Branching Act also authorizes banks to merge
across state lines, thereby creating interstate branches, beginning June 1,
1997. Under such legislation, each state has the opportunity either to "opt out"
of this provision, thereby prohibiting interstate branching in such states, or
to "opt in" at an earlier time, thereby allowing interstate branching within
that state prior to June 1, 1997. Furthermore, a state may "opt-in" with respect
to de novo branching, thereby permitting a bank to open new branches in a state
in which the bank does not already have a branch. Without de novo branching, an
out-of-state bank can enter the state only by acquiring an existing bank.

The New Jersey legislature is presently examining whether it will opt-in
with respect to earlier interstate banking and branching, as well as whether it
will authorize de novo branching and the entry into New Jersey of foreign banks.
New Jersey law presently prohibits foreign banks from entering New Jersey unless
the foreign bank first acquired a domestic bank in another state.

Proposals to change the laws and regulations governing the banking industry
are frequently introduced in Congress, in the state legislatures and before the
various bank regulatory agencies. The likelihood and timing of any such changes
and the impact such changes might have on the Bank cannot be determined at this
time.

-10-

<PAGE>

The deposits of the Bank are insured up to applicable limits by the FDIC.
The Bank is subject to deposit insurance assessments to maintain the Bank
Insurance Fund (the "BIF") of the FDIC on 85.9% of its deposits and subject to
deposit insurance assessments to maintain the Savings Association Insurance Fund
(the "SAIF") for 14.1% of its deposits. As of January 1, 1993, the FDIC began a
risk-based insurance assessment system. This approach is designed to ensure that
a banking institution's insurance assessment is based on three factors: the
probability that the applicable insurance fund will incur a loss from the
institution; the likely amount of the loss; and the revenue needs of the
insurance fund. Management believes that the provision of FDICIA and the
risk-based insurance assessment will not have a material effect upon the
financial position of HUBCO.

Source of Strength Doctrine

According to Federal Reserve Board policy, bank holding companies are
expected to act as a source of financial strength to each subsidiary bank and to
commit resources to support each such subsidiary. This support may be required
at times when a bank holding company may not be able to provide such support.
Furthermore, in the event of a loss suffered or anticipated by the FDIC--either
as a result of default of a bank subsidiary of the Company or related to FDIC
assistance provided to the subsidiary in danger of default--the other bank
subsidiaries of the Company may be assessed for the FDIC's loss, subject to
certain exceptions.

(b) Industry Segments.

The Registrant has one industry segment -- commercial banking.

-11-

<PAGE>

HUBCO exists primarily to hold the stock of its subsidiaries. During 1994,
HUBCO had two directly-owned subsidiaries -- Hudson United Bank and HUB
Financial Services, Inc. In addition, HUBCO, through Hudson United Bank,
indirectly owns two additional subsidiaries. The historical growth of, and
regulatory scheme affecting, each of HUBCO's direct and indirect subsidiaries is
described in Item 1(a) above, which is incorporated herein by reference.

HUBCO is a legal entity separate from its subsidiaries. The stock of the
Bank is HUBCO's principal asset. Dividends from Hudson United Bank are the
primary source of income for HUBCO. As explained above in Item 1(a), legal and
regulatory limitations are imposed on the amount of dividends that may be paid
by the Bank to HUBCO.

Hudson United Bank currently maintains its head office in Mahwah, New
Jersey. The Bank operates out of 45 offices in six northern New Jersey counties.
Of these offices, all but one are located in the northern New Jersey counties of
Bergen, Essex, Hudson, Morris and Passaic. One other branch is located in
Dunellen, Middlesex County, New Jersey. In April 1994, HUBCO purchased a 64,350
square foot building in Mahwah, New Jersey to serve as its new corporate
headquarters. As of March 1995, the facility houses the executive offices of
HUBCO and the Company's data processing subsidiary, which will service the
Bank's data processing and check processing needs and will offer its services to
smaller banks in the New York and New Jersey area.

At December 31, 1994, HUBCO through its subsidiaries had deposits of
$1,199,733,236, net loans of $715,946,378 and total assets of $1,377,122,486.
HUBCO ranked 8th among New Jersey commercial banks and bank holding companies in
terms of asset size as of December 31, 1994.

The Bank is a full service commercial bank and offers the services
generally performed by commercial banks of similar size and character, including
checking, savings, and time deposit accounts, certificates of deposit, trust
services, safe deposit boxes, secured and unsecured personal and commercial
loans and residential and commercial real estate loans. The principal focus of
the Bank is its local market place.

The Bank's deposit accounts are competitive in the current environment and
include money market accounts and a variety of interest-bearing transaction
accounts.

In the lending area, the Bank primarily engages in consumer lending,
commercial lending and real estate lending activities.

Hudson United Bank offers a variety of trust services. At December 31,
1994, the Trust Department had approximately $103,000,000 of assets under
management or in its custodial control.

-12-

<PAGE>

There are over 100 commercial banks throughout New Jersey, many of which
have offices in Northern New Jersey. In addition, large banks in New York City
compete for the business of New Jersey residents and businesses located in
HUBCO's primary areas of trade. A number of other depository institutions
compete for the business of individuals and commercial enterprises in New Jersey
including savings banks, savings and loan associations, brokerage houses,
financial subsidiaries of the retail industry and credit unions. Other financial
institutions, such as mutual funds, consumer finance companies, factoring
companies, and insurance companies, also compete with HUBCO for both loans and
deposits. Competition for depositors' funds, for creditworthy loan customers and
for trust business is intense.

Despite intense competition with institutions commanding greater financial
resources, the Bank's supply of funds has imposed no substantial impediment to
its normal lending functions. While the Bank is limited to making commercial
loans to a single borrower in an amount not to exceed fifteen percent of its
capital and has a "house limit" significantly below that level, it has, on
occasion, arranged for participation by other banks in larger loan
accommodations.

The Bank has focused on becoming an integral part of the communities it
serves. Officers and employees are trained to meet the needs of their customers
and emphasis is placed on addressing the needs of the local communities served.

HUBCO and its subsidiaries had 571 full-time employees and 108 part-time
employees as of December 31, 1994, compared to 400 full-time and 87 part-time
employees at the end of 1993.

(d) Financial Information about foreign and domestic operations and export
sales.

Not Applicable

-13-

<PAGE>

(e) Executive Officers of the Registrant

The following table sets forth certain information as to each executive
officer of HUBCO who is not a director.

Name, Age and
Position with Officer of Principal Occupation
HUBCO HUBCO Since During Past Five Years
------------- ----------- ----------------------
D. Lynn Van Borkulo- 1988 Executive Vice President, Hudson
Nuzzo, 45 United Bank, Corporate Secretary,
HUBCO.

Christina L. Maier, 41 1987 Assistant Treasurer of HUBCO and
Senior Vice President and
Controller of the Bank.

-14-

<PAGE>

(f) Statistical Disclosure Required Pursuant to Securities Exchange Act,
Industry Guide 3.

The statistical disclosures for a bank holding company required pursuant to
Industry Guide 3 are contained in HUBCO's 1994 Annual Report on pages 8-10 and
14-17, and on the following pages of this Report on Form 10-K:

PAGES(S) OF
ITEM OF GUIDE 3 THIS REPORT
--------------- -----------

II. Investment Portfolio .......................... 16

III. Loan Portfolio ................................ 17-19

IV. Summary of Loan Loss Experience ............... 20-21

V. Deposits ...................................... 22

VI. Return on Equity and Assets ................... 23

VII. Short-Term Borrowings ......................... 24-25

-15-
<PAGE>

HUBCO, Inc. and Subsidiaries

S.E.C. GUIDE 3--ITEM II

INVESTMENT PORTFOLIO

Book Value at End of Each Report Period

December 31,
----------------------------------
1994 1993 1992
---- ---- ----
(In Thousands of Dollars)

U.S. Treasury and Other U.S.
Government Agencies and
Corporations ..................... $497,874 $391,098 $291,377
State and Political Subdivisions ... 23,730 25,652 16,068
Other Securities ................... 5,958 4,833 14,424
Common Stock ....................... 9,667 5,102 592
Preferred Stock .................... 0 0 61
-------- -------- --------
TOTAL ......................... $537,229 $426,685 $322,522
======== ======== ========

Maturities and Weighted Average Yield at End of Latest Reporting Period

<TABLE>
<CAPTION>
MATURING
-----------------------------------------------------------------------------------

After One But After Five But
Within One Year Within Five Years Within Ten Years After Ten Years
------------------ ----------------- ---------------- ----------------
Amount Yield Amount Yield Amount Yield Amount Yield
------ ----- ------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. Treasury and other U.S.
Government Agencies and
Corporations ......................... $43,799 6.55% $352,462 6.39% $40,373 6.43% $61,362 6.10%
States and Political Subdivisions ..... 15,886 5.40 3,092 9.33 2,248 8.23 2,667 9.91
Other Securities ...................... 1,005 9.18 2,872 8.61 796 4.16 1,000 8.85
Common Stock .......................... 9,667 2.01 -- -- -- -- -- --
Preferred Stock ....................... -- -- -- -- -- -- -- --
------- ---- -------- ---- ------- ----- ------- ----
TOTAL ............................. $70,357 5.70% $358,426 6.43% $43,417 6.48% $65,029 6.30%
======= ==== ======== ==== ======= ==== ======= ====

</TABLE>

Weighted average yields on tax-exempt obligations have been computed on a
fully tax-equivalent basis assuming a tax rate of 35 percent.

-16-

<PAGE>

HUBCO, Inc. and Subsidiaries

S.E.C. GUIDE 3--ITEM III

LOAN PORTFOLIO
<TABLE>
<CAPTION>

Types of Loans At End of Each Reported Period

December 31,
------------------------------------------------------------------------
1994 1993 1992 1991 1990
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Commercial, Financial,
and Agricultural .................... $ 80,019 $119,563 $129,550 $132,090 $118,734
Real Estate--Construction ............ 7,326 7,117 3,777 3,108 7,422
Real Estate--Mortgage ................ 524,656 330,018 298,995 257,064 157,558
Installment .......................... 118,633 77,945 86,903 77,334 86,766
Lease Financing ...................... 2,726 122 1,644 6,158 14,258
Foreign .............................. -- -- -- -- --
-------- -------- -------- -------- --------
TOTAL ............................ $733,360 $534,765 $520,869 $475,754 $384,738
======== ======== ======== ======== ========
</TABLE>

-17-

<PAGE>

HUBCO, Inc. and Subsidiaires

S.E.C. GUIDE 3--ITEM III
LOAN PORTFOLIO

The following table shows the maturity of loans (excluding residential
mortgages of 1-4 family residences, installment loans and lease financing)
outstanding as of December 31, 1994. Also provided are the amounts due after one
year classified according to the sensitivity to changes in interest rates.

Maturities and Sensitivity to Changes in Interest Rates
<TABLE>
<CAPTION>
MATURING
------------------------------------------
After One After
Within But Within Five
One Year Five Years Years Total
-------- ---------- ------ --------
<S> <C> <C> <C> <C>
Commercial, Financial,
and Agricultural .................... $ 65,005 $ 3,603 $ 171 $ 68,779
Real Estate Construction ............. 6,881 445 -0- 7,326
Real Estate--Mortgage ............... 73,766 25,599 19,259 118,624
-------- ------- ------- --------
TOTAL ............................. $145,652 $29,647 $19,430 $194,729
======== ======= ======= ========
</TABLE>

INTEREST SENSITIVITY
-------------------------
Fixed Variable
Rate Rate
------- -------
Due After One But Within Five Years .. $23,111 $ 6,535
Due After Five Years ................. 18,970 461
------- -------
TOTAL ............................. $42,081 $ 6,996
======= =======

-18-

<PAGE>

HUBCO, Inc. and Subsidiaries
S.E.C. GUIDE 3--ITEM III
LOAN PORTFOLIO

Nonaccrual, Past Due and Restructured Loans

December 31,
---------------------------------------------------------------------------
1994 1993 1992 1991 1990
---- ---- ---- ---- ----
(In Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
Loans accounted for on
a nonaccrual basis .............. $9,917 $5,534 $4,248 $4,160 $8,224

Loans contractually past
due 90 days or more as
to interest or principal
payments ........................ 2,199 1,443 1,409 1,181 894

Loans whose terms have been
renegotiated to provide a
reduction or deferral of
interest or principal because
of a deterioration in the
financial position of
the borrower ..................... 539 2,177 2,257 3,527 808

</TABLE>

At the end of the reporting period, there were no loans not disclosed under
the preceding two sections where known information about possible credit
problems of borrowers causes management of the Company to have serious doubts as
to the ability of such borrowers to comply with the present loan repayment terms
and which may result in disclosure of such loans in the two preceding sections
in the future.

At December 31, 1994 and 1993, there were no concentrations of loans
exceeding 10% of total loans which are not otherwise disclosed as a category of
loans pursuant to Item III.A. of Guide 3.

-19-

<PAGE>

HUBCO, Inc. and Subsidiaires

S.E.C. GUIDE 3--ITEM IV

SUMMARY OF LOAN LOSS EXPERIENCE

The following is a summary of the activity in the allowance for possible
loan losses, broken down by loan category:

Year Ended December 31,
-------------------------------------------------------------------
1994 1993 1992 1991 1990
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Amount of Loans Outstanding at End of Year ........ $733,360 $534,765 $520,869 $475,754 $384,738
======== ======== ======== ======== ========
Daily Average Amount of Loans ..................... $587,182 $529,340 $520,305 $414,667 $375,123
======== ======== ======== ======== ========
Balance of Allowance for Possible
Loan Losses at Beginning of Year ................ $ 10,811 $ 7,605 $ 6,698 $ 5,232 $ 3,012
Loans Charged Off:
Commercial, Financial and Agricultural .......... (190) (637) (4,622) (2,038) (338)
Real Estate--Construction ....................... -- -- -- -- --
Real Estate--Mortgage ........................... (5,701) (138) (227) (237) (70)
Installment ..................................... (201) (283) (337) (336) (820)
Lease Financing ................................. (13) (122) (355) (364) (1,100)
---------- -------- --------- --------- ---------
Total Loans Charged Off ........................... (6,105) (1,180) (5,541) (2,975) (2,328)
---------- --------- --------- --------- ---------

Recoveries of Loans Previously Charged Off:
Commercial, Financial and Agricultural .......... 531 141 609 185 40
Real Estate--Construction ....................... -- -- -- -- --
Real Estate--Mortgage ........................... 129 59 8 -- --
Installment ..................................... 104 104 57 120 93
Lease Financing ................................. 41 82 158 337 265
-------- -------- -------- -------- --------
Total Recoveries .................................. 805 386 832 642 398
-------- -------- -------- -------- --------
Net Loans Charged Off ............................. (5,300) (794) (4,709) (2,333) (1,930)
Provision Charged to Expense ...................... 3,000 3,600 4,116 2,312 4,150
Additions Acquired Through Acquisitions ........... 4,717 400 1,500 1,487 --
-------- -------- -------- -------- --------
Balance at End of Year ............................ $ 13,228 $ 10,811 $ 7,605 $ 6,698 $ 5,232
======== ======== ======== ======== ========
Ratios
Net Loans Charged Off to Average Loans
Outstanding ................................... .90% .15% .91% .58% .54%
Allowance for Possible Loan Losses to Average
Loans Outstanding ................................ 2.3% 2.0% 1.5% 1.6% 1.4%

</TABLE>

-20-
<PAGE>

HUBCO, Inc. and Subsidiaries

S.E.C. GUIDE 3--ITEM IV

SUMMARY OF LOAN LOSS EXPERIENCE

ALLOWANCE FOR POSSIBLE LOAN LOSSES ALLOCATION
<TABLE>
<CAPTION>

December 31, 1994 December 31, 1993 December 31, 1992
--------------------- --------------------- ----------------------
% of Loans % of Loans % of Loans
In Each In Each In Each
Category To Category To Category To
Amount Total Loans Amount Total Loans Amount Total Loans
------ ----------- ------ ----------- ------ -----------
<S> <C> <C> <C> <C> <C> <C>
Applicable To:

Domestic, Commercial
Financial and
Agricultural ........... $ 2,349 12.99% $3,693 22.36% $3,288 24.87%

Real Estate --
Construction ........... 55 1.00 86 1.33 187 .73

Real Estate --
Mortgage ............... 3,346 69.65 2,896 61.71 1,010 57.40

Installment .............. 256 6.86 469 14.58 1,114 16.68

Lease Financing .......... 10 .29 31 .02 125 .32

Credit Card
Financing .............. 235 9.21 -- -- -- --

Foreign .................. -- -- -- -- -- --

Unallocated .............. 6,977 N/A 3,636 N/A 1,881 N/A
------- ------ ------ ------ ------ ------
TOTAL ................. $10,811 100.00% $7,605 100.00% $6,698 100.00%

December 31, 1991 December 31, 1990
-------------------- ---------------------
% of Loans % of Loans
In Each In Each
Category To Category to
Amount Total Loans Amount Total Loans
------ ----------- ------ -----------
<S> <C> <C> <C> <C>
Applicable To:

Domestic, Commercial
Financial and
Agricultural ......... $3,349 27.77% $1,716 27.57%

Real Estate --
Construction ......... 335 .65 650 1.93

Real Estate --
Mortgage ............. 1,005 54.03 523 40.95

Installment ............ 670 16.26 1,308 22.55

Lease Financing ........ 335 1.29 785 3.71

Credit Card
Financing ............ -- -- -- --

Foreign ................ -- -- -- --

Unallocated ............ 1,004 N/A 250 --
------ ------- ------ -------
TOTAL ............... $5,232 100.00% $3,012 100.00%

</TABLE>

The allowance for possible loan losses has been allocated according to the
amount deemed to be reasonably necessary to provide for the possibility of
losses being incurred within the above categories of loans at the date
indicated.

-21-

<PAGE>

HUBCO, Inc. and Subsidiaries

S.E.C. GUIDE 3--ITEM V

DEPOSITS

The following table sets forth average deposits and average rates for each
of the years indicated.

Year Ended December 31,
---------------------------------------------------------------------
1994 1993 1992
-------------------- ----------------- -----------------
Amount Rate Amount Rate Amount Rate
------ ---- ------ ---- ------ ----
(In Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C>

Domestic Bank Offices:

Non-interest-bearing
demand deposits .. $ 215,573 $185,848 $152,397

Interest-bearing
demand deposits .. 146,722 2.76% 112,836 2.74% 97,494 3.34%

Savings deposits ... 451,410 2.52 342,540 2.58 278,925 3.26

Time deposits ...... 297,903 2.69 251,128 3.37 303,029 4.54

Foreign bank offices . -- -- --
---------- -------- --------
TOTAL ....... $1,111,608 $892,352 $831,845
========== ======== ========

</TABLE>

Maturities of time certificates of deposit and other time deposits of
$100,000 or more issued by domestic offices, outstanding at December 31, 1994
are summarized as follows:

<TABLE>
<CAPTION>
Time Certificates Other Time
of Deposit Deposits Total
----------------- ---------- --------
(In Thousands of Dollars)
<S> <C> <C> <C>
3 months or less ..................... $29,052 $ -- $29,052
Over 3 through 6 months .............. 7,545 -- 7,545
Over 6 through l2 months ............. 8,331 -- 8,331
TOTAL ....................... $44,928 $ $44,928
======= ==== =======
</TABLE>

-22-
<PAGE>

HUBCO, Inc. and Subsidiaries

S.E.C. GUIDE 3--ITEM VI

RETURN ON EQUITY AND ASSETS

<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------
1994 1993 1992
---- ---- ----

<S> <C> <C> <C>
Return on Average Assets ...................... 1.35% 1.44% 1.05%

Return on Average Equity ...................... 19.44 19.34 17.38

Dividend Payout Ratio ......................... 20.74 23.00 25.04

Average Equity to Average
Assets Ratio ................................ 6.93 7.44 6.04

</TABLE>

-23-

<PAGE>

HUBCO, Inc. and Subsidiaries

S.E.C. GUIDE 3--ITEM VII

SHORT-TERM BORROWINGS

The following table shows the distribution of the Company's short-term
borrowings and the weighted average interest rates thereon at the end of each of
the last three years. Also provided are the maximum amount of borrowings and the
average amounts of borrowings as well as weighted average interest rates for the
last three years. The term for each type of borrowing disclosed is one day.

Federal Funds
Purchased and
Securities Sold
Under Agreement Other Short-
to Repurchase Term Borrowings
------------- ---------------
(In Thousand of Dollars)
Year ended December 31:

1994 ................... $30,353 $ 1,000

1993 ................... 19,629 1,000

1992 ................... 14,133 1,000

Weighted average interest
rate at year end:

1994 ................... 4.23% 5.21%

1993 ................... 2.50 2.95

1992 ................... 2.92 3.05

Maximum amount outstanding
at any month's end:

1994 ................... $45,246 $ 1,000

1993 ................... 29,269 1,000

1992 ................... 17,010 1,000

Average amount outstanding
during the year:

1994 ................... $22,798 $ 2,723

1993 ................... 14,603 938

1992 ................... 14,500 928

-24-

<PAGE>

Federal Funds
Purchased and
Securities Sold
Under Agreement Other Short-
to Repurchase Term Borrowings
------------- ---------------
(In Thousand of Dollars)
Weighted average interest
rate during the year:

1994 ................... 2.44% 4.22%

1993 ................... 2.28 3.09

1992 ................... 3.31 4.00

ITEM 2. PROPERTIES

The corporate headquarters of HUBCO is located in a three story facility in
Mahwah, New Jersey. The building is approximately 64,350 square feet and houses
the executive offices of the Company and its subsidiaries. The main office of
Hudson United Bank is located in the former corporate headquarters, a four story
facility in Union City, New Jersey, which is owned by Hudson United Bank. Hudson
United Bank occupies 44 additional branch offices, of which 23 are owned and 21
are leased.

All leased properties have rental payments at or below fair market value.
Of the 21 properties leased, two have renewal options for terms of five to
fifteen years. The remaining nineteen locations have expiration dates ranging
from 1996-2006.

ITEM 3. LEGAL PROCEEDINGS

In the normal course of business, lawsuits and claims may be brought by and
may arise against HUBCO and its subsidiaries. In the opinion of management, no
legal proceedings which have arisen in the normal course of the Company's
business and which are presently pending or threatened against HUBCO or its
subsidiaries, when resolved, will have a material adverse effect on the business
or financial condition of HUBCO or any of its subsidiaries.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of Shareholders of HUBCO during the
fourth quarter of 1994.

-25-

<PAGE>
PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.

As of December 31, 1994, HUBCO had approximately 1,622 shareholders.

HUBCO's common stock was listed on the American Stock Exchange during 1992.
Effective March 1, 1993, HUBCO is listed on the Nasdaq National Market. The
following represents the high and low sale prices from each quarter during the
last two years. The numbers have been restated to reflect a 10% stock dividend
paid by HUBCO on June 1, 1993, and a 3 for 2 stock split effective January 14,
1995.

1994
------------------------
High Low
------ ------
1st Quarter ................ $15.83 $13.42
2nd Quarter ................ 15.00 13.33
3rd Quarter ................ 15.17 13.13
4th Quarter ................ 15.00 12.50

1993
------------------------
High Low
------ ------
1st Quarter ................ $16.42 $10.67
2nd Quarter ................ 16.25 12.67
3rd Quarter ................ 16.83 13.42
4th Quarter ................ 16.17 13.33

The following table shows the per share quarterly cash dividends paid upon
the common stock over the last two years.

1993 1994
---- ----
March 1 .............. $.07 March 1 .............. $.08
June 1 ............... .07 June 1 ............... .08
September 1 .......... .07 September 1 .......... .10
December 1 ........... .08 December 1 ........... .10
December 1 ........... .02 (extra)

Dividends are generally declared within 30 days prior to the payable date,
to stockholders of record l0-20 days after the declaration date.

ITEM 6. SELECTED FINANCIAL DATA
(In Thousands Except For Per Share Amounts)

Reference should be made to Item 1 ("Business") of this Report on Form 10-K
for a discussion of recent acquisitions which affect the comparability of the
information contained in this table.

-26-

<PAGE>
<TABLE>
<CAPTION>
1994 1993 1992 1991 1990
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net Interest Income ............. $ 58,021 $ 47,018 $ 41,013 $ 26,472 $ 22,991

Provision for Loan Losses ....... 3,000 3,600 4,116 2,312 4,150

Net Income ...................... 16,931 14,202 9,641 5,021 2,215

Per Share Data(1)
Net Income
Primary ....................... 1.69 1.37 1.06 .68 .30
Fully Diluted ................. 1.64 1.37 1.06 .68 .30
Cash Dividends per Common
Share ....................... .36 .31 .27 .22 .22

Balance Sheet Totals:
Total Assets--12/31 ........... 1,377,122 1,041,825 931,911 673,159 595,128
Long Term Debt--12/31 ......... 25,000 -- -- 763 831
Average Equity--for year ...... 87,077 73,451 55,467 39,367 37,634
Average Assets--for year ...... 1,255,824 987,894 918,116 610,297 549,704
------------------
<FN>

(1) Per share data is adjusted retroactively to reflect a 10% stock dividend
paid November 15, 1991 to stockholders of record on November 6, 1991, a 10%
stock dividend paid June 1, 1993 to stockholders of record on May 11, 1993,
and a 3 for 2 stock split payable January 14, 1995 to record holders of
HUBCO Common Stock on January 3, 1995.
</FN>
</TABLE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

HUBCO's 1994 Annual Report contains on pages 6 through 22 the information
required by Item 7 and that information is incorporated herein by reference.

-27-

<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

HUBCO's 1994 Annual Report contains on pages 23 through 36 the information
required by Item 8 and that information is incorporated herein by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

HUBCO's Proxy Statement for its 1995 Annual Meeting will contain, under the
caption "Proposal 2 - Election of Directors", the information required by Item
10 with respect to directors of HUBCO and certain information with respect to
executive officers and that information is to be incorporated herein by
reference. Certain additional information regarding executive officers of HUBCO,
who are not also directors, appears under subsection (e) of Item 1 of this Form
10-K.

ITEM 11. EXECUTIVE COMPENSATION

HUBCO's Proxy Statement for its 1995 Annual Meeting will contain, under the
caption "Executive Compensation", and under the caption "Compensation Committee
Interlocks and Insider Participation", the information required by Item 11 and
that information is to be incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

HUBCO's Proxy Statement for its 1995 Annual Meeting will contain, under the
caption "Stock Ownership of Management and Principal Shareholders", the
information required by Item 12 and that information is to be incorporated
herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

HUBCO's Proxy Statement for its 1995 Annual Meeting will contain, under the
captions "Compensation Committee Interlocks and Insider Participation" and
"Certain Transactions with Management", the information required by Item 13 and
that information is to be incorporated herein by reference.

-28-

<PAGE>
PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 8-K

(a) (1) & (2) List of Financial Statements and Financial
Statement Schedules

The below listed consolidated financial statements and report of
independent public accountants of HUBCO, Inc. and subsidiaries,
included in the Annual Report of the Registrant to its Shareholders
for the year ended December 31, 1994, are incorporated by reference in
Item 8:

Report of Independent Public Accountants

Consolidated Balance Sheets at
December 31, 1994 and 1993

Consolidated Statements of Income for the Years
Ended December 31, 1994, 1993 and 1992

Consolidated Statements of Changes in Stockholders'
Equity for the Years Ended December 31, 1994,
1993 and 1992

Consolidated Statements of Cash Flows for the Years
Ended December 31, 1994, 1993 and 1992

Notes to Consolidated Financial Statements

Schedules to the Consolidated Financial Statements required by Article 9 of
Regulation S-X are not required under the related instructions or are
inapplicable, and therefore have been omitted.

(a) (3) Exhibits

List of Exhibits

(2a) Agreement and Plan of Merger dated as of November 8, 1993,
between HUBCO, Inc., Hudson United Bank and Washington Bancorp,
Inc. and Washington Savings Bank. (Incorporated by reference
from the Company's Current Report on Form 8-K dated November 8,
1993.)

-29-
<PAGE>

(3a) The Certificate of Incorporation of HUBCO, Inc. filed May 5,
1982 and amendments to the Certificate of Incorporation, dated
November 22, 1983, January 30, 1984, January 11, 1985, July 17,
1986, March 25, 1987, April 26, 1991, November 26, 1991, March
25, 1992, May 17, 1993, and January 4, 1995.

(3b) The By-Laws of HUBCO, Inc.

(4) Indenture dated as of January 14, 1994 between HUBCO, Inc. and
Summit Bank as Trustee for $25,000,000 7.75% Subordinated
Debentures due 2004. (Incorporated by reference from the
Company's Annual Report on form 10-K for the fiscal year
ended December 31, 1993, Exhibit (4).)

(10a) Employment contract with Kenneth T. Neilson.

(10b) Employment contract with D. Lynn Van Borkulo-Nuzzo.

(10c) Collective Bargaining Agreement with Local 153 of the Office and
Professional Employees International Union, dated January 26,
1993. (Incorporated by reference from the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1992,
Exhibit (10d).)

(10d) Purchase and Assumption Agreement dated April 14, 1993, among
HUBCO, Inc., Hudson United Bank, Ramapo Financial Corporation
and The Ramapo Bank. (Incorporated by reference from the
Company's Current Report on Form 8-K dated April 14, 1993.)

(10e) Agreement and Plan of Merger dated October 7, 1994 between
HUBCO, Hudson United Bank and Jefferson. (Incorporated by
reference from the Company's Current Report on Form 8-K filed
October 20, 1994.)

(10f) Agreement and Plan of Merger, dated February 14, 1995, among
Urban National Bank, HUBCO, Inc. and Hudson United Bank.
(Incorporated by reference from the Company's Current Report on
Form 8-K filed February 23, 1995.)

(10g) HUBCO, Inc. Directors Deferred Compensation Plan.

(13) Those portions of the 1994 Annual Report to Shareholders which
are incorporated by reference into this Form 10-K.

(22) List of Subsidiaries.

(24) Consent of Arthur Andersen LLP

(27) Financial Data Schedule.

(b) Reports on Form 8-K

Form 8-K filed October 20, 1994 (Date of earliest event
reported)--October 6, 1994.

Item 5. Other Events--

Reported the announcement by the Company of the signing of a
definitive agreement for HUBCO to acquire Jefferson National
Bank and the signing of a letter of intent by Hudson United Bank
to acquire Shoppers Charge Accounts Co. Also reported HUBCO's
announcement of dividends declared on its Common and Preferred
stock.

Item 7. Exhibits--

Included three press releases, a Memorandum of Intent dated
October 6, 1994 between Hudson United Bank and Shoppers Charge
Accounts Co. and Agreement and Plan of Merger dated October 7,
1994 between HUBCO, Hudson United Bank and Jefferson.

Form 8-K filed December 7, 1994

Item 5. Other Events--

On December 7, 1994 HUBCO, Inc. through its subsidiary, Hudson
United Bank acquired Shoppers Charge Accounts Co. of Jersey
City.

Item 7. Exhibits--

Included Stock Purchase Agreement dated December 7, 1994 by and
among Hudson United Bank. Bernard Eichenbaum, David Leff, and
Shoppers Charge Accounts Co.

-30-
<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

HUBCO, INC.

By: JAMES E. SCHIERLOH
----------------------
James E. Schierloh
Chairman of the Board

Dated: March 30, 1995

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

Signature Title Date
--------- ----- ----
JAMES E. SCHIERLOH Chairman of the
------------------------------ Board and Director March 30, 1995
James E. Schierloh

KENNETH T. NEILSON President and
------------------------------ Director March 30, 1995
Kenneth T. Neilson

ROBERT J. BURKE Director March 30, 1995
-------------------------------
Robert J. Burke

HENRY G. HUGELHEIM Director March 30, 1995
-------------------------------
Henry G. Hugelheim

HARRY J. LEBER Director March 30, 1995
-------------------------------
Harry J. Leber

CHARLES F. X. POGGI Director March 30, 1995
-------------------------------
Charles F. X. Poggi

SR. GRACE FRANCES STRAUBER Director March 30, 1995
-------------------------------
Sister Grace Frances Strauber

-31-
<PAGE>

EDWIN WACHTEL Director March 30, 1995
-------------------------------
Edwin Wachtel

CHRISTINA L. MAIER Assistant
------------------------------ Treasurer March 30, 1995
Christina L. Maier

-32-

<PAGE>

Exhibit Index

Exhibits
--------

(2a) Agreement and Plan of Merger dated as of November 8, 1993,
between HUBCO, Inc., Hudson United Bank and Washington
Bancorp, Inc. and Washington Savings Bank. (Incorporated by
reference from the Company's Current Report on Form 8-K
dated November 8, 1993.)

(3b) The By-Laws of HUBCO, Inc.

(4) Indenture dated as of January 14, 1994 between HUBCO, Inc. and
Summit Bank as Trustee for $25,000,000 7.75% Subordinated
Debentures due 2004. (Incorporated by reference from the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1993, Exhibit (4).)

(10a) Employment contract with Kenneth T. Neilson.

(10b) Employment contract with D. Lynn Van Borkulo-Nuzzo.

(10g) HUBCO, Inc. Directors Deferred Compensation Plan.

(13) Those portions of the 1994 Annual Report to Shareholders which
are incorporated by reference into this Form 10-K.

(22) List of Subsidiaries.

(24) Consent of Arthur Andersen LLP.

(27) Financial Data Schedule.

-33-

CERTIFICATE OF INCORPORATION

HUBCO, Inc.

The undersigned, being over the age of 18 years old, for the purposes of
forming a corporation under the New Jersey Business Corporation Act, does hereby
execute the following certificate of incorporation:

ARTICLE I

CORPORATE NAME

The name of the Corporation shall be HUBCO, Inc. (hereinafter the
"Corporation").

ARTICLE II

CURRENT REGISTERED OFFICE
AND CURRENT REGISTERED AGENT

The address of the Corporation's initial registered office is 80 Park
Plaza, 23rd Floor, Newark New Jersey 07102. The name of the current registered
agent at that address is Ronald H. Janis.

ARTICLE III

INITIAL BOARD OF DIRECTORS
AND NUMBER OF DIRECTORS

The number of directors shall be governed by the by-laws of the
Corporation. The number of directors constituting the initial Board of Directors
shall be twelve. The names and addresses of the initial Board of Directors are
as follows:

Name Address
---- -------
John T. Clark ......... 3100 Bergenline Avenue
Union City, New Jersey 07087

James C. McClave ...... 3100 Bergenline Avenue
Union City, New Jersey 07087

Ronald David .......... 2 Broadway
New York, New York 10004

Arthur L. Dickson ..... 51 Newark Street
Hoboken, New Jersey 07030

1
<PAGE>

Name Address
---- -------
Henry Hugelheim ....... 752 Greeley Avenue
Fairview, New Jersey 07022

Harry J. Leber ........ 2000 Kennedy Boulevard
Union City, New Jersey 07087

George P. Moser, Sr. .. 415 32nd Street
Union City, New Jersey 07087

Harold J. Olsen ....... 638 Anderson Avenue
Cliffside Park, New Jersey 07010

Charles F.X. Poggi .... 15th and Adams Street
Hoboken, New Jersey 07030

James E. Schierloh .... East 210 Route 4
Paramus, New Jersey 07652

Sister Grace Frances .. 308 Willow Avenue
Strauber Hoboken, New Jersey 07030

Robert J. Burke ....... Foot of Pershing Road
Weehawken, New Jersey 07087

ARTICLE IV

CORPORATE PURPOSE

The purpose for which the Corporation is organized is to engage in any
activities for which corporations may be organized under the New Jersey Business
Corporation Act, subject to any restrictions which may be imposed from time to
time by the laws of the United States or the State of New Jersey with regard to
the activities of a bank holding company.

2
<PAGE>

ARTICLE V

CAPITAL STOCK

The Corporation is authorized to issue 2,000,000 shares of common stock,
all of which are without nominal or par value.

ARTICLE VI

INDEMNIFICATION

The Corporation shall indemnify its officers, directors, employees, and
agents and former officers, directors, employees and agents, and any other
persons serving at the request of the Corporation as an officer, director,
employee or agent of another corporation, association, partnership, joint
venture, trust, or other enterprise, against expenses (including attorneys'
fees, judgments, fines, and amounts paid in settlement) incurred in connection
with any pending or threatened action, suit, or proceeding, whether civil,
criminal, administrative or investigative, with respect to which such officer,
director, employee, agent or other person is a party, or is threatened to be
made a party, to the full extent permitted by the New Jersey Business
Corporation Act. The indemnification provided herein shall not be deemed
exclusive of any other right to which any person seeking indemnification may be
entitled under any by-law, agreement, or vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity, and shall inure to the benefit of the heirs,
executors, and the administrators of any such person. The Corporation shall have
this power to purchase and maintain insurance on behalf of any persons
enumerated above against any liability asserted against him and incurred by him
in any such capacity, arising out of his status as such, whether or not the
Corporation would have the power to indemnify him against such liability under
the provisions of this Article.

ARTICLE VII

NAME AND ADDRESS OF INCORPORATOR

The name and address of the incorporator is: Ronald H. Janis, c/o Clapp &
Eisenberg, 80 Park Plaza, 23rd Floor, Newark, New Jersey 07102.

IN WITNESS WHEREOF, I, the incorporator of the above named Corporation,
have hereunto signed this certificate of incorporation on the 5th day of May,
1982.

Ronald H. Janis

3
<PAGE>

CERTIFICATE OF AMENDMENT
to
CERTIFICATE OF INCORPORATION
of
HUBCO, Inc.

Pursuant to actions taken at a properly called and duly noticed special
meeting of stockholders of HUBCO, Inc. and in accordance with Section 14A:9-4(3)
of the New Jersey Business Corporation Act, the undersigned does hereby execute
the following Certificate of Amendment to the Certificate of Incorporation of
HUBCO, Inc.:

1. The name of the Corporation is HUBCO, Inc (the "Corporation").

2. A special meeting of the stockholders owning common stock of the
Corporation called for the purpose, inter alia, of considering amendments to the
Corporation's Certificate of Incorporation was convened on December 11, 1984,
adjourned to January 4, 1985 and further adjourned to January 11, 1985.

3. The number of shares of common stock of the Corporation entitled to vote
on the adoption of the amendments to the Corporation's Certificate of
Incorporation was 1,724,625.

4. At the January 11, 1985 session of the special meeting, the stockholders
adopted amended Article III of the Certificate of Incorporation of the
Corporation. The number of shares voted for the amendment was 1,165,174; The
number of shares voted against the amendment was 324,110. Amended Article III
will read in its entirety as follows:

4
<PAGE>

ARTICLE III
INITIAL BOARD OF DIRECTORS
AND NUMBER OF DIRECTORS

Name Address
---- -------
John T. Clark ............. 3100 Bergenline Avenue
Union City, New Jersey 07087

James C. McClave .......... 3100 Bergenline Avenue
Union City, New Jersey 07087

Ronald David .............. 2 Broadway
New York, New York 10004

Arthur L. Dickson ......... 51 Newark Street
Hoboken, New Jersey 07030

Henry Hugelheim ........... 752 Greeley Avenue
Fairview, New Jersey 07022

Harry J. Leber ............ 2000 Kennedy Boulevard
Union City, New Jersey 07087

George P. Moser, Sr. ...... 415 32nd Street
Union City, New Jersey 07087

5
<PAGE>

Name Address
---- -------
Harold J. Olsen .......... 638 Anderson Avenue
Cliffside Park, New Jersey 07010

Charles F.X. Poggi ....... 15th and Adams Street
Hoboken, New Jersey 07030

James E. Schierloh ....... East 210 Route 4
Paramus, New Jersey 07652

Sister Grace ............. 308 Willow Avenue
Frances Strauber Hoboken, New Jersey 07030

Robert J. Burke .......... Foot of Pershing Road
Weehawken, New Jersey 07087

Shareholders shall have no right to increase or decrease the number of
directors constituting the Board, except by the affirmative vote of at least
three-quarters of all of the outstanding shares of common stock entitled to vote
thereon, said vote to take place at an annual or special meeting of the
Corporation's stockholders called for the purpose of considering such matter.
Any director may be removed from office by the stockholders of the Corporation,
but only for cause.

Notwithstanding anything else in this Certificate of Incorporation to the
contrary (and notwithstanding the fact that a lesser percentage may be permitted
by law, this Certificate of Incorporation or the by-laws of the Corporation),
the provisions of this Article III may not be amended, altered, changed or
repealed in any respect, nor may any provision inconsistent herewith be adopted,
unless such action is approved by the affirmative vote of at least
three-quarters of all of the outstanding shares of common stock entitled to vote
thereon, said vote to take place at an annual or special meeting of the
Corporation's stockholders called for the purpose of considering such matter.

5. At the January 11, 1985 session of the special meeting, the stockholders
adopted an amendment to the Certificate of Incorporation of the Corporation by
adding a new Article VIII thereto. The number of shares voted for the amendment
was 1,169,869; the number of shares voted against the amendment was 319,763.

6
<PAGE>

New Article VIII will read as follows:

ARTICLE VIII
CLASSIFICATION OF DIRECTORS

The directors shall be divided into three classes, as nearly equal in
number as possible, with the term of office of the first class to expire at the
first annual meeting of stockholders following the meeting at which this Article
VIII is adopted, the term of office of the second class to expire at the second
annual meeting of stockholders following the meeting at which this Article VIII
is adopted and the term of office of the third class to expire at the third
annual meeting of stockholders following the meeting at which this Article VIII
is adopted.

If this Article VIII is adopted at a special meeting of stockholders,
directors of the second and third classes shall be elected to their terms at
such special meeting, and directors of the first class shall be designated in
advance of such special meeting by the Board of Directors from among the
directors elected at the preceding annual meeting of stockholders and shall not
be required to stand for election at such special meetings of stockholders. If
this Article VIII is adopted at an annual meeting of stockholders, all three
classes of directors shall be elected to their terms at such annual meeting. At
each annual meeting of stockholders following the initial classification and
election, directors elected to succeed those directors whose terms expire shall
be elected for a term of office to expire at the third succeeding annual meeting
of stockholders after their election or as soon thereafter as their successors
have been elected and qualified.

Notwithstanding anything else in this Certificate of Incorporation to the
contrary (and notwithstanding the fact that a lesser percentage may be permitted
by law, this Certificate of Incorporation or the by-laws of the Corporation),
the provisions of this Article VIII may not be amended, altered, changed or
repealed in any respect, nor may any provision inconsistent herewith be adopted,
unless such action is approved by the affirmative vote of at least
three-quarters of all of the outstanding shares of common stock entitled to vote
thereon, said vote to take place at an annual or special meeting of the
Corporation's stockholders called for the purpose of considering such matter.

7
<PAGE>

6. At the January 11, 1985 session of the special meeting, the stockholders
adopted an amendment to the Certificate of Incorporation of the Corporation
adding a new Article IX thereto. The number of shares voted for the amendment
was 1,178,252; the number of shares voted against the amendment was 313,726. New
Article IX will read as follows:

ARTICLE IX
MINIMUM PRICE

The stockholder vote required to approve a Business Combination (as
hereinafter defined) shall be as set forth in this section.

A. (1) Except as otherwise expressly provided in this section, the
affirmative vote of at least three-quarters of all of the outstanding
shares of common stock entitled to vote thereon shall be required in
order to authorize any of the following:

(a) any merger or consolidation of the Corporation or any subsidiary
thereof with a Related Person (as hereinafter defined) or any
other corporation which after such merger or consolidation would
be a Related Person;

(b) any sale, lease, exchange, transfer or other disposition,
including without limitation, a mortgage, or any other security
device, of all or any Substantial Part (as hereinafter defined)
of the assets of the Corporation (including without limitation
any voting securities of subsidiary) or of a subsidiary, to a
Related Person;

(c) the issuance or transfer by the Corporation or any subsidiary
thereof of any securities of the Corporation or a subsidiary of
the Corporation to a Related Person;

(d) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation proposed by or on behalf of a
Related Person;

(e) any reclassification of securities (including any reverse stock
split) or recapitalization of the Corporation, or any merger or
consolidation of the Corporation, with any of its Subsidiaries or
any other transaction (whether or not with or otherwise involving
Related Person) which has the effect, directly or indirectly, of
increasing the proportionate share of any class of equity or
convertible securities of the Corporation or any Subsidiary which
is directly or indirectly beneficially owned by any Related
Person;

8
<PAGE>

(f) any agreement, contract or other arrangement providing for any of
the transactions described in this section of the Certificate of
Incorporation.

(2) Such affirmative vote shall be required notwithstanding any other
provision of this Certificate of Incorporation, any provision of law
or any agreement with any national securities exchange which might
otherwise permit a lesser vote or no vote.

(3) The term "Business Combination" as used in this section shall mean any
transaction which is referred to in any one or more of subparagraphs
(a) through (f) above.

B. The provisions of Part A of this section shall not be applicable to any
particular Business Combination, and such Business Combination shall
require only such affirmative shareholder vote and such approval by the
Board of Directors as is required by any other provision of this
Certificate of Incorporation, any provision of law or any agreement with
any national securities exchange, if all of the conditions specified in
either of the following subparagraphs (1) or (2) are met:

(1) The Business Combination shall have been approved by a majority of
the directors of the Corporation then in office.

(2) All the following conditions have been met:

(a) The aggregate amount of (x) cash and (y) Fair Market Value (as
hereinafter defined), as of the date of the consummation of the
Business Combination, of consideration other than cash to be
received per share by holders of common stock in such Business
Combination shall be at least equal to the amount determined
under sub-clauses (i) and (ii) below:

(i) if the Related Person has acquired shares of the
Corporation's common stock in a tender offer for or has
requested or invited the tender of the Corporation's common
stock in a transaction subject to the provisions of Section
14(d) of the Securities Exchange Act of 1934, the highest per
share price (including any brokerage commissions, transfer
taxes and soliciting dealers' fees) paid by the Related
Person for any share of common stock acquired by it (a)
within the one-year period immediately prior to the first
public announcement of the proposal of the Business
Combination (the "Announcement Date") or (b) in connection
with the tender offer or request or invitation of tenders,
whichever is higher;

9
<PAGE>

(ii) if the Related Person has not made such a tender offer for or
invited or requested the tender of the Corporation's common
stock, two time the highest Fair Market Value per share of
the Corporation's common stock during the one-year period
ending with the Announcement Date.

(b) The consideration to be received by holders of a particular class
of outstanding voting stock shall be in cash or in the same form
as the Related Person has previously paid for shares of such class
of voting stock. If the Related Person has paid for shares of any
class of voting stock with varying forms of consideration, the
form of consideration such class of voting stock shall be either
cash or the form used to acquire the largest number of shares of
such class of voting stock previously acquired by it.

C. For the purpose of this section the following definitions apply:

(1) The term "Related Person" shall mean and include (a) any individual,
corporation, partnership or other person or entity which together with
its "affiliates" (as that term is defined in Rule 12b-2 of the General
Rules and Regulations under the Securities Exchange Act of 1934), is
the "beneficial owner" (as that term is defined in Rule 13d-3 of the
General Rules and Regulations under the Securities Exchange Act of
1934) in the aggregate of 10 percent or more of the outstanding shares
of the common stock of the Corporation; and (b) any "affiliate" (as
that term is defined in Rule 12b-2 under the Securities Exchange Act of
1934) of any such individual, corporation, partnership or other person
or entity. Without limitation, any shares of the common stock of the
Corporation which any Related Person has the right to acquire pursuant
to any agreement, or upon exercise of conversion rights, warrants or
options or otherwise, shall be deemed "beneficially owned" by such
Related Person.
10
<PAGE>

(2) The term "Substantial Part" shall mean more than 25 percent of the
total assets of the Corporation, as of the end of its most recent
fiscal year ending prior to the time the determination is made.

(3) The term "Fair Market Value" shall mean: (a) in the case of stock, the
highest closing sale price during the 30-day period immediately
preceding the date in question if a specific date for valuation thereof
is specified or during the period in question if a period for valuation
thereof is specified of a share of such stock on the Composite Tape for
American Stock Exchange-Listed Stocks, or, if such stock is not quoted
on the Composite Tape, on the America Stock Exchange, or, if such stock
is not listed on such Exchange, on the principal United States
securities exchange registered under the Securities Exchange Act of
1934 on which such stock is listed, or, if such stock is not listed on
any such exchange, the highest closing price or closing bid quotation
with respect to a share of such stock during the 30-day period
preceding such date in question or during such period in question on
the National Association of Securities Dealers, Inc. Automated
Quotation System or any system then in use, or if no such quotations
are available, the fair market value on the date in question of a share
of such stock as determined by the Board of Directors, in good faith;
and (b) in the case of property other than cash or stock, the fair
market value of such property on the date in question as determined by
the Board of Directors in good faith.

(4) In the event of any Business Combination in which the Corporation
survives, the phrase "consideration other than cash to be received" as
used in paragraph (2)(a) of Part B of this Article shall include the
shares of common stock and/or the shares of any other class of
outstanding voting stock retained by the holders of such shares.

D. Nothing contained in this section shall be construed to relieve any
related Party from any fiduciary obligation imposed by law.

E. If any question shall arise as to the applicability of this Article IX or
as to the interpretation of any of its provisions, such question shall be
resolved by the Board of Directors, and the Board's resolution shall be
final and binding.

F. Notwithstanding any other provision of this Certificate of Incorporation
(and notwithstanding the fact that a lesser percentage may be permitted by
law, this Certificate of Incorporation or the by-laws of the Corporation),
the provisions of this Article IX may not be amended, altered, changed or
repealed in any respect, nor may any provision inconsistent herewith be
adopted, unless such action is approved by the affirmative vote of the
holders of at least three-quarters of all of the outstanding shares of
common stock entitled to vote thereon, said vote to take place at an
annual or special meeting of the Corporation's stockholders called for the
purpose of considering such matter.

IN WITNESS WHEREOF, this certificate has been executed by a duly authorized
officer of the Corporation on this 11th day of January, 1985.

HUBCO, Inc.

By:
John T. Clark, President

11
<PAGE>

ARTICLE V
CAPITAL STOCK

The Corporation is authorized to issue
4,224,625 shares of Common Stock, all of
which are without nominal or par value.

6. The share division and the amendment to the Corporation's Certificate of
Incorporation affected by this certificate shall become effective August 1,
1986.

IN WITNESS WHEREOF, this certificate has been executed by a duly authorized
officer of the Corporation this 17th day of July, 1986.

HUBCO, Inc.

By:
John T, Clark, President

12
<PAGE>

AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
HUBCO, INC.

HUBCO, Inc., a New Jersey corporation, does hereby certify as follows:

1. The name of the corporation is: HUBCO, Inc. (the "Corporation").

2. The Corporation is hereby amending its certificate of incorporation as
follows:

(A) The existing "ARTICLE V-CAPITAL STOCK" is deleted in its entirety. In
lieu thereof, the following Article V is added to the certificate of
incorporation:

ARTICLE V
CAPITAL STOCK

The Corporation is authorized to issue 5,200,00 shares of common stock, all
of which are without nominal or par value.

(B) NEW ARTICLE X

A new Article X is added to the Corporation's certificate of incorporation
as follows:

ARTICLE X

LIMITATION ON LIABILITY OF DIRECTORS AND OFFICERS

A director or officer of the Corporation shall not be personally liable to
the Corporation or its shareholders for damages for breach of any duty owed to
the Corporation or its shareholders, except that such provision shall not
relieve a director or officer from liability for ant breach of duty based upon
an act or omission (i) in breach of such person's duty of loyalty to the
Corporation or its shareholders, (ii) not in good faith or involving a knowing
violation of law, or (iii) resulting in receipt by such person of an improper
personal benefit. If the New Jersey Business Corporation Act is amended after
approval by the shareholders of this provision to authorize corporate action
further eliminating or limiting the personal liability of directors officers,
then the liability of a director and/or officer of the Corporation shall be
eliminated or limited to the fullest extent permitted by the New Jersey Business
Corporation Act as so amended.

13
<PAGE>

Any repeal or modification of the foregoing paragraph by the shareholders
of the Corporation or otherwise shall not adversely affect any right or
protection of a director or officer of the Corporation existing at the time of
such repeal or modification.

3. The foregoing amendments were adopted at the annual meeting of
shareholders of HUBCO, Inc. held March 24, 1987.

4. At such annual meeting there were outstanding and entitled to vote
3,552,727 shares of common stock, without nominal or par value.

5. At such annual meeting shareholders cast 2,557,012 votes for, and
120,190 votes against the amendment of Article V and 2,531,799 votes for, and
133,827 votes against the addition of Article X.

6. The amendment to Article V and the addition of Article X were adopted by
a majority of the votes cast by the holders of shares entitled to vote thereon.

IN WITNESS WHEREOF, John T. Clark, President of HUBCO, Inc., has executed
this certificate on behalf of HUBCO, Inc. on this 25th day of March, 1987.

HUBCO, INC.

By:
John T. Clark, President

14
<PAGE>

CERTIFICATE OF AMENDMENT
TO THE CERTIFICATE OF INCORPORATION
OF
HUBCO, INC.

Dated: As of March 27, 1991

Pursuant to the provisions of Section 14A:9-4(3) of the New Jersey Business
Corporation Act, the undersigned corporation hereby certifies as follows:

1. The name of the corporation is HUBCO, Inc. (the "Corporation").

2. The following amendment to the Corporation's Certificate of
Incorporation was approved by the directors of the Corporation and duly adopted
by the shareholders of the Corporation at a meeting duly held on March 26, 1991:

Article V of the Corporation's Certificate of Incorporation is deleted in
its entirety, and following is substituted therefore:

ARTICLE V
CAPITAL STOCK

(A) The total authorized capital stock of the Corporation shall be
6,700,000 shares, consisting of 5,200,000 shares of Common Stock and 1,500,000
shares of preferred Stock which may be issued in one or more classes or series.
The shares of Common Stock shall constitute a single class and shall be without
nominal or par value. The shares of Preferred Stock of each class of series
shall be without nominal or par value, except that the amendment authorizing the
initial issuance of any class or series, adopted by the Board of Directors as
provided herein, may provide that shares of any class or series shall have a
specified par value per share, in which event all of the shares of such class or
series shall have the par value per share so specified.

(B) The Board of Directors of the Corporation is expressly authorized from
time to time to adopt and to cause to be executed and filed without further
approval of the shareholders amendments to this Certificate of Incorporation
authorizing the issuance of one or more classes or series of Preferred Stock for
such consideration as the Board of Directors may fix. In an amendment
authorizing any class or series of Preferred Stock, the Board of Directors is
expressly authorized to determine:

15
<PAGE>

(a) The distinctive designation of the class or series and the number
of shares which will constitute the class or series, which number may be
increased or decreased (but not below the number of shares then outstanding
in that class or above the total shares authorized herein) from time to
time by action of the Board of Directors.

(b) The dividend rate of the shares of the class or series, whether
dividends will be cumulative, and, if so, from what date or dates;

(c) The price or prices at which, and the terms and conditions on
which, the shares of the class or series may be redeemed at the option of
the Corporation;

(d) Whether or not the shares of the class or series will be entitled
to the benefit of a retirement of sinking fund to be applied to the
purchase or redemption of such shares and, if so entitled, the amount of
such fund and the terms and provisions relative to the operation thereof;

(e) Whether or not the shares of the class or series will be
convertible into, or exchangeable for, any other shares of stock of the
Corporation or other securities, and if so convertible or exchangeable, the
conversion price or prices, or the rates of exchange, and any adjustments
thereof, at which such conversion or exchange may be made, and any other
terms and conditions of such conversion or exchange;

(f) The rights of the shares of the class or series in the event of
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation;

(g) Whether or not the shares of the class or series will have
priority over, parity with, or be junior to the shares of any other class
or series in any respect, whether or not the shares of the class or series
will be entitled to the benefit of limitations restricting the issuance of
shares of any other class or series having priority over or on parity with
the shares of such class or series and whether or not the shares of the
class or series are entitled to restrictions on the payment of dividends
on, the making of other distributions in respect of, and the purchase or
redemption of shares of any other class or series of Preferred Stock or
Common Stock ranking junior to the shares of the class or series;

(h) Whether the class or series will have voting rights,, in addition
to any voting rights provided by law, and if so, the terms of such voting
rights; and

(i) Any other preferences, qualifications, privileges, options and
other relative or special rights and limitations of that class or series.

3. 4,083,828 shares of the Corporation's common stock were entitled to vote
on the amendment. 2,286,958 shares were voted in favor of the amendment and
636,102 shares were vote against the amendment.

IN WITNESS WHEREOF the undersigned has caused this certificate to be
executed by its duly qualified officer as of the date and year first written
above.

HUBCO, INC.

By:
Kenneth Neilson, President

16
<PAGE>

AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
HUBCO, INC.

Hubco, Inc., a New Jersey corporation, pursuant to N.J.S.A. 14A:7-15.1,
does hereby certify as follows:

(a) The name of the corporation is: Hubco, Inc. (the "Corporation").

(b) A ten percent (10%) stock split was declared by the Corporation on
October 29, 1991 pursuant to which one share of Common Stock, no par value, will
be distributed for each 10 shares of Common Stock, no par value, held by
shareholders on the record date of November 6, 1991, effective November 15,
1991. A resolution approving the share division was adopted by the Board of
directors of the Corporation at its regular meeting held on the 29th day of
October, 1991.

(c) The share division will not adversely affect the rights or preferences
of the holders of outstanding shares and will not result in the percentage of
authorized shares that remains unissued after the share division exceeding the
percentage of authorized shares that was unissued before the share division.

(d) There were issued and outstanding as of the record date of November 6,
1991, 4,120,078 shares of Common Stock without par value which are shares
subject to the share division. As a result of the share division, in which one
share will be issued for every 10 shares issued and outstanding, those 4,120,078
shares will be divided into 4,532,086 shares issued and outstanding.

(e) The Corporation is hereby amending its certificate of incorporation in
connection with the share division to increase the authorized common stock, as
follows:

The existing "Article V(A)" is deleted in its entirety. In lieu thereof,
the following Article V(A) is added to the certificate of incorporation:

(A) The total authorized capital stock of the Corporation shall be
7,220,000 shares, consisting of 5,720,000 shares of Common Stock and
1,500,000 shares of Preferred Stock which may be issued in one or more
classes or series. The shares of Preferred Stock of each class of series
shall be without nominal or par value, except that the amendment
authorizing the initial issuance of any class or series, adopted by the
Board of Directors as provided herein, may provided that shares of any
class or series shall have a specified par value per share, in which event
all of the shares of such class or series shall have the par value per
share so specified.

IN WITNESS WHEREOF, Kenneth T. Neilson, President of Hubco, Inc., has
executed this certificate on behalf of Hubco, Inc. on this 26th day of November,
1991.

HUBCO, INC.

By:
Kenneth T. Neilson, President

17
<PAGE>

AMENDMENT TO THE
CERTIFICATE OF INCORPORATION
OF
HUBCO, INC.

HUBCO, Inc., a New Jersey corporation, does hereby certify as follows:

1. The name of the corporation is: HUBCO, Inc. (the "Corporation").

2. The Corporation is hereby amending its certificate of incorporation as
follows:

Paragraph A of Article V is deleted in its entirety, and in place therefore
the following is substituted:

"(A) The total authorized capital stock of the Corporation shall be
15,000,000 shares, consisting of 12,000,000 shares of Common Stock and
3,000,000 shares of Preferred Stock which may be issued in one or more
classes or series. The shares of Common Stock shall constitute a single
class and shall be without nominal or par value, except that the amendment
authorizing the initial issuance of any class or series, adopted by the
Board of Directors as provided herein, may provide that shares of any class
or series shall have a specific par value per share, in which event all of
the shares of such class or series shall have the par value per share so
specified."

3. The foregoing amendment was adopted at the annual meeting of
shareholders of the Corporation held March 24, 1992.

4. At such annual meeting there were outstanding and entitled to vote
4,531,492 shares of common stock, without nominal or par value.

5. At such annual meeting shareholders cast 2,747,095 votes for, and
411,302 votes against the amendment to Article V.

6. The amendment to Article V was adopted by a majority of the votes cast
by the holders of shares entitled to vote thereon.

IN WITNESS WHEREOF, Kenneth T. Neilson, President of the Corporation, has
executed this certificate on behalf of the Corporation on this 25th day of
March, 1992.

HUBCO, INC.

By
Kenneth T. Neilson, President

<PAGE>

AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
HUBCO, INC.

HUBCO, Inc. a New Jersey Corporation, pursuant to N.J.S.A. 14A:7-15.1, does
hereby certify as follows:

(a) The name of the Corporation is: HUBCO, Inc. (The "Corporation").

(b) A ten percent (10%) stock split was declared by the Corporation on
April 20, 1993, pursuant to which one share of common stock, no par value, will
be distributed for each 10 shares of common stock, no par value, held by
shareholders on the record date of May 11, 1993, effective June 1, 1993. A
resolution approving the share division was adopted by the Board of Directors of
the Corporation at its regular meeting held on the 20th day of April, 1993.

(c) The share division will not adversely affect the rights or preferences
of the holders of outstanding shares and will not result in the percentage of
authorized shares that remains unissued after the share division excluding the
percentage of authorized shares that was unissued before the share division.

(d) That there were issued and outstanding as of the record date of May 1,
1993, 6,286,342 shares of common stock without par value which are the shares
subject to the share division. As a result of the share division, in which one
share will be issued for every 10 shares issued and outstanding, those 6,286,342
shares will be divided into 6,914,353 shares issued and outstanding.

(e) The Corporation is hereby amending its Certificate of Incorporation in
connection with the share division to increase the authorized common stock and
the authorized preferred stock as follows:

The existing "Article V(A)" is deleted in its entirety. In lieu
thereof, the following Article V(A) is added to the Certification of
Incorporation:

"(A) The total authorized capital stock of the Corporation shall be
16,500,000 shares, consisting of 13,200,000 shares of common stock and
3,300,000 shares of Preferred Stock which may be issued in one or more
classes or series. The shares of common stock shall constitute a single
class and shall be without nominal or par value, except that the amendment
authorizing the initial issuance of any class or series, adopted by the
Board of Directors, as provided herein, may provide that shares of any
class or series shall have a specific par value per share, in which event
all of the shares of such class of series shall have the par value so
specified."

In Witness Whereof, Kenneth T. Neilson, President of HUBCO, Inc. has
executed this Certificate on behalf of HUBCO, Inc. on this 17th day of May,
1993.

HUBCO, Inc.

By:
Kenneth T. Neilson, President

19
<PAGE>

AMENDMENT TO THE
CERTIFICATE OF INCORPORATION
OF HUBCO, INC.

HUBCO, Inc. a New Jersey Corporation, pursuant to N.J.S.A. 14:7-15.1, does
hereby certify as follows:

(a) The name of the Corporation is: HUBCO, Inc. ("The Corporation").

(b) A fifty percent (50) common stock split was declared by the Corporation
on October 13, 1994, pursuant to which one share of common stock, no par value,
will be distributed for each 2 shares of common stock, no par value, held by
shareholders on the record date of January 3, 1995, effect January 14, 1995. A
resolution approving the share division was adopted by the Board of Directors of
the Corporation at its regular meeting held on the 13th day of October, 1994.

(c) The share division will not adversely affect the rights or preferences
of the holders of outstanding shares and will not result in the percentage of
authoized shares that remains unissued after the share division excluding the
percentage of authorized shares that was unissued before the share division.

(d) That there were issued and outstanding as of the record date of January
3, 1995, 7,053,457 shares of common stock without par value which are the shares
subject to the share division. As a result of the share division, in which one
share will be issued for every two (2) shares issued and outstanding, those
7,053,457 shares will be divided into 10,580,185 shares issued and outstanding.

(e) The Corporation is hreby amending its Certificate of Incorporation in
connection with the share division to increase the authorized common stock and
the authorized preferred stock as follows:

The existing "Article V(A)" is deleted in its entirety. In lieu
thereof, the following Article V(A) is added to the Certificate of
Incorporation.

"(A) The total authorized stock of the Corporation shall be 23,100,000
shares, consisting of 19,800,000 shares of common stock and 3,300,000
shares of Preferred Stock--which may be issued in one or more classes or
series. The shares of common stock shall constitute a single class and
shall be without nominal or par value, except that the amendment
authorizing the initial issuance of any class or series adopted by the
Board of Directors, as provided herein, may provide that shares of any
class or series shall have a specific par value per share, in which event
all of the shares of such class or series shall have the par value so
specified."

In Witness Whereof, Kenneth T. Neilson, President of HUBCO, Inc. has
executed this Certificate on behalf of HUBCO, Inc. on this 4th day of January,
1995.

HUBCO, INC.

By: /s/ KENNETH T. NEILSON
--------------------------------------
Kenneth T. Neilson, President & C.E.O.

--------------------------------------------------------------------------------
HUBCO, Inc.
Union City, New Jersey

REVISED BYLAWS

Adopted by the Board of Directors
March 14, 1995
--------------------------------------------------------------------------------

ARTICLE I - SHAREHOLDERS MEETINGS
---------------------------------

1. Annual Meeting - The Annual Meeting of Shareholders for the election of
directors and such other business as may properly come before the meeting
shall be held within 30 days of March 31st (either before or after) on such
date, time and at such place each year as may be set by vote of the Board.
The meeting shall be held upon not less than ten nor more than 60 days
written notice of the date, time, place and purpose of the meeting.

2. Special Meetings - A special meeting of shareholders may be called for any
purpose by the Chairman of the Board, the President or the Board of
Directors. A special meeting shall be held upon not less than ten nor more
than sixty days written notice of the time, place and purposes of the
meeting.

3. Action Without Meeting - The shareholders may act without a meeting by
written consent or consents pursuant to N.J.S. 14A:5-6. Such written
consent or consents shall be filed in the minute book.

4. Quorum - A majority of the outstanding common stock represented in person
or by proxy shall constitute a quorum at any meeting of shareholders. Less
than a quorum may adjourn any meeting, and the meeting may be held, as
adjourned, without further notice.

5. Shareholder Action - A majority of the votes cash shall decide every
question or matter submitted to the shareholders at any meeting, unless
otherwise provided by law or by the certificate of incorporation.

6. Record Date - The Board of Directors shall fix a record date for each
meeting of shareholders and for other corporate action for purposes of
determining the shareholders of the Corporation who are entitled to: (i)
notice of or to vote at any meeting of shareholders; (ii) give a written
consent to any action without a meeting: or (iii) receive payment of any
dividend, distribution, or allotment of any right. The record date shall
not be more than sixty days nor less than ten days prior to the
shareholders meeting, or other corporate action or event to which it
relates.

<PAGE>

7. Mailing or Delivering Notice - Shareholders shall be under a duty to notify
the Secretary of the Corporation of any change in their address. All
notices, dividends or distributions to which a shareholder is entitled
shall be mailed to the most recent address listed for each shareholder on
the books of the Corporation.

8. Inspector of Election - Every election of directors shall be managed by an
inspector, who shall be appointed by the Board of Directors. The inspector
of election shall tabulate the proxies and ballots for the election of
directors and, after the election, shall file with the secretary of the
meeting a certificate under their hands, certifying the result thereof and
the names of the directors elected. The inspector of election, at the
request of the Board of Directors or Chairman of the meeting, shall act as
tellers of any other vote by ballot taken at such meeting, and shall
certify the result thereof.

9. Proxies - Shareholders may vote at any meeting of the shareholders by
proxies duly authorized in writing.

ARTICLE II - DIRECTORS
----------------------

1. Board of Directors - The Board of Directors (the "Board"), shall have power
to manage and administer the business and affairs of the Corporation.
Except as expressly limited by law, all powers of the Corporation shall be
vested and may be exercised by the Board.

2. Number and Term of Office - The number of directors shall be not less than
five and not more than twenty-five. The exact number shall be determined by
the Board., Directors shall be divided into three classes, as nearly equal
in number as possible. Directors of one of the classes shall be elected by
the shareholders at each annual meeting, and the directors so elected shall
hold office until the third succeeding annual meeting of shareholders and
until their successors shall have been elected and qualified. If the Board
changes the number of directors constituting a full Board, the new number
shall be apportioned as nearly equally as possible among the three classes,
provided that no director's term of office may be shortened by his or her
being reassigned to another class, and provided further that new directors
may be elected to terms shorter than three years if necessary, to keep the
classes of equal or nearly equal size. The Board shall have the right to
increase the number of directors between annual meetings and to fill
vacancies so created and other vacancies occurring for any reason, provided
that vacancies caused by increasing the number of directors shall be
apportioned as nearly equally as possible among the three classes of
directors, and provided further that directors appointed by the Board to
fill vacancies occurring for any reason shall serve only until the next
annual meeting of shareholders (and until their

<PAGE>

successors shall have been elected and qualified) at which time the balance
of their terms, if any, shall be filled by directors elect ted by the
shareholders. (revised January 18, 1984).

3. Regular Meetings - A regular meeting of the Board shall be held without
notice immediately following and at the same place as the annual
shareholders' meeting for the purpose of electing officers and conducting
any other business as may come before the meeting. The Board shall hold a
regular meeting on the second and fourth Tuesday of each month but any
regular meeting may be hold on such other day as the Board by resolution
may designate. Any regular meeting may be omitted entirely. All regular
meetings may be held without notice to any director, except that a forth
different or additional regular meeting dates shall be entitled to notice
of those meetings.

4. Special Meetings - A special meeting of the Board may be called for any
purpose at any time by the Chairman of the Board, the President or by five
directors. The meeting shall be held upon such notice as is reasonable
under the circumstances, but if the meeting is not called by the Chairman
or the President then upon not less than one day's notice if given orally
(either by telephone or in person), or upon not less than two days' notice
if given by telegraph or by mail to the business or residence address of
each director. The notice shall specify the time and place of the meeting.

5. Action Without Meeting - The Board may act without a meeting if, prior or
subsequent to the action, each member of the board shall consent in writing
to the action. The written consent or consent or consents shall be filed in
the minute book.

6. Quorum - A majority of the directors shall constitute a quorum at any
meeting, except when otherwise provided by law or these bylaws. However, a
smaller number may adjourn any meeting and the meeting may be held, as
adjourned, without further notice. The act of the majority present at a
meeting at which a quorum is present shall be the act of the Board, unless
otherwise provided by law or these bylaws.

7. Vacancies in Board of Directors - Any vacancy in the Board, including a
vacancy caused by an increase in the number of directors, may be filled by
the affirmative vote of a majority of the remaining directors.

<PAGE>

ARTICLE III - COMMITTEES OF THE BOARD
-------------------------------------

1. Executive Committee - The Bank's Amended and Integrated
Certificate of Incorporation provides that:

"An Executive Committee of the Board of Directors may be appointed
from time to time by the Board of Directors from among the Directors."

There shall be an Executive Committee of the Board of Directors composed of
seven members to be appointed from time to time by the Board of Directors,
all of whom shall hold office from the time of their appointment until the
first meeting of the Board of Directors following the next annual meeting
of stockholders and until their successors are appointed. Two of such
members shall be the Chairman and the President.

The Executive Committee may make rules and regulations for the transaction
of its business subject to the approval of the Board of Directors.

The Executive Committee shall have all of the powers and be subject to all
of the duties provided by law subject, however, to the limitation that the
executive Committee shall act only between meetings of the Board and only
on matters which in the opinion of the Committee should not be deferred for
Board action.

The minutes of each meeting of the Executive Committee shall be presented
to the Board of Directors at its next meeting following such meeting of the
Executive Committee, except as otherwise provided by law.

2. Other Committees - The Board may appoint, from time to time, other
committees for such purposes and with such powers as the Board may
determine.

ARTICLE IV - WAIVERS OF NOTICE
------------------------------

Any notice required by these bylaws, by the certificate of incorporation,
or by the New Jersey Business Corporation Act may be waived in writing by
any person entitled to notice. The waiver, or waivers, may be executed
either before or after the event with respect to which the notice is
waived. Each director or shareholder attending a meeting without
protesting, prior to its conclusion, the lack of proper notice shall be
deemed conclusively to have waived notice of the meeting.

<PAGE>

ARTICLE V - OFFICERS
--------------------

1. Election - At its regular meeting following the annual meeting of
shareholders, the Board shall elect a Chairman, a President, a Treasurer, a
Secretary, and it may elect such other officers as it shall deem necessary.
One person may hold two or more offices.

2. Chairman of the Board - The Board shall appoint one of its members to be
Chairman of the Board to serve at the pleasure of the Board. Such person
shall preside at all meetings of the Board and of the shareholders. The
Chairman of the Board shall supervise the carrying out of the overall
policies and objectives of the Corporation and may exercise such specific
additional powers and duties as from time to time may be assigned by the
Board. In the absence or disability of the President, the Chairman shall
perform his duties.

3. President - The Board shall appoint one of its members to be President of
the Corporation. In the absence or disability of the Chairman, the
President shall preside at any meeting of the Board unless the Board
appoints a temporary Chairman. Subject to the Authority of the Board, and
on matters of overall policy subject to consultation with the Chairman, the
President shall have general executive powers and shall have and may
exercise any and all other powers and duties pertaining by law or practice
to the office of President. The President shall also have and may exercise
such further powers and duties as from time to time may be conferred or
assigned by the Board. The President shall be an ex-office member of all
Board Committees to which he is not appointed.

4. Vice President - The Board may appoint one or more Vice Presidents who
shall perform the duties and have the authority as from time to time may be
delegated to him by the Chairman, the President or by the Board.

5. Secretary - The Board shall appoint a Secretary of the Corporation who
shall be custodian of the corporate seal, records, documents and papers.
The Secretary shall have and may exercise any and all other powers and
duties pertaining by law or practice to the office of Secretary and shall
also perform such other duties as may be assigned from time to time by the
Board.

6. Secretary to the Board - The Board shall appoint a Secretary to the Board
who shall be Secretary for meetings of the Board and shall keep accurate
minutes of those meetings.

<PAGE>

7. Treasurer - The Board shall appoint a Treasurer who shall have the custody
of the funds and securities of the Corporation and shall keep or cause to
be kept regular books of account for the Corporation. The Treasurer shall
perform such other duties and possess such other powers as are incident to
his office or as shall be assigned to him by the President or the Board.

8. Other Officers - The Board may appoint one or more Assistant Vice
Presidents, one or more Assistant Secretaries, one or more Assistant
Treasurers, and such other officers as from time to time may appear to the
Board to be required or desirable to transact the business of the
Corporation. Such officers shall respectively exercise such powers and
perform such duties as pertain to their several offices, or as may be
conferred upon, or assigned to, them by the Board, the Chairman of the
board, or the President.

9. Tenure of Office - The Chairman, the President and all other officers shall
hold office at the will of the Board. Any vacancy occurring in the office
of Chairman, President, Secretary or Treasurer shall be filled by the
Board.

ARTICLE VI - SHARE CERTIFICATES
-------------------------------

The shares of the Corporation shall be represented by certificates signed
by or in the name of the Corporation,m by the Chairman of the Board, or the
President or a Vice President, and by the Secretary, Treasurer, Assistant
Secretary or Assistant Treasurer of the Corporation, and may be sealed with
the seal of the Corporation. Any signature and the seal may be reproduced
by facsimile. In case any officer who has signed or whose facsimile. In
case any officer who has signed or whose facsimile signature has been
placed upon such certificate shall have ceased to be such officer before
such certificate is issued, it may be issued by the Corporation with the
same effect as if he were such officer at the date of its issue.

<PAGE>

ARTICLE VII - AMENDMENTS TO AND EFFECT OF BYLAWS: FISCAL YEAR
--------------------------------------------------------------

1. Force and Effect of Bylaws - These bylaws are subject to the provisions of
the New Jersey Business Corporation Act and the Corporation's Certificate
of Incorporation, as it may be amended from time to time. If any provision
in these bylaws is inconsistent with a provisions of the Act or the
Certificate of Incorporation shall govern.

2. Amendments to Bylaws - These bylaws may be altered, amended, or repealed by
the shareholders or the Board. Any bylaw adopted, amended, or repealed by
the shareholders may be amended or repealed by the Board, unless the
resolution of the shareholders adopting such bylaw expressly reserves to
the shareholders the right to amend or repeal it.

3. Fiscal Year - The fiscal year of the Corporation shall begin on the first
day of January each year.

4. Records - The Certificate of Incorporation, the bylaws, and the proceedings
of all meetings of the shareholders, the Board, and standing committees of
the Board, shall be recorded in appropriate minute books provided for the
purpose. The minutes of each meeting shall be signed by the Secretary or
other officer appointed to act as secretary of the meeting.

5. Inspection - A copy of the bylaws, with all amendments thereto, shall at
all times be kept in a convenient place at the principal place of business
of the Corporation, and for a proper purpose shall be open for inspection
to any shareholder during business hours.

<PAGE>
HUBCO, Inc.

Union City, New Jersey

WAIVER OF NOTICE OF INTENDED ACTION
TO REPEAL AND ALTER BYLAWS BY REVISING THE SAME
-----------------------------------------------

We, the undersigned, being all of the Directors of HUBCO, Inc., a
corporation of New Jersey, do hereby waive any and all notice of the intended
action to repeal the existing Bylaws of HUBCO, Inc. and to alter the same by
adopting a complete revision thereof and do hereby consent to action on such
revision at the Meeting of the Board of Directors to be held on October 20, 1987
or at any subsequent Meeting of the Board of Directors.

/s/ ROBERT J. BURKE /s/ HARRY J. LEBER
---------------------- --------------------------
Robert J. Burke Harry J. Leber

/s/ JOHN T. CLARK /s/ JAMES C. McCLAVE
---------------------- --------------------------
John T. Clark James C. McClave

/s/ ANDREW M. CUOMO /s/ HAROLD J. OLSEN
---------------------- --------------------------
Andrew M. Cuomo Harold J. Olsen

/s/ RONALD L. DAVID /s/ CHARLES F.X. POGGI
---------------------- --------------------------
Ronald L. David Charoles F.X. Poggi

/s/ ARTHUR L. DICKSON /s/ JAMES E. SCHIERLOH
---------------------- --------------------------
Arthur L. Dickson James E. Schierloh

/s/ SHELDON D. GOLDSTEIN /s/ SR. GRACE FRANCES STRAUBER
---------------------- --------------------------
Sheldon s. Goldstein Sr. Grace Frances Strauber

/s/ HENRY G. HUGELHEIM /s/ EDWIN WACHTEL
---------------------- --------------------------
Henry G. Hugelheim Edwin Wachtel

AMENDMENT TO
EMPLOYMENT AGREEMENT
Dated as of January 1, 1995

This Agreement dated as of January 1, 1995 (the "Amendment") is among
Hudson United Bank (the "Bank"), HUBCO, Inc. ("HUBCO"), and Kenneth T. Neilson
("Neilson"), and amends the Employment Agreement dated November 7, 1989 (the
"Employment Agreement") among the same parties.

WHEREAS, the parties wish to amend the Employment Agreement,

It Is Hereby agreed as follows:

1. Whenever "Base Salary" is referred to in the Employment Agreement, it shall
be defined as W-2 compensation, which shall include, but not be limited to,
salary, bonuses, restricted stock awards, and other items of taxable income
included on the W-2 issued by HUBCO or the Bank.

2. "Average annual compensation" shall be computed based upon W-2
compensation.

3. Except as set forth herein, the Employment Agreement shall remain in full
force and effect.

IN WITNESS WHEREOF, HUBCO and the Bank have executed this Amendment by
their duly authorized officers and Neilson has executed this Amendment as his
own voluntary act.

HUBCO, INC.

By:
--------------------------------------------
Kenneth T. Neilson, President & CEO

By:
--------------------------------------------
James E. Schierloh, Chairman

HUDSON UNITED BANK

By:
--------------------------------------------
Kenneth T. Neilson, President & CEO

By:
--------------------------------------------
James E. Schierloh, Chairman

AGREED TO AND ACCEPTED:

----------------------------
Kenneth T. Neilson, Employee

<PAGE>

THIRD AMENDMENT TO
EMPLOYMENT AGREEMENT
Dated as of March 22, 1994

This Agreement, dated as of March 22, 1994 (the "Amendment") is among
Hudson United Bank (the "Bank"), HUBCO, Inc. ("HUBCO"), and Kenneth T. Neilson
("Neilson"), and amends the Employment Agreement dated November 7, 1989 and as
last amended March 23, 1993 (the "Employment Agreement") among the same parties.

WHEREAS, the parties wish to extend the Employment Agreement for one
additional year,

NOW, THEREFORE, the parties agree as follows:

1. The first sentence of Section 5 of the Employment Agreement -- "Term" --
is amended to read as follows:

"The term of this Agreement shall commence November 7, 1989 and continue
until the earlier of (i) the annual meeting of 1997, or (ii) April 30, 1997.

2. Except as set forth herein, the Employment Agreement remains in full
force and effect.

IN WITNESS WHEREOF, HUBCO and the Bank have executed this Amendment by
their duly authorized officer and Neilson has executed this Amendment as his own
voluntary act.

HUBCO, INC.

By: JAMES E. SCHIERLOH
--------------------------------------------
James E. Schierloh, Chairman

HUDSON UNITED BANK

By: JAMES E. SCHIERLOH
--------------------------------------------
James E. Schierloh, Chairman

KENNETH T. NEILSON
--------------------------------------------
KENNETH T. NEILSON

<PAGE>
THIRD AMENDMENT TO
EMPLOYMENT AGREEMENT
Dated as of March 23, 1993

This Agreement, dated as of March 23, 1993 (the "Amendment") is among
Hudson United Bank (the "Bank"), HUBCO, Inc. ("HUBCO"), and Kenneth T. Neilson
("Neilson"), and amends the Employment Agreement dated November 7, 1989 and as
last amended March 24, 1992 (the "Employment Agreement") among the same parties.

WHEREAS, the parties wish to extend the Employment Agreement for one
additional year,

NOW, THEREFORE, the parties agree as follows:

1. The first sentence of Section 5 of the Employment Agreement -- "Term" --
is amended to read as follows:

"The term of this Agreement shall commence November 7, 1989 and
continue until the earlier of (i) the annual meeting of 1996, or (ii) April
30, 1996.

2. Except as set forth herein, the Employment Agreement remains in full
force and effect.

IN WITNESS WHEREOF, HUBCO and the Bank have executed this Amendment by
their duly authorized officer and Neilson has executed this Amendment as his own
voluntary act.

HUBCO, INC.

By: JAMES E. SCHIERLOH
--------------------------------------------
James E. Schierloh, Chairman

HUDSON UNITED BANK

By: JAMES E. SCHIERLOH
--------------------------------------------
James E. Schierloh, Chairman

KENNETH T. NEILSON
--------------------------------------------
KENNETH T. NEILSON

<PAGE>

SECOND AMENDMENT TO
EMPLOYMENT AGREEMENT
Dated as of March 24, 1992

This Agreement, dated as of March 24, 1992 (the "Amendment") is among
Hudson United Bank (the "Bank"), HUBCO, Inc. ("HUBCO"), and Kenneth T. Neilson
("Neilson"), and amends the Employment Agreement dated November 7, 1989 and as
amended May 22, 1991 (the "Employment Agreement") among the same parties.

WHEREAS, the parties wish to extend the Employment Agreement for one
additional year,

NOW, THEREFORE, the parties agree as follows:

1. The first sentence of Section 5 of the Employment Agreement -- "Term" --
is amended to read as follows:

"The term of this Agreement shall commence November 7, 1989 and
continue until the earlier of (i) the annual meeting of 1995, or (ii) April
30, 1995.

2. Except as set forth herein, the Employment Agreement remains in full
force and effect.

IN WITNESS WHEREOF, HUBCO and the Bank have executed this Amendment by
their duly authorized officer and Neilson has executed this Amendment as his own
voluntary act.

HUBCO, INC.

By: JAMES E. SCHIERLOH
--------------------------------------------
James E. Schierloh, Chairman

HUDSON UNITED BANK

By: JAMES E. SCHIERLOH
--------------------------------------------
James E. Schierloh, Chairman

KENNETH T. NEILSON
--------------------------------------------
KENNETH T. NEILSON

<PAGE>

FIRST AMENDMENT TO
EMPLOYMENT AGREEMENT
Dated as of May 22, 1991

This Agreement, dated as of May 22, 1991 (the "Amendment") is among Hudson
United Bank (the "Bank"), HUBCO, Inc. ("Hubco"), and Kenneth T. Neilson
("Neilson"), and amends the Employment Agreement dated November 7, 1989 (the
"Employment Agreement") among the same parties.

WHEREAS, the parties wish to extend the Employment Agreement for an
additional two years,

NOW, THEREFORE, the parties agree as follows:

1. The first sentence of Section 5 of the Employment Agreement -- "Term" --
is amended to read as follows:

"The term of this Agreement shall commence November 7, 1989 and
continue until the earlier of (i) the annual meeting of 1994, or (ii) April
30, 1994."

2. Except as set forth herein, the Employment Agreement remains in full
force and effect.

IN WITNESS WHEREOF, Hubco and the Bank have executed this Amendment by
their duly authorized officer and Neilson has executed this Amendment as his own
voluntary act.

HUBCO, INC.

By: JAMES SCHIERLOH
--------------------------------------------
James Schierloh, Chairman

HUDSON UNITED BANK

By: JAMES SCHIERLOH
--------------------------------------------
James Schierloh, Chairman

KENNETH T. NEILSON
--------------------------------------------
KENNETH T. NEILSON

<PAGE>

EMPLOYMENT AGREEMENT

THIS EMLOYMENT AGREEMENT (the "Agreement"), is made this 7th day of
November 1989, among Hudson United Bank ("Bank"), a New Jersey commercial bank
with its principal office at 3100 Bergenline Avenue, Union City, New Jersey,
HUBCO, Inc. ("Hubco"), a New Jersey Corporation which maintains its principal
office at the same address, (Hubco and the Bank collectively are the
("Company"), and KENNETH T. NEILSON ("Neilson").

BACKGROUND

WHEREAS, Neilson has been employed by the Bank for a number of years in
various capacities and has been president of the Bank and of Hubco, the holding
company for the Bank, since September 1989;

WHEREAS, Neilson throughout his tenure in various capacities developed and
expanded the business of the Bank and Hubco;

WHEREAS, the Board of Directors of the Bank and Hubco believe that the
future services of Neilson are of great value to the Bank and Hubco, and that it
is important for the growth and development of the Bank that Neilson continue in
his positions;

WHEREAS, the Board of Directors of the Bank and Hubco believe that it is
advantageous to provide Neilson with a degree of certainty and protection
concerning his employment

<PAGE>
P. 2

by the Bank and Hubco in order to retain his services and to ensure that Neilson
acts in an objective manner, and without regard to his personal position in
situations where there is an offer or attempt to buy or acquire control of the
Bank or Hubco;

NOW, THEREFORE, in consideration of the mutual covenants hereinafter
expressed, the parties hereto agree as follows:

1. Employment. The Company hereby agrees to employ Neilson, and Neilson
hereby accepts employment, upon the terms and conditions set forth herein.

2. Position. Neilson shall be employed as the president of both Hudson
United Bank and Hubco, to perform such services in those capacities as are usual
and customary for institutions like the Company and as shall from time to time
be established by the Board of Directors of the Company. Neilson shall devote
his full time and attention to the business of the Company and shall not, during
the term of this Agreement, be engaged in any other business activity. This
paragraph shall not be construed as preventing Neilson from managing any
investments of his which do not require any service on his part in the operation
of such investments, nor preventing his service on any other Board of Directors,
subject to the prior approval of the Company's Board of Directors.

3. Cash Compensation. The Company shall pay to Neilson compensation for his
services as follows:

(a) Base Salary. The base salary shall be at the annual

<PAGE>
P. 3

salary in effect as of September 5, 1989, which shall be payable in installments
in accordance with the Company's usual payroll method.

(b) Additional Compensation. The Board of Directors of the Company shall
review annually, or at more frequent intervals which the Board determines is
appropriate, Neilson's compensation and may award him additional compensation to
reflect the impact of inflation, Neilson's performance, the performance of the
Company and competitive compensation levels, all as determined in the discretion
of the Board of Directors. While it has been past policy of the Company to award
Neilson yearly salary increases, additional compensation may take any form
including, but not limited to, increases in the annual salary.

4. Expenses and Fringe Benefits. Throughout the term of this Agreement,
Neilson shall be entitled to reimbursement for all business expenses incurred by
himn with respect to the business of the Company in the same manner and to the
same extent as such expenses were previously reimbursed to him; Neilson shall
also be entitled to the exclusive and unlimited use of an automobile at least
comparable to the automobile provided to him on the date hereof, and to
vacations and sick days in accordance with the practices and procedures of the
Company, as such have existed prior to the date hereof. Throughout the terms of
this Agreement, Neilson also shall be entitled to hospital, health, medical,
dental and life insurance, and any other benefits enjoyed, from time to time,

<PAGE>
P. 4

by senior officers of the Company, all upon terms as favorable as those enjoyed
by other senior officers of the Company. Notwithstanding anything in this
section to the contrary, if the Company adopts any change in the expenses
allowed to, or fringe benefits provided for, senior officers of the Company, and
such policy is uniformly applied go all senior officers, then no such change
shall be deemed to be contrary to this section.

All Restricted Stock Awards which would vest during the term of this
Employment Agreement will be considered vested on their vesting dates, or upon
the termination of employment of Neilson, if without cause. In the event of a
change in control (as defined in Section 10 of this Agreement), all shares
vesting within the term of this Employment Agreement, plus the next year, will
be deemed vested upon an occurrence of a change in control.

5. Term. The term of this Agreement shall commence on the date hereof and
continue until the annual meeting of 1992. The Company and Neilson may agree on
the first anniversary of this Agreement, and on each anniversary thereafter, to
extend the term of this Agreement by an additional year. This Agreement may be
terminated prior to the end of the term by the Company only for cause, or due to
the death of Neilson.

6. Termination for Cause. The Company shall have the right to terminate
Neilson for cause, upon written notice to him of the termination which shall
specify the reasons

<PAGE>
p. 5

for the termination. In the event of such termination, Neilson shall not be
entitled to any benefits under this Agreement. The Company acknowledges that it
is fully familiar with the ability, competence and judgment of Neilson, and
acknowledges, on the basis of such experience, that such qualities of Neilson
are satisfactory to the Company. Consequently, any faults with which the Board
of Directors of the Company is familiar on the date hereof shall not constitute
grounds for discharge of Neilson for cause. Termination "for cause" under this
Agreement shall mean termination of employment due to material misfeasance or
malfeasance, or a material breach of fiduciary duty to the Company or its
stockholders.

7. Disability. If Neilson becomes disabled, as that term reasonably may be
defined from time to time by the Long-Term Disability Insurance Policy in effect
for the officers of Hudson and Hubco, the Company may terminate the employment
of Neilson by paying a lump sum cash payment in the amount of one year's salary.

8. Death Benefits. This Agreement shall terminate upon Neilson's death.
Neilson shall be entitled to the benefits of the life insurance policy, but his
estate shall not be entitled to any further benefits under this Agreement.

9. Termination Without Cause. If the Company terminates Neilson's
employment hereunder without cause, prior to the end of the term of this
Agreement, it shall continue to pay Neilson the compensation he is receiving at
the time of such termination until the end of this Agreement. The Company

<PAGE>
p. 6

shall also continue to provide him with hospital, health, medical, dental and
life insurance, and any other benefits, as may be required to be provided
hereunder at the time of the termination of his employment by the Company. All
Restricted Stock Awards which would have vested during the term of this
Employment Agreement will be considered vested on the date of termination.
Neilson shall not have a duty to mitigate the damages suffered by him in
connection with the termination by the Company of his employment without cause.

10. Change in Control. Notwithstanding any other provision of this
Agreement, in the event that the Bank or Hubco shall terminate Neilson's
employment for any reason, except for cause, or if Neilson shall resign his
position pursuant to the Resignation Section of this Agreement, at any time
after a "Change In Control" of the Bank or Hubco has occurred, as hereinafter
defined, the Company shall pay to Neilson on the date of such termination a lump
sum cash payment in an amount equal to two times Neilson's annual salary in
effect on the date immediately preceding the date of such "Change in Control" or
on the date of such termination, whichever is greater. All Restricted Stock
Awards which would have vested during the term of this Employment Agreement will
be considered vested on the date of such termination. For the purpose of this
Section, the following definitions shall apply:

<PAGE>

p. 7

"Change in Control" means the formal agreement of (a) any merger or
consolidation of the Company with or into, or any sale, lease, exchange,
transfer or other disposition of all or any substantial part of the assets of
the Company to, any other person or group of persons acting in concert; (b) the
acquisition by any person or group of persons acting in concert of beneficial
ownership of 25% or more of any class of voting securities of the Company; or
(c) the acquisition by any person or group of persons acting in concert,
directly or indirectly, through the use of proxies or otherwise, of the ability
to elect or appoint a majority of the Board of Directors with the passage of
time. "Person" means any individual, partnership, firm, corporation,
association, trust, unincorporated organization or other entity, as well as any
Group of Persons Acting in Concert. "Group of Persons Acting in Concert" means a
group of persons who (a) knowingly participate in a joint activity or conscious
parallel action towards a common goal, whether or not pursuant to an express
agreement; or (b) combine or pool voting or other interests in the securities of
an issuer for a common purpose pursuant to any contract, understanding,
relationship, agreement or other arrangement, whether written or otherwise.

11. Resignation. If, without the prior written consent of Neilson, the
Company shall change Neilson's title to a downgraded position, reduce his
compensation, force relocation, materially alter the duties, responsibilities or
authority of Neilson, he may resign and be entitled to full payment under this
Agreement.

<PAGE>

p. 8

Should the Company enter into any agreement which would result in a Change
of Control, as defined in Section 10 of this Agreement, Neilson may, upon 60
days' written notice, elect to resign his position with the Bank. In the event
of such a resignation, the Company shall pay Neilson, on the effective date of
such resignation, a lump sum cash payment in an amount equal to two times
Neilson's annual salary.

12. Miscellaneous. This Agreement is the joint and several obligation of
the Bank and Hubco. The terms of this Agreement shall be governed by, and
interpreted and construed in accordance with, the provisions of the laws of New
Jersey. This Agreement supersedes all prior agreements and understandings with
respect to the matters covered hereby. The termination or amendment of this
Agreement may be made in a writing executed by the Company and Neilson, and no
amendment or termination of this Agreement shall be effective unless and until
made in such a writing.

If, after 30 days' written notice given to the Company by Neilson
identifying any failure of the Company to honor any portion of this Agreement,
the Company fails to pay Neilson the compensation, or provide him with the
benefits, due under this Agreement, Neilson shall be entitled to recover from
the Company all of his legal fees and expenses incurred in connection with the
successful enforcement of the terms of this Agreement.

<PAGE>

p. 9

This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, and it shall not be necessary in making proof of
this Agreement to produce or account for more than one such counterpart.

IN WITNESS WHEREOF, Hudson United Bank and HUBCO, Inc. each have caused
this Agreement to be signed by their duly authorized representatives pursuant to
the authority of their Board of Directors, and Kenneth T. Neilson has personally
executeed this Agreement, all as of the day and year first written above.

ATTEST: HUDSON UNITED BANK

DONALD J. BAUMGARTNER By: JAMES C. McCLAVE
--------------------------------- ------------------------------------
Donald J. Baumgartner, Secretary James C. McClave, Chairman

ATTEST: HUBCO, Inc.

DONALD J. BAUMGARTNER By: JAMES C. McCLAVE
--------------------------------- ------------------------------------
Donald J. Baumgartner, Secretary James C. McClave, Chairman

EMPLOYEE

KENNETH T. NEILSON
------------------------------------
Kenneth T. Neilson, President

AMENDMENT TO
EMPLOYMENT AGREEMENT
Dated as of January 1, 1995

This Agreement dated as of January 1, 1995 (the "Amendment") is among
Hudson United Bank (the "Bank"), HUBCO, Inc. ("HUBCO"), and D. Lynn Van
Borkulo-Nuzzo ("Van Borkulo-Nuzzo"), and amends the Employment Agreement dated
May 24, 1990 (the "Employment Agreement") among the same parties.

WHEREAS, the parties wish to amend the Employment Agreement and to extend
the Term thereof,

It Is Hereby agreed as follows:

1. The term of the Employment shall be extended through December 31, 1998.

2. Whenever "Base Salary" is referred to in the Employment Agreement, it shall
be defined as W-2 compensation, which shall include, but not be limited to,
salary, bonuses, restricted stock awards, and other items of taxable income
included on the W-2 issued by HUBCO or the Bank.

3. "Average annual compensation" shall be computed based upon W-2
compensation.

4. Except as set forth herein, the Employment Agreement shall remain in full
force and effect.

IN WITNESS WHEREOF, HUBCO and the Bank have executed this Amendment by
their duly authorized officers and Van Borkulo-Nuzzo has executed this Amendment
as her own voluntary act.

HUBCO, INC.

By:
------------------------------------
Kenneth T. Neilson,
President & C.E.O.

By:
------------------------------------
James E. Schierloh,
Chairman

HUDSON UNITED BANK

By:
------------------------------------
Kenneth T. Neilson,
President & C.E.O.

By:
------------------------------------
James E. Schierloh,
AGREED TO AND ACCEPTED: Chairman

-----------------------------------
D. Lynn Van Borkulo-Nuzzo, Employee

<PAGE>

AMENDMENT TO
EMPLOYMENT AGREEMENT
Dated as of October 26, 1992

This Agreement, dated as of October 26, 1992 (the "Amendment") is among
Hudson United Bank (the "Bank"), HUBCO, Inc. ("HUBCO"), and D. Lynn Van
Borkulo-Nuzzo ("Van Borkulo-Nuzzo"), and amends the Employment Agreement dated
May 24, 1990 (the "Employment Agreement") among the same parties.

WHEREAS, the parties wish to extend the Employment Agreement for two
additional years,

NOW, THEREFORE, the parties agree as follows:

"The term of this Agreement shall commence May 24, 1990 and continue until
October 26, 1995.

2. Except as set forth herein, the Employment Agreement remains in full
force and effect.

IN WITNESS WHEREOF, HUBCO and the Bank have executed this Amendment by
their duly authorized officer and Van Borkulo-Nuzzo has executed this Amendment
as her own voluntary act.

HUBCO, INC.

By: KENNETH T. NEILSON
-------------------------------------
Kenneth T. Neilson, President

By: JAMES E. SCHIERLOH
-------------------------------------
James E. Schierloh, Chairman

HUDSON UNITED BANK

By: KENNETH T. NEILSON
-------------------------------------
Kenneth T. Neilson, President

By: JAMES E. SCHIERLOH
-------------------------------------
James E. Schierloh, Chairman

AGREED TO AND ACCEPTED:

D. LYNN VAN BORKULO-NUZZO
-----------------------------------
D. Lynn Van Borkulo-Nuzzo, Employee

<PAGE>
3100 BERGENLINE AVENUE
[HUBCO LOGO] UNION CITY, NEW JERSEY 07087
TELEPHONE: 201-348-2327-8

May 24, 1990

D. Lynn Van Borkulo, Esq.
Mountain Avenue
West Paterson, New Jersey 07424

Dear Ms. Van Borkulo:

The Board of Directors of HUBCO, INC. ("Hubco") has determined that it is
in the best interests of Hubco and its subsidiary bank, Hudson United Bank (the
"Bank") for Hubco and the Bank (collectively, the "Corporation") to agree, as
provided herein, to pay you termination compensation in the event you should
leave the employ of the Corporation under the circumstances described below.

The Board recognizes that the continuing possibility of a change of control
(as hereafter defined) of the Corporation is unsettling to you and other senior
executives. Therefore, these arrangements are being made to help assure
continuing dedication by you to your duties to the Corporation notwithstanding
the threat or occurrence of a change of control. The Corporation believes that,
consequently, these arrangements will inure to the benefit of the Corporation.
In particular, the Board believes it important, should the Corporation receive
proposals from third parties with respect to its future, to enable you, without
being influenced by the uncertainties of your own situation, to assess and
advise the Board whether such proposals would be in the best interests of the
Corporation and its shareholders and to take such other action regarding such
proposals as the Board might determine to be appropriate. The Board also wishes
to demonstrate to executives of the Corporation that the Corporation is
concerned with the welfare of its executives and intends to see that loyal
executives are treated fairly.

In view of the foregoing and in further consideration of your continued
employment with the Corporation, the Corporation will promptly pay you as
termination compensation a lump sum amount, without any offset, determined as
provided below, in the event that within two (2) years after any change of
control of the Corporation your employment with the

<PAGE>
--2--

Corporation is terminated by the Corporation for any reason, other than your
death, permanent disability, or for cause (as hereafter defined). Moreover, you
will also be entitled to the same lump sum termination compensation again
without any offset, in the event within two (2) years after any change of
control of the Corporation you resign from your employment with the Corporation
for good reason (as hereafter defined).

The lump sum compensation so payable shall be equal to one times the
highest annual base salary which was in effect during the three years preceding
your termination or resignation (but in no event may such lump sum, plus the
cost to the Corporation of the benefits provided below and other vesting benefit
accelerations (such as an acceleration in vesting for restricted stock awards)
included in the calculation of parachute payments, equal or exceed three times
your average annual compensation during the five years preceding your
termination or resignation, all calculated in accordance with, and intended to
avoid the penalties for excess parachute payments under the provisions of
Section 280G of the Internal Revenue Code of 1986).

In addition, in the event your employment with the corporation so
terminates within two (2) years after such a change of control of the
Corporation, then for a one year period following such termination of employment
you will be entitled (at the Corporation's expense) to continue to participate
(under the terms in effect prior to the termination of your employment) in the
benefits offered under the Corporation's medical, hospitalization, life
insurance and disability plans, subject to any limitations on such participation
provided by such plans and provided that you shall not be entitled to continue
such participation beyond your normal retirement date. In the event
participation in any such plan is so limited, the Corporation will provide you
during such period with equivalent benefits.

In the event of termination of employment under the circumstances described
above within two (2) years after a change of control, you also shall be entitled
to purchase from the Corporation the automobile then assigned to you by the
Corporation for your use at its then book value determined in accordance with
customary policies.

For the purpose of this agreement, a "change of control" means the
execution by Hubco of any formal agreement relating to (a) any merger or
consolidation, plan of acquisition or plan of exchange of Hubco with or into, or
any sale, lease, exchange, transfer or other disposition outside of the ordinary
course of business of all or substantially all of the assets of Hubco to, any
other person or group of persons acting in concert,

<PAGE>
--3--

except (i) with respect to any such transaction, a change of control shall not
be deemed to have occurred if the formal agreement is terminated or the
transaction is otherwise not consummated for any reason, (ii) with respect to
any merger, consolidation, plan of acquisition or plan of exchange, a change of
control shall not be deemed to have occurred if following such transaction the
persons who were directors of Hubco immediately prior to entering into such
agreement constitute a majority of the Board of Directors of the surviving
public corporation after such transaction, and (iii) with respect to any such
transaction, a change of control shall not be deemed to have occurred if the
transaction was ordered or arranged by any bank regulatory agency; (b) the
acquisition by any person or group of persons acting in concert of beneficial
ownership of 35% or more of any class of voting securities of Hubco; or (c) the
acquisition by any person or group of persons acting in concert, directly or
indirectly, through the use of proxies or otherwise, of the ability to elect or
appoint a majority of the Board of Directors of Hubco with the passage of time.
"Person" means any individual, partnership, firm, corporation, association,
trust, unincorporated organization or other entity, as well as any Group of
Persons Acting in Concert. "Group of Persons Acting in Concert" means a group of
persons who (a) knowingly participate in a joint activity or conscious parallel
action towards a common goal, whether or not pursuant to an express agreement;
or (b) combine or pool voting or other interests in the securities of an issuer
for a common purpose pursuant to any contract, understanding, relationship,
agreement or other arrangement, whether written or otherwise.

For the purpose of this agreement, you shall have "good reason" to resign
within two (2) years following any change of control if any of the following
occurs without your prior written consent, (i) you are assigned a title,
position, duties or responsibilities inconsistent with your title, position,
duties or responsibilities immediately prior to the change of control; (ii) your
annual base salary is decreased (unless the Corporation is acquired by another
bank or bank holding company and such decrease is consistently applied to all
officers of the acquiring institution as well) or you are not awarded salary
increases or bonuses consistent with the salary increases or bonuses provided to
you before the change in control; (iii) you are deprived of or required to pay
more for any benefits made available to you immediately prior to the change of
control, such as the use of a company owned car, hospital and medical benefit
plans, restricted stock awards, pension benefits or reimbursement for business
expenses (unless any such changes are applied to all officers of the Corporation
generally); or (iv) following your request after a change of control for written
confirmation that the Corporation

<PAGE>
--4--

(or its successor) agrees to perform its obligations hereunder, the Corporation
fails to provide you with such reassurance within 15 days.

For purposes of this agreement, "cause" shall mean your willful and
repeated significant actions or omissions against the best interests of the
Corporation after written notice to refrain from such action, or conviction for
a crime other than any traffic or parking violation.

This agreement shall terminate three (3) years from the date hereof unless
prior to such date there has been a change of control. This agreement shall not
effect any rights of the Corporation or you prior to a change of control and
prior to any change of control your employment may be terminated for any reason
without triggering your rights hereunder and following such termination this
agreement shall cease.

You shall not be required to mitigate any payments provided for hereunder
by seeking other employment, nor shall any payment be reduced by any
compensation earned as the result of other employment after the date of
termination. However, with regard to benefits only, the Corporation need not
continue to pay for benefits if you receive substantially similar benefits from
any new employment.

Following any termination of your employment, you shall retain in
confidence any confidential information known to you concerning the Corporation
and its business so long as such information is not publicly disclosed.

This Agreement shall be binding upon and inure to the benefit of you, your
estate and the Corporation and any successor of the Corporation, but neither
this Agreement nor any rights arising hereunder may be assigned or pledged by
you.

For purposes of this Agreement, all references to the Corporation shall
include and refer to both the Corporation and the Bank. This Agreemant shall be
construed in accordance with the laws of the State of New Jersey. If after 30
days' written notice given to the Corporation identifying any failure of the
Corporation to honor any portion of this agreement, the Corporation fails to
pay to you the compensation, or provide you the benefits due under this
agreement, you shall be entitled to recover from the Corporation all of your
legal fees and expenses incurred in connection with the successful enforcement
of the terms of this agreement.

<PAGE>
--5--

If you are in agreement with the foregoing, please so indicate by signing
and returning to Hubco the enclosed copy of this letter, whereupon this letter
shall constitute a binding agreement between you and the Corporation, which may
not be amended, cancelled or supplemented except in a writing signed by the
parties hereto.

Very truly yours,

HUBCO, INC.

By: KENNETH T. NEILSON
----------------------------------------
Kenneth T. Neilson, President

By: JAMES McCLAVE
----------------------------------------
James McClave, Chairman

HUDSON UNITED BANK

By: KENNETH T. NEILSON
----------------------------------------
Kenneth T. Neilson, President

By: JAMES McCLAVE
----------------------------------------
James McClave, Chairman

AGREED TO AND ACCEPTED:

-----------------------------
D. Lynn Van Borkulo, Employee

HUBCO, INC. DIRECTORS DEFERRED COMPENSATION PLAN

Effective as of February 1, 1995, HUBCO, Inc. (the "Company") hereby
establishes the HUBCO, Inc. Directors Deferred Compensation Plan (the "Plan").
The Plan is intended to constitute an unfunded pension plan maintained for
members of the Board of Directors who are not employees of the Company. The
purpose of the Plan is to provide a means by which the payment of Directors fees
and Committee fees can be postponed for future enjoyment while at the same time
giving the Company the present use of the fees postponed. The Plan is not an
employee pension benefit plan within the meaning of Section 3(2) the Employee
Retirement Income Security Act of 1974, as amended. The Plan is not a qualified
plan under the Internal Revenue Code of 1986, as amended. The Plan is intended
to comply with the provisions of Revenue Ruling 71-419, 1971-2 C.B. 220.
Benefits are paid directly by the Company out of its general assets.

-1-

<PAGE>

ARTICLE I

Definitions

1.1 "Account Balance" means the sum of the Fees credited to the
Participants and interest accrued thereon pursuant to Article III.

1.2 "Board of Directors" means the Board of Directors of the Company.

1.3 "Code" means the Internal Revenue Code of 1986, as amended.

1.4 "Company" means HUBCO, Inc. and any members of the controlled group of
corporations of which it is a member within the meaning of Section 414(b) of the
Code, which with the consent of the Board of Directors of HUBCO, Inc. adopts
this Plan.

1.5 "Compensation Committee" means the Compensation Committee of the Board
of Directors.

1.6 "Eligible Member" means any outside director of the Board of Directors
other than an honorary director or director emeritus.

1.7 "Fees" means all fees received by a Participant including retainers,
regular meeting fees, committee fees and special meeting fees.

1.8 "Participant" means an Eligible Member who becomes a Participant
pursuant to Article II.

1.9 "Plan" means this HUBCO, Inc. Directors Deferred Compensation Plan, as
set forth herein, as amended from time to time.

1.10 "Plan Year" means each twelve (12) consecutive month

-2-
<PAGE>

period commencing each January 1 and ending on the following December 31.

1.11 For purposes of this Plan, unless the context requires otherwise, the
masculine includes the feminine, the singular the plural, and vice-versa. Any
reference to a "Section" or "Article" shall mean the indicated section or
article of this Plan unless otherwise specified.

-3-
<PAGE>
ARTICLE II

Participation

2.1 Election

An Eligible Member will become a Participant upon filing a Notice of
Participation with the Compensation Committee within thirty days after the
Effective Date of this Plan. Fees will be deferred pursuant to the Notice of
Participation effective as of the first day of the month after filing the
Notice.

In the case of an individual elected to fill a vacancy by the Board of
Directors or stockholders after the Effective Date of this Plan, the Eligible
Member will become a Participant, if a Notice of Participation is filed within
thirty days after election to the Board of Directors and will apply to Fees
received after such Notice of Participation is filed. An Eligible Member may
elect to defer either 100% or 50% of his Fees. A separate election may be made
with respect to Fees paid as a retainer.

2.2 Continuance of Participation

After an individual becomes a Participant in this Plan, his membership
shall continue until his Account Balance is distributed to him or his designated
beneficiary in full. A Participant may elect to cease deferring at any time
under this Plan by filing a Notice of Termination with the Compensation
Committee.

-4-
<PAGE>

ARTICLE III

Interest Credits

Amounts deferred by a Participant pursuant to Section 2.1 shall be credited
with interest at the highest rate Hudson United Bank is paying from time to time
on passbook savings and will be compounded and credited to the account of each
Participant in the same manner as interest on such passbook savings account.

ARTICLE IV

Death Benefits

4.1 Death Benefit

If a Director dies while actively serving in such capacity, or prior to
receipt of all installments under Article V, payment of the Participant's
remaining Account Balance shall be made to his designated Beneficiary in a lump
sum as of the 1st day of January next following the date of his death.

4.2 Designated Beneficiary

A Participant shall designate a beneficiary on the Notice of Participation
to receive any remaining Account Balance following his death. In the event the
Participant fails to designate a beneficiary, or the beneficiary predeceases
him, payment shall be made to the surviving spouse, or if there is no surviving
spouse, the estate.

-5-
<PAGE>
ARTICLE V

Time of Payment

5.1 Termination of Director Status

A Participant's Account Balance shall be paid in a lump sum within thirty
days after the date he ceases to serve as a Director or in ten annual
installments beginning with the 1st day of date of the calendar year immediately
following the date he ceases to serve as a Director. Each subsequent annual
payment of the Participant's Account Balance shall be paid on January 1st. A
Participant shall choose whether payment will be made in a lump sum or in
installments when he files the Notice of Participation with the Compensation
Committee.

5.2 Notice of Termination

If a Participant files a Notice of Termination with the Compensation
Committee pursuant to Section 2.2, the election method chosen in the Notice of
Participation shall be disregarded and payment of the Participant's Account
Balance shall be made in ten annual installments commencing with the 1st day of
the calendar year immediately following the date the Notice of Termination is
filed.

5.3 Acceleration of Payment

Notwithstanding the foregoing Sections, the Compensation Committee shall
accelerate any remaining installments and make payment in a lump sum within
thirty days after occurrence of one of following events:

-6-
<PAGE>

(a) If a former Director becomes a proprietor, officer, partner, employee
or otherwise becomes affiliated with any business that is in competition
with the Company; or

(b) If a former Director becomes disabled or incurs a hardship, which
constitutes an unforeseeable emergency. An unforeseeable emergency is a
severe financial hardship of the Participant resulting from a sudden and
unexpected illness or accident of the Participant or of a dependant (as
defined in Section 152(a) of the Code) of the Participant, loss of the
Participant's property due to casualty, or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the
control of the Participant. Payment may not be made to the extent that such
hardship is or may be relieved:

(i) Through reimbursement or compensation by insurance
or otherwise;

(ii) By liquidation of the Participant's assets, to the extent the
liquidation of such assets would not itself cause sever financial
hardship; or

(iii) By cessation of deferrals under the Plan.

Lump sum distributions of amounts because of an unforeseeable emergency
must only be permitted to the extent reasonably needed to satisfy the
emergency need.

ARTICLE VI

Administration

6.1 Compensation Committee

The Compensation Committee shall supervise the management and
administration of the Plan.

6.2 Responsibilities and Powers of the Compensation Committee

The Compensation Committee shall have the responsibility:

(a) To administer the Plan in accordance with the terms hereof, and to
exercise all powers specifically conferred upon

-7-

<PAGE>

the Compensation Committee hereby or necessary to carry out the provisions
thereof;

(b) To keep all records relating to Participants of the Plan and such other
records as are necessary for proper operation of the Plan.

(c) The Compensation Committee shall be responsible for construing this
Plan, which construction shall be conclusive, correcting any defects,
supplying omissions, and reconciling inconsistencies to the extent
necessary to effectuate the Plan.

6.3 Operation of the Compensation Committee

In carrying out the Compensation Committee's functions hereunder:

(a) The Compensation Committee may adopt rules and regulations necessary
for the administration of the Plan and which are consistent with the
provisions hereof.

(b) All acts and decisions of the Compensation Committee shall be approved
by a majority of the members of the Compensation Committee and shall apply
uniformly to all Participants in like circumstances. Written records shall
be kept of all acts and decisions.

(c) The Compensation Committee may authorize one or more of its members to
act on its behalf. The Compensation Committee may also delegate, in
writing, any of its responsibilities and powers to an individual(s) who is
not a Committee member.

(d) The Compensation Committee shall have the right to hire, at the expense
of the Bank, such professional assistants and consultants as it, in its
sole discretion, deems necessary or advisable, including, but not limited
to, accountants, actuaries, consultants, counsel and such clerical
assistance as is necessary for proper discharge of its duties.

6.4 Indemnification

In addition to any other indemnification that a fiduciary, including but
not limited to a member of the Compensation Committee is entitled to, the
Company shall indemnify such fiduciary from all

-8-

<PAGE>

claims for liability, loss or damage (including payment of expenses in
connection with defense against such claim) arising from any act or failure to
act which constitutes a breach of such individual's fiduciary responsibilities
with respect to this Plan under any aspects of the law.

ARTICLE VII

Miscellaneous

7.1 Benefits Payable by the Company

All benefits payable under this Plan constitute an unfunded obligation of
the Company. Payments shall be made, as due, from the general funds of the
Company. The Company, at its option, may maintain one or more bookkeeping
reserve accounts to reflect its obligations under the Plan and may make such
investments as it may deems desirable to assist it in meeting with obligations.
Any such investments shall be assets of the Company subject to claims of its
general creditors. No person eligible for a benefit under this Plan shall have
any right, title to, or interest in any such investments. Participants are
general unsecured creditors of the Company. This Plan constitutes a mere promise
to pay benefits in the future.

7.2 Amendment or Termination

(a) The Board of Directors of HUBCO, Inc. reserves the right to amend,
modify, or restate or terminate the Plan; provided, however, that no such action
by the Board of Directors shall reduce

-9-

<PAGE>

a Participant's existing Account Balance. Any amendment to the Plan shall be
made in writing by HUBCO's Board of Directors, with or without a meeting, or
shall be made in writing by the Compensation Committee to the extent that
HUBCO's Board of Directors has specifically delegated the authority to make such
amendment to the Plan the Compensation Committee.

(b) If the Plan is terminated, a determination shall be made of each
Participant's Account Balance as of the Plan termination date (determined in
accordance with Section 7.2(a)). Each Participant's Account Balance shall be
payable to the Participant at the time it would have been payable under Articles
IV and V if the Plan had not been terminated; provided, however, that HUBCO's
Board of Directors may elect to instead immediately distribute all Participants'
Account Balances in lump sums upon Plan termination.

7.3 Payments to Incompetents

If a Participant entitled to receive any benefits hereunder is adjudged to
be legally incapable of giving valid receipt and discharge for such benefits,
they will be paid to the duly appointed guardian of such incompetent or to such
other legally appointed person as the Compensation Committee might designate.
Such payment shall, to the extent made, be deemed a complete discharge of any
liability for such payment under the Plan.

7.4 Inalienability of Benefits

The right of any person to any benefit or payment under the Plan shall not
be subject to voluntary or involuntary transfer, alienation or assignment, and,
to the fullest extent permitted by

-10-

<PAGE>

law, shall not be subject to attachment, execution, garnishment, sequestration
or other legal or equitable process. In the event a person who is receiving or
is entitled to receive benefits under the Plan attempts to assign, transfer or
dispose of such right, or if an attempt is made to subject said right to such
process, such assignment, transfer or disposition shall be null and void.

7.5 Governing Law

The provisions of the Plan will be construed according to the laws of the
State of New Jersey.

-11-

MANAGEMENT ANALYSIS

FINANCIAL REVIEW

This financial review presents management's discussion and analysis of operating
results and financial condition. It should be read in conjunction with the
audited consolidated financial statements and the accompanying notes beginning
on page 27 of this report. Unless otherwise noted, all dollar amounts are
presented in thousands. All per share amounts have been retroactively adjusted
for the three-for-two common stock split on January 14, 1995.

OVERVIEW

During 1994, the Company made use of its strong capital position to once again
take advantage of acquisition opportunities in northern New Jersey, continuing
its strategy to attempt to enhance profitability and build market share through
both internal growth and acquisitions. In addition, the Company successfully
raised new capital through a private placement of $25 million of subordinated
debentures and issued $19 million of preferred stock in connection with its
acquisition of Washington Bancorp, Inc. As a result of these factors, HUBCO
achieved record results in three key financial areas: earnings, asset base and
stockholders' equity. Net income rose 19% to a level of $16.9 million in 1994
from $14.2 million in 1993; assets increased by 32% to $1.377 billion at
December 31, 1994 from $1.042 billion at year-end 1993; and stockholders' equity
reached $99.0 million, a 25% increase over the 1993 level of $79.0 million. In
addition, HUBCO increased its regular quarterly cash dividend from $.12 per
share in the first two quarters to $.15 per share in the third and fourth
quarters. When combined with the January 1995 three for two common stock split,
the continued regular

Return on Average Assets
[Chart]

1989 .......... 0.62% 3309 530556
1990 .......... 0.40% 2215 549704
1991 .......... 0.82% 5021 610297
1992 .......... 1.05% 9641 918116
1993 .......... 1.44% 14202 987894
1994 .......... 1.35%

dividend rate of $.15 increases the cash payout by 88%.

Highlights of the Company's 1994 financial accomplishments include:

o Return on average stockholders' equity was 19.44% for 1994. This compares
to 19.34% in 1993 and 17.38% in 1992.

o Net interest margin was 5.09%, despite the higher rates paid on acquired
deposits and a reduction in overall yield on the blended investment
portfolios.

o Personnel expense as a percent of average total assets decreased to 1.58%
in 1994, down from 1.67% in 1993. The decrease was achieved despite the
absorption of the personnel related to three acquisitions.

o Efficiency ratio, which measures operating expense as a percentage of
recurring tax equivalent income, was held to 54.9% despite the absorption
of expenses related to the terminated Statewide acquisition, a major
computer conversion and the purchase of a new headquarters building.

ACQUISITIONS

HUBCO's acquisition philosophy is to seek in-market or contiguous market
opportunities which HUBCO believes can be accomplished with little dilution to
earnings. When evaluating acquisitions, HUBCO conducts a due diligence review to
attempt to identify both risks and income potential and then attempts to
structure a transaction which allows it to manage the risk while earning a fair
return on the investment. HUBCO considers both government-assisted and private
transactions.

In 1994, the Company consummated three acquisitions. On May 6, 1994, the
Company, through Hudson United Bank, acquired four branches, deposits and
certain assets of Polifly Federal Savings and Loan Association ("Polifly") from
the Resolution Trust Corpora-

Stockholder's Equity
[Chart]

1992 ........... 68.313
1993 ........... 78.954
1994 ........... 99.980

<PAGE>

tion ("RTC"). The purchase price for the acquisition was $6.2 million. On July
1, 1994, the company consummated its merger with Washington Bancorp, Inc.
("Washington") for a combination of cash and convertible preferred stock with an
aggregate value of approximately $40.5 million and acquired the eight branches
of Washington Savings Bank. In connection with the Washington acquisition, the
Company assumed deposits of $237.8 million, received $7.1 million in cash and
cash equivalents, and acquired $91.4 million in securities and $168.5 million in
loans.

On December 7, 1994, the Bank acquired Shoppers Charge Accounts Co. ("Shoppers")
for approximately $16.3 million in cash. The Bank recorded approximately $63.4
million in assets and $46.9 million in liabilities as a result of this
acquisition. The difference reflects the shareholders' equity of Shoppers ($13.2
million) and purchase accounting adjustments of $3.3 million.

All of the above transactions were accounted for under the purchase method of
accounting.

In 1993, the Company acquired six branches, the deposits and certain assets of
Pilgrim State Bank from The Ramapo Bank. The purchase price for the acquisition
was $6 million.

In November 1994, the Company and its subsidiary Bank agreed to acquire
Jefferson National Bank for common stock with an aggregate consideration of
approximately $9.2 million. In the transaction, Jefferson's common shares will
be converted into 2.844 shares of HUBCO common stock. As part of the merger,
Jefferson will be merged into the Company's banking subsidiary, Hudson United
Bank. As of December 31, 1994, Jefferson reported total assets, deposits and
stockholders' equity of $91.6 million, $85.4 million and $5.4 million,
respectively. The transaction will be accounted for as a pooling of interests.

The significant financial information relative to the 1994 and 1993 acquisitions
is discussed in Note (2) to the financial statements.

Asset Growth
[Chart]

1989 .......... 548.132 506.607 8.20%
1990 .......... 595.128 548.132 8.57%
1991 .......... 673.159 595.128 13.11%
1992 .......... 931.911 673.159 38.44%
1993 .......... 1041.825 931.911 11.79%
1994 .......... 1377 1041.825 32.17%

RESULTS OF OPERATIONS

Earnings Summary

HUBCO earned net income of $16,931, or $1.64 per share on a fully diluted basis
in 1994 compared to $14,202, or $1.37 per share, in 1993 and $9,641, or $1.06
per share, in 1992. Key factors contributing to HUBCO's strong earnings
improvement in 1994 were increases in net interest income and total non-interest
income of $11,003, or 23.4%, and $1,384, or 16.1%, respectively. A decrease of
$600, or 16.7%, in the provision for possible loan losses also contributed to
1994's earnings enhancement. Partially offsetting the 1994 gains were increases
in total operating expenses and in the provision for income taxes of $8,033, or
26.8%, and $2,225, or 28.3%, respectively.

For the year ended December 31, 1993, the reported earnings of $14,202
represented an increase of $4,561, or 47.3%, compared with 1992. The increase
was primarily attributable to increases of $6,005, and $949 in net interest
income and total non-interest income and to decreases in total operating
expenses and the provision for possible loan losses of $4,378 and $516,
respectively. Partially offsetting the 1993 gains was an increase in the
provision for income taxes of $7,287.

Net Interest Income

The Company's principal source of revenue is its net interest income, which is
the difference between the interest earned on assets and interest paid on the
funds acquired to support those assets. The principal interest earning assets
are loans made to businesses and individuals, investment securities and federal
funds sold in the inter-bank market. Net interest income is affected by the
balances and mix of interest-earning assets and interest-bearing liabilities and
changes in their corresponding yield and costs, and by the volume of interest
earning assets funded by non-interest bearing deposits.

The table presented on page 8 shows, for the three years ended December 31,
1994, 1993 and 1992 the average distribution of assets, liabilities and
stockholders' equity and the interest earned or paid on related items, as well
as the Company's net yield on interest earning assets (i.e., net interest income
divided by average interest earning assets). Non-taxable income from loans and
investment securities is presented on a tax-equivalent basis whereby tax-exempt
income is adjusted upward by an amount equivalent to the prevailing federal
income taxes that would have been paid if the income had been fully taxable. The
assumed tax rate was 35% in 1994 and 1993 and 34% in 1992.

In 1994, net interest income on a fully tax-equivalent basis increased to
$58,927 from $47,771 in 1993, an increase of $11,156, or

<PAGE>

DISTRIBUTION OF ASSETS, LIABILITIES AND STOCKHOLDERS' EQUITY:

INTEREST RATES AND INTEREST DIFFERENTIALS

(In Thousands of Dollars)

1994 1993 1992
----------------------------- ----------------------------- -----------------------------
Average Yield/ Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate Balance Interest Rate
------- -------- ----- ------- -------- ----- --------- --------- -------
ASSETS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Interest Earning Assets:
Taxable Loans(1) ........ $ 593,292 $49,754 8.39% $517,761 $43,240 8.35% $505,464 $45,004 8.90%
Nontaxable Loans(1) ..... 6,740 571 8.47 5,182 471 9.09 6,026 609 10.11
Taxable Investment
Securities ............ 514,256 31,989 6.22 345,845 22,350 6.46 278,119 19,991 7.19
Nontaxable Investment
Securities ............ 33,019 2,019 6.11 23,403 1,680 7.18 16,015 1,374 8.58
Federal Funds Sold and
Securities Purchased
Under Agreements to
Resell ................ 11,312 476 4.21 25,895 771 2.98 32,782 1,342 4.09
---------- ------- -------- ------- -------- -------

Total Interest Earning
Assets ................ 1,158,619 84,809 7.32 918,086 68,512 7.46 838,406 68,320 8.15
Non-Interest Earning Assets:
Cash and Due
from Banks ............ 53,473 42,699 48,812
Premises and
Equipment, Net ........ 24,996 17,603 14,277
Accrued Interest
Receivable ............ 11,401 8,291 8,346
Other Assets ............ 20,185 10,216 15,710
Less Allowance for
Possible Loan
Losses ................ (12,850) (9,001) (7,435)
---------- -------- --------
TOTAL ............ $1,255,824 $987,894 $918,116
========== ======== ========

LIABILITIES AND STOCKHOLDERS' EQUITY
Interest Bearing Liabilities:
Demand Deposits ......... $ 146,722 $ 4,056 2.76% $112,836 $ 3,095 2.74% $ 97,494 $ 3,256 3.34%
Savings Deposits ........ 451,410 11,393 2.52 342,540 8,833 2.58 278,925 9,094 3.26
Time Deposits ........... 297,903 8,025 2.69 251,128 8,451 3.37 303,029 13,744 4.54
Federal Funds Purchased
and Securities Sold
Under Agreements to
Repurchase ............ 22,798 557 2.44 14,603 333 2.28 14,500 480 3.31
Subordinated Notes ...... 24,110 1,736 7.20 -- -- -- -- -- --
Other ................... 2,723 115 4.22 938 29 3.09 1,269 59 4.65
---------- ------- -------- ------- -------- -------
Total Interest Bearing
Liabilities ........... 945,666 25,882 2.74 722,045 20,741 2.87 695,217 26,633 3.83
Non-Interest Bearing
Liabilities:
Demand Deposits ....... 215,573 185,848 152,397
Other ................. 7,508 6,550 15,035
---------- -------- --------
1,168,747 914,443 862,649
Stockholders' Equity .... 87,077 73,451 55,467
---------- -------- --------
TOTAL ............ $1,255,824 $987,894 $918,116
========== ======== ========

Net Interest
Earnings .............. $58,927 $47,771 $41,687
======= ======= =======

Net Yield on Interest
Earning Assets ........ 5.09% 5.20% 4.97%
===== ===== =====

Tax Equivalent Adjustments:
Loans ................. $ 200 $ 165 $ 207
Investment Securities . 706 588 467
----- ----- -----
TOTAL ............ $ 906 $ 753 $ 674
===== ===== ======
-------------
<FN>
(1) For the purpose of these computations, non-accruing loans are included in
the daily average loan amount outstanding. Fees are included in loan
interest. Loans and total interest earning assets are net of unearned
income.
</FN>
</TABLE>

<PAGE>

23.4%. This increase was due to an increase of $16,912, or 8.6%, in net average
interest earning assets (average interest earning assets less average interest
bearing liabilities) and the maintenance of the spread between the yield on
interest earning assets and the rate on interest bearing liabilities.

Interest income on a tax-equivalent basis increased by $16,297, or 23.8%, during
1994 due to an increase of $240,533 in the volume of average interest earning
assets. The additional volume generated increased interest earnings of $17,017,
which were offset by $720 due to a decline in overall yield of 14 basis points.
The most significant contribution came from the investment portfolio, where the
increase in average volume of $178,027, or 48.2%, caused an earnings increase of
$11,114, which was only partially offset by a $1,136 reduction in earnings due
to a decline in the blended rate of 30 basis points. The loan portfolio, with an
increase of 3 basis points in the blended rate, contributed an additional net
increase to interest earnings of $6,614, 97% of which was attributable to the
$77,089 in increased average volume. Interest expense increased by $5,141, or
24.8%, during 1994. The increase in volume of interest bearing liabilities of
$223,621, or 31.0%, created additional interest expense of $7,149, which was
reduced in part by a $2,008 savings resulting from a decline in the overall cost
of funds of 13 basis points. The most significant increase in terms of volume
was in savings deposits, which show an average balance increase of $108,870, or
31.8%. The resulting net increase in related interest expense of $2,560
represents 50% of the total increase in the cost of funds. The issuance of the
subordinated debentures at a net cost of $1,736 comprise another 33.8% of the
interest expense increase.

Yield/rate, which plays as significant a role in interest earnings as does
volume, continued to show overall declines for 1994, although by

Earnings Comparision
[Chart]

1989 .......... 3309 3.309
1990 .......... 2215 2.215
1991 .......... 5021 5.021
1992 .......... 9641 9.641
1993 .......... 14202 14.202
1994 .......... 16931 16.931

year-end rates had moved upward. Changes in yield/rate are affected by market
conditions, non-performing asset levels, accounting strategies, etc. From 1992
through 1994, yields on the loan and investment portfolios decreased as a result
of general declines in market interest rates. In 1994, the interest income
impact of non-performing loans lowered the yield on taxable loans by 11 basis
points, compared to 12 basis points in 1993 and 9 basis points in 1992. In
addition, 1994's loan yield was reduced by 8 basis points attributable to the
mark-to-market accounting for the acquired Washington loans. In direct contrast
1994's investment portfolio yield was enhanced by 9 basis points related to the
mark-to-market accounting for the acquired Washington securities. On the expense
side, the Company incurred additional costs related to the negative net impact
of an 8 basis point adjustment on savings and time deposit interest.

In 1993, net interest income increased to $47,771 from $41,687 in 1992, an
increase of $6,084, or 14.6%. This increase was due to an increase of $52,852,
or 36.9%, in net average interest earning assets and a greater decline in
interest rates on interest bearing liabilities (96 basis points) than the
corresponding decline in yield on interest earning assets (69 basis points).

Interest income on a tax-equivalent basis increased by $192, or .3%, during 1993
despite an increase of $79,680 in average interest earning asset volume. A key
factor in the moderate increase was the decrease in yield on total interest
earning assets--from 8.15% in 1992 to 7.46% in 1993--which significantly
reduced any gain in interest earnings as a result of volume. However, the
increase in the average investment portfolio of $75,114, or 25.5%, more than
offset the decreased average yield on the portfolio and posted a net increase to
earnings of $2,665. The increase in average loan volume of $11,453, or 2.2%,
during 1993 was not significant enough to offset the decreased average yield on
the portfolio. Interest expense decreased by $5,892, or 22.1%, during 1993.
Although the volume of interest bearing liabilities increased by $26,828, or
3.9%, the decrease of 96 basis points in the cost of funds was sufficient to
generate a reduction in interest expense.

The net interest margin, which measures net interest income as a percent of
average earning assets, was 5.09% for 1994, compared with the 1993 and 1992
levels of 5.20% and 4.97%, respectively.

The table on page 10 sets forth the changes in interest income and interest
expense as they relate to changes in volume and rate for the years 1994, 1993
and 1992.

<PAGE>
CHANGES IN NET INTEREST EARNINGS DUE TO VOLUME/RATE

(In Thousands of Dollars)

-------------------------------- ------------------------------------
1994 Compared to 1993 1993 Compared to 1992
Increase/(Decrease) Due To Increase/(Decrease) Due To
Volume Rate Net Volume Rate Net
------ -------- -------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Interest Earned On:

Taxable Loans ............................. $ 6,307 $ 207 $ 6,514 $ 1,072 $(2,836) $(1,764)
Nontaxable Loans .......................... 134 (34) 100 (80) (58) (138)
Taxable Investment Securities ............. 10,498 (859) 9,639 4,530 (2,171) 2,359
Nontaxable Investment Securities .......... 616 (277) 339 557 (251) 306
Federal Funds Sold and
Securities Purchased under
Agreements to Resell ................... (538) 243 (295) (249) (322) (571)
------- ------- ------- ------- ------- -------
Total Interest Earning Assets ...... $17,017 $ ( 720) $16,297 $ 5,830 $(5,638) $ 192
======= ======= ======= ======= ======= =======

Interest Paid On:

Demand Deposits ........................... $ 938 $ 23 $ 961 $ 471 $ (632) $ (161)
Savings Deposits .......................... 2,769 (209) 2,560 1,845 (2,106) (261)
Time Deposits 1,435 (1,861) (426) (2,113) (3,180) (5,293)
Federal Funds Purchased and
Securities Sold Under Agreements
to Repurchase .......................... 199 25 224 3 (150) (147)
Subordinated Notes ........................ 1,736 -- 1,736 -- -- --
Other ..................................... 72 14 86 (13) (17) (30)
------- ------- ------- ------- ------- -------
Total Interest Bearing Liabilities ............ $ 7,149 $(2,008) $ 5,141 $ 193 $(6,085) $(5,892)
======= ======= ======= ======= ======= =======
Net Interest Earnings .............. $ 9,868 $ 1,288 $11,156 $ 5,637 $ 477 $ 6,084
======= ======= ======= ======= ===== =======

</TABLE>

<PAGE>

Provision for Possible Loan Losses

The Company maintains an allowance for possible loan losses at a level
considered by management to be adequate to cover the inherent risk of loss
associated with its loan portfolio. The allowance for possible loan losses is
based on estimates and ultimate losses may vary from the current estimates.
Management formally reviews the loan portfolio and evaluates credit risk on a
quarterly basis throughout the year. Such review endeavors to take into
consideration the financial condition of the borrowers, fair market value of
collateral, level of delinquencies, historical loss experience by portfolio,
industry trends and the impact of local and national economic conditions. See
"Asset Quality".

The provision for possible loan losses was $3,000 for 1994 compared to $3,600
for 1993. The decrease of $600, or 16.7%, resulted from the overall improvement
in the loan portfolio and improvement in the New Jersey real estate environment.
The provision for possible loan losses in 1993 of $3,600 decreased from $4,116
in 1992. The reduced provision in 1993 reflected an improving portfolio compared
to an increase in the provision in 1992 to account for loans acquired in two
acquisitions and to replenish the allowance.

Non-Interest Income

Total non-interest income increased by $1,384, or 16.1%, during 1994 to $9,990.
The increase in total non-interest income in 1993 from 1992, was $949, or 12.4%,
for the year.

Securities losses for the three years ended December 31, 1994, 1993 and 1992
were $337, $0 and $26, respectively. Although the Company's intentions are to
hold its securities until maturity, an analysis of the portfolio has been done
subsequent to each acquisition and sales were transacted in order to maintain
the portfolio within the parameters of the Company's investment policy.

The 20% increase in trust income from $525 in 1993 to $630 in 1994 is due to an
increase in the number of estate and investment management accounts resulting
from a business development program. During 1993, trust income had shown a
slight decline of $66, or 11.2%.

The Company derived $7,528 in service charges on deposit accounts during 1994,
an increase from 1993 of $1,547, or 25.9%. In 1993, income from service charges
on deposit accounts had increased by $1,149, or 23.8%, from 1992. In both
instances, the increased fees are a result of the increased volume in demand
deposit accounts. Average demand deposit accounts (interest bearing and
non-interest bearing) increased by $63,611, or 21.3%, in 1994 and by $48,793, or
19.5%, in 1993 as a result of internal growth and the acquisitions completed in
the respective years.

Other income increased slightly during 1994 by $69, or 3.3%. The increase is
primarily attributable to increases in safe deposit rental income and in the
fees generated on the acquired credit card accounts. Offsetting the additional
fee income in part were decreases in deposit related fee income and in income
from regulatory acquisition-related settlement items. During 1993 other income
had decreased by $160, or 7.1%, due primarily to a decline in annuity sale fees
resulting from the restructuring of the annuity program.

Operating Expenses

Total operating expense increased by $8,033, or 26.8%, to $38,004 during 1994
from $29,971 in 1993. The 1994 total was impacted in many categories by both the
1993 (Pilgrim) and the 1994 (Polifly, Washington and Shoppers) acquisitions as
the costs for the additional locations, with their related staffing, occupancy
and equipment needs, were absorbed. Of the total increase of $8,033, $3,390, or
42.2%, relates to increases in salaries and benefits. This increase is primarily
attributable to the additional personnel expense incurred as a result of the six
Pilgrim branches for an additional six month period ($398); four Polifly
branches for an eight-month period ($337), eight Washington branches for a
six-month period ($531), and Shoppers personnel for one month ($296); an
increase in pension expense based on the actuarial valuation for the current
plan year ($261); and salary increases of approximately 4.0% with the associated
salary-related increases in payroll taxes.

Occupancy expense increased to $4,110 in 1994 from $3,056 in 1993, an increase
of $1,054, or 34.5%. Of that amount, $192 represents costs attributable to the
six additional Pilgrim branches, $179 to operate the four Polifly branches, $300
to operate the eight Washington branches and $42 for Shoppers. The remaining
increase is primarily due to unusual building repair and service costs incurred
as a result of an extremely severe winter season, and costs related to the
Company's new corporate headquarters, which was purchased in April 1994.
Partially reducing these increases were real estate tax refunds arising from
several successful tax appeals. Equipment expense increased during 1994 by $365,
or 18.6%, due primarily to repairs, maintenance and depreciation expense related
to equipment needs at the additional locations and the upgrade of the

<PAGE>

Company's in-house computer systems, including the purchase and installation of
imaged check processing equipment.

The reduction of $68, or 57.1%, in the net cost to operate other real estate is
due to $132 in gains on the sale of foreclosed properties. Deposit and other
insurance fees increased by $549, or 24.3%, due primarily to the increased cost
of FDIC insurance on the larger deposit base. Outside service fees increased to
$2,921 in 1994 from $2,782 in 1993 primarily as a result of the costs associated
with the issuance and registration of the subordinated debentures and preferred
stock. The amortization of intangible assets increased from $0 in 1993 to $1,259
in 1994 as a result of the amortization of the Polifly ($773) and Washington
($486) intangibles.

Other expenses increased to $4,564 in 1994 from $3,258 in 1993, an increase of
$1,306, or 40.1%. Of that amount, $613, or 46.9% of the total increase, is due
to increased acquisition costs. During 1994, the Company absorbed $652 of
expenses associated with the terminated merger agreement with Statewide Savings
Bank. Conversion expenses increased by $293, or 86.7%, related to the new
locations and the installation of voice mail and voice response telephone
systems. The remaining increase is attributable to increased costs for supplies,
postage, etc. required for the additional facilities.

Total operating expense had decreased by $4,378, or 12.7%, to $29,971 during
1993 from $34,349 in 1992. The Pilgrim acquisition impacted many categories as
the costs for six additional branch locations, with their related staffing,
occupancy and equipment needs, were absorbed. Salaries increased by $1,435, or
13.7%, as a result of the increased number of employees and annual salary
increases of approximately 4.0%. Pension and other employee benefits increased
by $1,362, or 42.2%, primarily due to salary-related increases in payroll taxes,
insurance increases, and an increase in the contingent performance bonus
accrual.

Despite the 1993 mid-year addition of the six Pilgrim locations, occupancy
expense decreased during 1993 by $126, or 4.0%, which was achieved through the
closing of a branch, the sale of an office building, the renegotiation of
several acquired leases and significant real estate tax refunds arising from
several successful tax appeals. Equipment expense increased during 1993 by $200,
or 11.4%, due to the additional equipment needs of the acquired Pilgrim
branches.

The reduction of $443, or 78.8%, in the net cost to operate other real estate
during 1993 is the result of a year-end 1992 charitable donation of a $4,000
property, which also explains the decrease of $3,999, or 99.2%, in charitable
contribution expenses for 1993. Other expenses decreased during 1993 by $651, or
16.7%, due primarily to a decrease in operating supplies resulting from the
merger of HUB National Bank into Hudson United Bank, a reduction in telephone
expense generated from the installation of a more efficient system and a
decrease in acquisition costs.

Federal Income Taxes

The Federal income tax provision of $8,397 in 1994 compares with $6,976 in 1993
and $207 in 1992. The 1994 increase of $1,421 over the 1993 tax provision is due
to an increase of $4,954, or 22.5%, in income before the provision for income
taxes. The 1993 increase of $6,769 over the 1992 tax provision of $207 is due to
two non-recurring events which reduced the 1992 provision.

The effective Federal income tax rates for 1994, 1993 and 1992 were 31%, 32%,
and 2%, respectively.

FINANCIAL CONDITION

Total assets at December 31, 1994 increased by $335,297, or 32.2%, over the
prior year-end as a direct result of the three acquisitions and, to a lesser
extent, the issuance of the subordinated debentures. The most significant
changes occurred in the investment and loan portfolios, which increased by
$110,544, or 25.9%, and $197,367, or 38.1%, respectively. Cash and due from
banks showed a modest increase of $3,290, or 6.6%, due to the acquired
correspondent bank accounts, the additional cash required for the new branches
and the reserves required to be maintained at the Federal Reserve Bank to
support the increased deposit levels. Premises and equipment increased by
$14,733, or 81.8%, from $18,001 at December 31, 1993 to $32,734 at December 31,
1994. The increase is attributable to the Company's $4,000 purchase of its new
corporate headquarters, a $2,000 purchase of imaging and related data processing
equipment, and the buildings and equipment acquired through the Polifly,
Washington and Shoppers transactions of approximately $1,300, $5,500, and
$1,600, respectively. Accrued interest receivable increased by $3,134, or 30.5%,
as a result of the increased volume in the loan and investment portfolios. The
deposit increase of $264,045, or 28.2%, was attained through the acquisitions of
Polifly and Washington. Federal funds purchased and securities sold under
agreements to repurchase increased by $10,724, or 54.6%, due to the $14,500
purchase of federal funds at year-end to meet short-term liquidity needs.

<PAGE>

December 31
--------------------------------------------------------
1994 1993 1992
-------- -------- -------
<S> <C> <C> <C>
Loans secured by real estate:
Residential mortgage loans-fixed ...... $ 99,261 $ 81,281 $ 85,887
Residential mortgage loans-variable ... 155,564 68,451 72,580
Residential home equity loans ......... 37,345 38,103 25,578
Construction loans .................... 7,326 7,117 3,777
Commercial mortgage loans ............. 137,196 107,577 115,413
-------- -------- --------
436,692 302,529 303,235
-------- -------- --------
Commercial and industrial loans:
Secured by real estate ................ 96,035 34,789 24,366
Other ................................. 92,557 139,899 130,139
-------- -------- --------
188,592 174,688 154,505
-------- -------- --------
Loans to individuals for household,
family and other personal
expenditures .......................... 108,076 57,548 63,129
-------- -------- --------
$733,360 $534,765 $520,869
======== ======== ========
</TABLE>

At December 31, 1993, total assets had increased $109,914, or 11.8%, over
December 31, 1992, as a direct result of the Pilgrim acquisition. The most
significant change in 1993 was an increase of $104,163, or 32.3%, in the
investment portfolio.

LOAN PORTFOLIO

The Company's loan portfolio at December 31, 1994 totalled $733,360, an increase
of $198,595, or 37.1%, over year-end 1993. Discounting the effect of the three
acquisitions, the portfolio decreased $25,313, or 4.7%, for a number of reasons.
The Company continued to sell fixed rate residential mortgage loans in the
secondary market and to de-emphasize the making of indirect loans, and received
payoffs on certain loans in its portfolio. This was compounded by weak loan
demand in the beginning of the year and strong competition to lend, which
further impacted the limited market of credit worthy borrowers.

The Company's loans are primarily to businesses and individuals located in
northern New Jersey. The table above presents a summary of the Company's loan
portfolio.

At December 31, 1994, residential loans amounted to $292,170, or 39.8%, of the
Company's total loan portfolio. Residential loans are predominantly secured by
one to four family properties in the Bank's primary market area of northern New
Jersey. Loans kept for the Bank's portfolio are primarily underwritten to FNMA
and FHLMC standards. Loan to value ratios are strictly enforced and generally do
not exceed 75%, and terms generally do not exceed 20 years for loans maintained
in the Company's portfolio. Residential mortgage loans increased by $105,093, or
70.2%, as a result of loans obtained through the Washington acquisition.
Discounting the acquired loans of $137,141, residential mortgage loans decreased
by $32,806, or 31.4%, due to payments, refinances, and the sale of newly
generated loans to the secondary market in an effort to build the mortgage
servicing portfolio. From 1992 to 1993, residential loans increased by $3,790,
or 2.1%, as a result of loans obtained through the Pilgrim acquisition.

Construction loans are made only to what the Company views as a select group of
well established local developers. Construction loans are primarily made on
buildings which are generally under contract before being built. The Company
inspects properties prior to advances being made. Construction loans increased
by $209, or 2.9% in 1994 from 1993 due to advances made on existing loans.
During 1993, Construction loans had increased by $3,340, or 88.4%, as a result
of one new loan.

Most of the Company's commercial mortgage loans are for a maximum term of 15
years requiring fixed principal plus interest payments under which the borrower
pays off an equal amount of the principal balance of the loan each month. For
example, a borrower with a loan maturing in five years would pay off 1/60 of the
principal balance of the loan plus interest each month. The effect of such
payment is to reduce the principal balance of the loan more rapidly in the early
years than a traditional amortization schedule or balloon loan. Commercial
mortgage loans increased by $29,619, or 27.5%, from 1993 to 1994. Approximately
$20,156 of the increase was obtained through the Washington acquisition with the
remainder due to normal internal growth. Commercial mortgage loans decreased by
$7,836, or 6.8%, from 1992 to 1993 despite $2,330 in commercial mortgage loans
acquired from Pilgrim. The decrease was primarily attributable to heavy
principal payments on 15 year commercial mortgages and a decline in activity.
The commercial mortgage portfolio is comprised primarily of owner occupied
properties.

<PAGE>

Commercial loans generally are made to companies located within the Bank's
market area and generally consist of loans to operating companies such as
manufacturers, wholesalers and retailers. Commercial borrowers must provide
three years of financial statements along with financial statements of the
individual owners of the borrowing entity. These loans are generally
collateralized and personally guaranteed by such owners. Commercial loans are
made for various purposes including working capital, capital purchase or
expansion. Working capital loans generally are made for a term of one year.
Loans for capital purchases and expansion are generally extended for three to
seven years. Commercial and industrial loans increased by $13,904, or 8.0%,
during 1994, of which $592 was obtained through the Washington acquisition and
the remainder through internal growth. During 1993, commercial and industrial
loans had increased by $20,183, or 13.1%, as a result of the Pilgrim
acquisition, a new business development calling program, and an expanded
customer base generated through the calling program and the establishment of
local advisory boards.

Loans to individuals are installment loans made to individuals, primarily for
automobiles, loans to individuals for personal purposes and credit card
receivables. These loans are underwritten to predetermined income and debt
ratios. The credit card receivables are approved under a credit scoring process
and generally have recourse to the merchants generating the receivable. On
automobile loans, title to the auto is held as collateral. Loans to individuals
increased by $50,528, or 87.8%, as a result of the credit card receivables
acquired from Shoppers. Excluding the Shoppers receivables, loans to individuals
decreased by $11,980, or 20.8%. During 1993, loans to individuals had decreased
$5,581, or 8.8%. In both years, the decreases resulted from the phaseout of our
indirect loan program and weak consumer demand. In addition, customers converted
existing personal loans into home equity loans, which are carried under loans
secured by real estate.

ASSET QUALITY

The Company's principal earning assets are its loans, which are primarily to
businesses and individuals located in New Jersey. Inherent in the lending
function is the risk of deterioration in a borrower's ability to repay loans
under existing loan agreements. Risk elements include nonaccrual, past due and
restructured loans, potential problem loans, loan concentrations and other real
estate.

Although the Company actively solicits credit worthy borrowers, prevailing
market conditions have required a strict monitoring process for credit risk.
This process requires scrutiny at all levels -- the initial application,
analysis of on-going ability to pay according to terms, determination of the
appropriateness of collateral, periodic loan review and the periodic review of
the adequacy of the allowance for possible loan losses.

The following table summarizes the Company's non-performing assets:

December 31
------------------------------------------
1994 1993 1992
------- ------- ------
<S> <C> <C> <C>
Non-accruing Loans:
Commercial ......................................... $5,166 $1,391 $ 1,310
Real Estate ........................................ 4,271 3,398 2,124
Installment ........................................ 480 745 814
------- ------- ------
TOTAL NON-ACCRUING LOANS ............... 9,917 5,534 4,248
Renegotiated Loans ..................................... 539 2,177 2,257
------- ------- ------
TOTAL NON-PERFORMING LOANS ............. 10,456 7,711 6,505

Other Real Estate ...................................... 3,194 2,311 1,252
------- ------- ------
TOTAL NON-PERFORMING ASSETS ............ $13,650 $10,022 $7,757
======= ======= ======

Ratios:
Nonaccruing Loans to Total Loans Outstanding ....... 1.35% 1.03% .82%
Non-Performing Assets to Total Assets .............. .99% .96% .83%
Allowance for Possible Loan Losses to Total
Non-Accruing Loans .............................. 133.39% 195.36% 179.03%
Allowance for Possible Loan Losses to Total
Non-performing Loans ............................ 126.51% 140.20% 116.91%

</TABLE>

<PAGE>

At December 31, 1994, loans past due 90 days or more and still accruing and the
applicable asset quality ratios were as follows:

December 31
-------------------------------
1994 1993 1992
------- ------ ------
Commercial ................................ $ 448 $1,139 $ 589
Real Estate ............................... 1,060 225 647
Installment ............................... 47 79 173
Credit Card Receivables ................... 644 -- --
------ ------ ------
TOTAL LOANS PAST DUE 90 DAYS OR MORE
AND ACCRUING ........................ $2,199 $1,443 $1,409
====== ====== ======

Ratios:
Loans Past Due 90 Days or More and
Accruing to Total Loans Outstanding ... .30% .27% .27%

Loans Past Due 90 Days or More and
Accruing to Total Assets .............. .16% .14% .15%

The amount of interest income on non-performing loans which would have been
recorded had these loans continued to perform under their original terms
amounted to $681, $813, and $563 for the years ended December 31, 1994, 1993 and
1992, respectively. The amount of interest income recorded on such loans was
$109, $193, and $96 for the years ended December 31, 1994, 1993 and 1992,
respectively. The Company has no outstanding commitments to advance additional
funds to borrowers with non-performing loans.

Nonaccruing loans consist of commercial, real estate and installment loans on
which the Company is no longer accruing interest. Nonaccruing commercial loans
are primarily secured and each has an attorney working with the loan officer to
attempt to resolve the problem. Nonaccruing commercial loans increased by
$3,775, or 271.4%, primarily due to the addition of three large commercial loans
totaling $3,600. Two of the loans are secured by real estate with appraisals
supporting the loan balance. Nonaccruing commercial loans increased by $81, or
6.2%, in 1993. As a result of the Pilgrim acquisition, the Company obtained
nonaccruing commercial loans totalling $504. Excluding the acquired loans,
nonaccruing commercial loans decreased in 1993 by $423, or 32.3%.

Nonaccruing real estate loans are principally loans in the foreclosure process
secured by real estate, including single family residential properties,
multi-family and commercial properties. In 1994, nonaccruing real estate loans
increased by $873, or 25.7%, all of which was attributable to the Washington
acquisition. From 1992 to 1993, nonaccruing real estate loans increased by
$1,274, or 60.0%, due to a poor regional economy and the long foreclosure
process in New Jersey. Management does not anticipate incurring a material loss
from the resolution of these loans.

Nonaccruing installment loans are loans to individuals. Excluding the credit
card receivables, these loans are principally secured by automobiles or real
estate. During 1994, nonaccruing installment loans decreased by $265, or 35.6%.
At December 31, 1993, nonaccruing installment loans were $745, or .7%, of the
consumer portfolio which represented a decrease of $69, or 8.5%, from the
December 31, 1992 balance.

Renegotiated loans are loans which are renegotiated to assist borrowers after
the borrower has suffered adverse effects in financial condition. Terms are
tailored to fit the ability of the borrower to repay in line with the Company's
objective of obtaining repayment. This category consists primarily of commercial
loans. The decrease in renegotiated loans from 1992 to 1993 of $80, or 3.5%, is
the result of principal reductions made by the borrowers. The decrease in
renegotiated loans from 1993 to 1994 of $1,638, or 75.2%, is due to three large
commercial loans returning to performing status net of the addition of three
smaller restructured loans.

Other real estate ("ORE") consists of properties on which the Bank has completed
foreclosure proceedings. Before a property is placed in ORE, a current appraisal
is received to determine current market value. An environmental study and report
is also received on all nonresidential commercial mortgages. Loans are written
down to market value before being moved to ORE.

At December 31, 1994, ORE had increased to $3,194, an increase of $883, or
38.2%, as a

<PAGE>

result of the foreclosed properties acquired from Washington. The increase of
$1,059, or 84.6%, in ORE from 1992 to 1993 is due to the foreclosures on four
commercial properties and the addition of a $500 commercial property acquired
from Pilgrim.

All costs associated with the holding and maintaining of the ORE properties are
expensed as incurred.

At December 31, 1994, total non-performing loans had increased to $10,456, an
increase of $2,745, or 35.6%, primarily as a result of the Washington
acquisition which brought approximately $18,000 of new non-performing loans to
the Company on July 1, 1994. However, as a percentage of total loans,
non-performing loans decreased from 1.44% in 1993 to 1.43% in 1994. Total
non-performing loans increased from $6,505 at December 31, 1992 to $7,711 at
December 31, 1993, an increase of $1,206, or 18.5%, all of which is attributable
to the non-performing loans acquired from Pilgrim.

Measures to control and improve the level of non-performing loans are
continuing. Efforts are made to identify slow paying loans and generally
collection procedures are instituted. After identification, steps are taken to
understand the problems of the borrower and to work with the borrower toward
resolving the problem, if practicable. Continuing collection efforts are a
priority for the Bank.

Loans past due 90 days or more and still accruing consist of commercial, real
estate and installment loans which are experiencing temporary difficulties. Such
loans are categorized as accruing if the Bank believes that the delinquency is
temporary and the loan is adequately collateralized and in the process of
collection. Loans which are not expected to be resolved on a timely basis are
put on nonaccrual status and collection efforts continue. The increase from 1993
to 1994 in loans past due 90 days or more is acquisition-related, with $644 of
the total increase of $756 representing acquired past due credit card
receivables. The remaining increase is due to the Washington acquisition. The
increase in loans past due 90 days or more from 1992 to 1993 of $34, or 2.4% was
primarily due to increases in overall loan volume, coupled with poor economic
conditions.

Loan concentrations are considered to exist when there are amounts loaned to
separate borrowers engaged in similar activities which would cause them to be
similarly impacted by economic or other conditions. At December 31, 1994, 1993
and 1992, there were no concentrations of loans exceeding 10% of total loans
which are not otherwise disclosed as a category on the consolidated balance
sheets included elsewhere in this Annual Report.

The allowance for possible loan losses at year-end 1994 was $13,228, an increase
of $2,417

<PAGE>

The following is a summary of the activity in the allowance for possible loan
losses, by loan category:

Year Ended December 31
-------------------------------------------
1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
Amount of Loans Outstanding at End of Year .......... $733,360 $534,765 $520,869
======== ======== ========

Daily Average Amount of Loans ....................... $587,182 $529,340 $520,305
======== ======== ========

Balance of Allowance for Possible
Loan Losses at Beginning of Year ................ $ 10,811 $ 7,605 $ 6,698
Loans Charged Off:
Commercial, Financial and Agricultural .......... (190) (637) (4,622)
Real Estate-- Construction ...................... (--) (--) (--)
Real Estate-- Mortgage .......................... (5,701) (138) (227)
Installment ..................................... (201) (283) (337)
Lease Financing ................................. (13) (122) (355)
-------- ------- -------
Total Loans Charged Off ............................. (6,105) (1,180) (5,541)
-------- ------- -------
Recoveries of Loans Previously Charged Off:

Commercial, Financial and Agricultural .......... 531 141 609
Real Estate-- Construction ...................... -- -- --
Real Estate-- Mortgage .......................... 129 59 8
Installment ..................................... 104 104 57
Lease Financing ................................. 41 82 158
-------- ------- -------
Total Recoveries .................................... 805 386 832
-------- ------- -------
Net Loans Charged Off ............................... (5,300) (794) (4,709)
Provision Charged to Expense ........................ 3,000 3,600 4,116
Additions Acquired Through Acquisitions ............. 4,717 400 1,500
-------- ------- -------
Balance at End of Year .............................. $ 13,228 $ 10,811 $ 7,605
======== ======== =======

Ratios

Net Loans Charged Off to
Average Loans Outstanding .................... .90% .15% .91%
Allowance for Possible Loan
Losses to Average Loans
Outstanding .................................. 2.3% 2.0% 1.5%

</TABLE>

compared to year-end 1993. The allowance at year-end 1994 represents 1.80% of
total loans outstanding, compared to 2.02% at year-end 1993. Management formally
reviews the loan portfolio and evaluates credit risk on at least a quarterly
basis throughout the year. Such review takes into consideration the financial
condition of the borrowers, fair market value of collateral, level of
delinquencies, historical loss experience by category, industry trends and the
impact of local and national economic conditions.

INVESTMENT PORTFOLIO

The Company maintains an investment portfolio to fund increased loans or
decreased deposits. The portfolio is composed of select investments that the
Company believes are suitable for the Company and which it believes will perform
reasonably well under various interest rate scenarios. These investments are of
high quality and extremely liquid.

In May 1993, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 115, "Accounting for Certain Investments in
Debt and Equity Securities" ("SFAS 115"). SFAS 115 requires entities to classify
their securities into either a held-to-maturity, available-for-sale or trading
category. Each of these classifications requires a different basis of
accounting. Held-to-maturity securities are accounted for at amortized cost with
fair value changes not recognized. Available-for-sale securities are accounted
for at fair value with fair value changes reported as a net of tax amount in a
separate component of stockholders' equity. Trading securities are accounted for
at fair value with fair value changes reported in the income statement. SFAS 115
is effective for fiscal years beginning after December 15, 1993. The Company
adopted this standard as of December 31, 1993.

<PAGE>

The following table summarizes the composition of the investment portfolio as of
December 31, 1994 and 1993:

1994
----------------------------------------------------------
Gross Unrealized Estimated
Amortized ---------------------- Market
Cost Gains (Losses) Value
--------- ------- --------- ---------
<S> <C> <C> <C> <C>
Held to Maturity
U.S. Government .......................... $225,434 $ 4 $ (6,407) $219,031
U.S. Government Agencies ................. 224,954 32 (13,286) 211,700
States and Political Subdivisions ........ 23,152 50 (358) 22,844
Other securities ......................... 4,958 20 (154) 4,824
-------- ------- -------- --------
$478,498 $ 106 $(20,205) $458,399
======== ======= ======== ========
Available for Sale
U.S. Government .......................... $33,196 $ 11 $ (374) $ 32,833
U.S. Government Agencies ................. 15,013 -- (360) 14,653
States and Political Subdivisions ....... 580 -- (2) 578
Other securities ......................... 1,000 -- -- 1,000
Equity securities ........................ 8,385 1,405 (123) 9,667
-------- ------- -------- --------
$ 58,174 $ 1,416 $ (859) $58,731
======== ======= ======== =======

1993
----------------------------------------------------------
Gross Unrealized Estimated
Amortized ---------------------- Market
Cost Gains (Losses) Value
--------- ------- --------- ---------
<S> <C> <C> <C> <C>
Held to Maturity
U.S. Government ........................... $104,957 $ 2,648 $(125) $107,480
U.S. Government Agencies .................. 164,850 3,104 (651) 167,303
States and Political Subdivisions ......... 23,815 496 (4) 24,307
Other securities .......................... 2,508 94 -- 2,602
-------- ------- -------- --------
$296,130 $ 6,342 $ (780) $301,692
======== ======= ======== ========

Available for Sale
U.S. Government ........................... $104,728 $ 5,580 $ -- $110,308
U.S. Government Agencies .................. 10,482 502 (1) 10,983
States and Political Subdivisions ......... 1,600 237 -- 1,837
Other securities .......................... 2,107 223 (5) 2,325
Equity securities ......................... 4,916 381 (195) 5,102
-------- ------- -------- --------
$123,833 $ 6,923 $ (201) $130,555
======== ======= ======== ========

</TABLE>

The investment portfolio increased by $110,544 or 25.9% to $537,229 at December
31, 1994 from $426,685 at the end of the prior year. The increase resulted from
the inflow of funds generated by the assumption of the Polifly deposits and the
$89.9 million in investments acquired from the Washington acquisition.

The Company analyzed the portfolio impact of Washington Bancorp and the Shoppers
Charge acquisitions and reallocated its securities between Held to Maturity and
Available for Sale. In the Shoppers transaction, securities were utilized to
fund the purchase of the credit card portfolio. At December 31, 1994,
approximately 10.9% of the total portfolio was "Available for Sale", compared to
30.6% of the total portfolio at December 31, 1993. The mark-to-market impact of
SFAS 115 resulted in an increase in the carrying value of the Available For Sale
portfolio of $557 and $6,722 in 1994 and 1993, respectively. Of the total
increase in Held to Maturity, approximately $182 million, $120 million of the
increase was in U.S. Governments and $60 million in U.S. Government Agencies. Of
the total increase in Held to Maturity of approximately $150 million were
invested in maturities of one to five years; $28 million in 5 to 10 years; and
$11 million in mortgage backed securities. Generally, it is the investment
policy to invest in maturities of 5 years or less on a laddered basis primarily
in U.S. Treasury and Agency obligations.

<PAGE>

Investments increased by $104,163, or 32.3%, from $322,522 at December 31, 1992
to $426,685 at December 31, 1993. Of that amount, $6,722 represents the SFAS 115
mark-to-market adjustment; $31,781 represents the securities acquired from
Pilgrim and the remainder of the increase is due to purchases that were
primarily funded by declines in loans and federal funds sold.

DEPOSITS

The Company's branch system includes 45 branch offices located primarily in
Bergen, Essex, Hudson and Passaic counties, with one branch each in Middlesex
and Morris Counties, New Jersey. The system is divided into four administrative
regions. The Bergen region consists of 13 branches located in Bergen County. The
Essex region contain 8 Essex County branches while 13 branches located in Hudson
County and one in Middlesex comprise the Hudson region. The Passaic region is
made up of 9 branches located in Passaic County and one in Morris County. Each
branch operates as a retail sales and service unit offering a complete line of
deposit and loan products.

In the face of increased competition from mutual funds and credit unions,
depositors remained very selective during 1994 as to the placement of their
funds. The acquisitions were the key factor in the posted deposit growths for
1994 and 1993 of $264,045, or 28.2%, and $92,462, or 10.9%, respectively.
Excluding the acquired deposits, total deposits at December 31, 1994 decreased
by $81,698, or 8.7%, mainly from the deposits acquired.

The following table summarizes the Company's deposit base:

At December 31
------------------------------------------
1994 1993 1992
---------- --------- ---------
Non-interest Bearing Deposits .... $ 209,655 $ 205,233 $ 171,178
NOW Accounts ..................... 199,845 114,604 103,181
Savings Deposits ................. 441,525 380,112 299,990
Time Certificates of Deposit
of $100,000 or more ............ 48,979 23,651 23,695
Other Time Deposits .............. 299,729 212,088 245,182
---------- --------- ---------
$1,199,733 $ 935,688 $ 843,226
========== ========= =========

Non-interest bearing demand deposits, for which all financial institutions
compete, increased to $209,655 at December 31, 1994, a growth of $4,422, or
2.2%. The Company acquired $12,053 in demand deposits from Polifly and $9,161
from Washington. Excluding the acquired deposits, demand deposits decreased by
$16,792, or 8.2%. Most of the decline represents movement into interest bearing
NOW accounts. Demand deposits had increased by $34,055, or 19.9%, during 1993 as
a result of the Pilgrim acquisition ($21,361) and internal growth.

NOW accounts increased in 1994 by $85,241, or 74.4%. Of that amount, $10,915
represents accounts acquired from Washington, while the remainder is primarily
attributable to customer movement from non-interest bearing demand accounts and
traditional savings accounts. The 1993 increase in NOW accounts of $11,423, or
11.1%, was generated by the $16,513 in NOW accounts obtained through the Pilgrim
acquisition.

Savings deposits increased to $441,525 at December 31, 1994 from $380,112 at
December 31, 1993, an increase of $61,413, or 16.2%. Of that amount, $26,354 was
acquired from Polifly. Washington provided $103,379 in savings deposits, of
which a substantial portion transferred to NOW accounts due to higher interest
rates. During 1993, savings deposits increased by $80,122, or 26.7%, of which
$65,434 represents acquired Pilgrim deposits and the remainder was internal
growth.

Time certificates of deposit of $100,000 or more increased during 1994 by
$25,328, or 107.1%, due to the acquired deposits. Time certificates of deposit
of $100,000 or more had been flat from 1992 to 1993.

Other time deposits increased in 1994 by $87,641, or 41.3%, due to the acquired
deposits. Excluding the acquired addition of $154,051, net runoff in other time
deposits was $66,410, or 31.3%. During 1993, other time deposits, excluding the
Pilgrim addition of $17,891, showed a net runoff of $50,985, or 20.8%. In each
case, other time deposits were reduced as high-yielding certificates matured and
depositors sought alternative investment products outside of the banking
industry where a greater return could be obtained. During the second quarter of
1995, the Company will begin offering other investment products through its
branches to satisfy the needs of its depositors.

OTHER ASSETS AND OTHER LIABILITIES

Other assets increased by $15,146, or 227.8%. Of that amount, $9,645, or 63.7%
of the total increase was generated by recording intangible assets arising from
the Polifly and Washington acquisitions. An increase of $932 in accounts
receivable and increases in

<PAGE>

inventories, prepaid expenses, and suspense items made up the remainder of the
increase. At December 31, 1993, the other assets total of $6,648 was primarily
composed of $352 in accounts receivable, $1,460 in deferred tax assets, $2,575
in inventories and prepaid expenses, $1,757 in transit suspense items, and $504
in miscellaneous.

Other liabilities increased by $15,462, or 204.7%, from $7,554 at December 31,
1993 to $23,016 at December 31, 1994. The increase is attributable to the
$16,275 note payable arising from the December closing of the Shoppers
acquisition. Cash payment took place in January 1995 in settlement of the note.
At December 31, 1993, other liabilities had increased by $1,315, or 21.1%,
primarily due to temporary increases in suspense items.

INTEREST RATE SENSITIVITY

Interest rate movements and deregulation of interest rates have made managing
the Company's interest rate sensitivity increasingly important. The Company's
Asset and Liability Committee is responsible for monitoring and managing the
Company's exposure to changes in market interest rates. The Committee attempts
to maintain a stable net interest margin by repricing and reallocating assets
and liabilities within the competitive banking environment.

The difference between the volume of assets and liabilities that reprice in a
given period is the interest sensitivity gap. A "positive" gap results when more
assets than liabilities mature or are repriced in a given time frame.
Conversely, a "negative" gap results when there are more liabilities than assets
maturing or being repriced during a given period of time. The smaller the gap,
the less the effect of market volatility on net interest income. Asset/liability
management is the utilization of this information to develop strategies to
allocate funds to certain types of assets and offer different liability products
to achieve a certain asset-liability balance and to produce the desired profit
margins.

In certain instances, where a trend in market interest rates is determined, it
may be advantageous to selectively mismatch asset and liability repricing to
take advantage of short term interest rate movements and the shape of the yield
curve. The Company's ratio of rate sensitive assets to rate sensitive
liabilities was approximately 50% on December 31, 1994, based on contractual
maturities and asset prepayment assumptions for the next 12 months. Because of
weak loan demand, the Company has been purchasing fixed rate bonds with proceeds
received from the reduction of federal funds and the funds received in
conjunction with the acquisitions. The effect of this is a negative gap position
which in a declining interest rate environment will increase the Company's net
interest spread as the cost of the Company's deposits and other liabilities may
be expected to fall faster than the interest received on its earning assets.
Conversely, if interest rates increase, the negative gap means that interest
received on earning assets may be expected to increase more slowly than the
interest paid on the Company's liabilities, therefore decreasing the net
interest spread. The negative gap is evaluated together with the magnitude of
change anticipated in different asset and liability categories. Because most
deposits are core (checking and savings), the magnitude of interest rate change
in these core accounts is estimated to be less than 50% of any prime rate change
and the effect of a rate change on the net interest margin would be less than
would be expected in a company with less core deposits.

The Company has managed its overall asset/liability sensitivity through balance
sheet pricing strategies. The Company could use, but is not limited to, interest
rate swaps, covered call option contracts and future contracts. On March 18,
1994, HUBCO entered into an interest rate exchange agreement (the "Agreement")
for the purpose of hedging the interest rate related to the Debentures. The
Agreement is a contractual agreement between HUBCO and its counterparty to
exchange fixed and floating rate interest obligations without exchange of the
underlying notional amount of $25,000. The agreement was entered into in an
effort to lower the overall cost of borrowings. Such agreement involves interest
rate risk. If interest rates increase, the benefit resulting from the agreement
will be diminished. The notional principal amount is used to express the volume
of the transaction involved in this agreement; however, this amount does not
represent exposure to credit loss. HUBCO's counterparty to the Agreement is the
fixed rate payor on the Agreement and HUBCO is the floating rate payor on the
Agreement. The floating rate is reset every three months. The term of this
agreement is 3 years.

Interest rate swaps generally involve the exchange of fixed and floating rate
interest payments between two parties without the exchange of the related
notional amount. A covered call option contract requires the maker to deliver,
upon exercise, an underlying security at a fixed "strike" price. Future
contracts can also limit interest rate sensitivity by hedging underlying assets
and liabilities from adverse movement of interest rates.

<PAGE>

The following table shows the gap position of the Company at December 31, 1994:

INTEREST RATE SENSITIVITY ANALYSIS

December 31, 1994

(In Thousands)

Due Between
Due Within 91 Days Due After Non-Interest
90 Days and One Year One Year Bearing Total
--------- ------------- --------- ------------ ----------
<S> <C> <C> <C> <C> <C>
ASSETS
Securities ........................................ $ 11,486 $ 49,204 $ 476,539 $ -- $ 537,229
Total Loans ....................................... 256,342 192,624 280,208 -- 729,174
Non-Interest Bearing Assets ....................... -- -- -- 110,719 110,719
--------- --------- --------- --------- ----------
Total Assets ...................................... $ 267,828 $ 241,828 $ 756,747 $ 110,719 $1,377,122
Percent of Total Assets ........................... 19.45% 17.56% 54.95% 8.04% 100.00%
========= ========= ========= ========= ==========
SOURCE OF FUNDS

Interest-Bearing Deposits ......................... $ 856,700 $ 133,378 $ -- $ -- $ 990,078
Short-Term Borrowings ............................. 30,353 -- -- -- 30,353
Long-Term Debt .................................... -- -- 25,000 -- 25,000
Other Liabilities ................................. -- -- -- 232,671 232,671
Stockholders' Equity .............................. -- -- -- 99,020 99,020
--------- --------- --------- --------- ----------
Total Source of Funds ............................. $ 887,053 $ 133,378 $ 25,000 $ 331,691 $1,377,122
Percent of Total Source of Funds .................. 64.41% 9.69% 1.81% 24.09% 100.00%
========= ========= ========= ========= ==========
Interest Rate Sensitivity Gap .................... $(619,225) $ 108,450 $ 731,747 $(220,972)
--------- --------- --------- ---------
Cumulative Interest Rate Sensitivity Gap .......... $(619,225) $(510,775) $ 220,972
--------- --------- ---------

</TABLE>

LIQUIDITY

Liquidity is a measure of the Company's ability to generate sufficient cash flow
in order to meet all current and future financial obligations and commitments as
they arise. One source of cash flow for liquidity purposes is provided by
maturing loans and investments. However, the primary source of liquidity is the
ability to attract new deposits and to renew deposit obligations as they mature.
The Company utilizes its branch banking system to access retail customers who
provide a highly stable source of "core funds." These funds are comprised of
demand deposits, savings accounts and certificates of deposit.

The Company may also purchase federal funds or arrange other short term
borrowings for specific purposes as necessary, including to effect its interest
rate sensitivity management.

The Company actively manages its liquidity position under the direction of both
the Asset and Liability Committee and the Investment Committee. Periodic review
under prescribed policies and procedures is intended to ensure that the Company
will maintain adequate levels of available funds. At December 31, 1994, the
Company's primary and secondary liquidity ratios were well above stated policy.

CAPITAL

Capital adequacy is a measure of the amount of capital needed to sustain asset
growth while providing safety for depositors' funds represented by shareholders'
investments acting as a means to absorb unanticipated losses. The Company
regularly evaluates its requirements for equity capital and long-term debt.

The Board of Governors of the Federal Reserve System has issued rules requiring
banks and bank holding companies to maintain minimum levels of capital as a
percentage of risk weighted assets. Under these rules, a banking organization's
assets and certain off-balance sheet activities are classified into categories,
with the least capital required for the category deemed to have the least risk
and the most capital required for the category deemed to have the most risk. The
Board of Governors has also issued leverage capital adequacy standards under
which banking organizations must maintain a minimum ratio of Tier I capital to
adjusted total assets of at least 3.00% to 5.00%. At December 31, 1994, the
minimum capital ratio required for the Company was 4.00% for Tier I capital and
8.00% for total qualifying capital. At December 31, 1994 the Company exceeded
the requirements with Tier I capital of 12.08%, total capital of 16.71% and a
leverage ratio of 6.28%.

<PAGE>

The bank is also subject to similar but separate capital adequacy guidelines
promulgated by the FDIC. As of December 31, 1994, the Bank's Tier I capital
ratio was 11.50%, its total capital ratio was 12.75%, and its leverage ratio was
5.96%.

On June 1, 1993, the Company paid a ten percent stock dividend to stockholders
of record May 11, 1993 which resulted in the issuance of 628,011 new shares of
common stock.

On November 8, 1993, HUBCO's Board of Directors authorized a stock repurchase
plan and authorized management to repurchase up to 10% of its outstanding common
stock per year beginning immediately. At that time, HUBCO had approximately 6.9
million shares outstanding. As of December 31, 1994, HUBCO had repurchased
858,121 shares of common stock at a cost of $12.5 million.

On January 14, 1994, HUBCO sold $25 million aggregate principal amount of
subordinated debt in a private placement. The subordinated debentures bear
interest at 7.75% per annum payable semi-annually. The debentures mature in 2004
(i.e. ten years after the date of original issuance). The subordinated debt has
been structured to comply with the current rules of the FRB regarding debt which
will qualify as Tier 2 capital under the FRB capital adequacy rules.

The following table summarizes the capital ratios as of December 31, 1994:

RATIOS AT DECEMBER 31, 1994
--------------------------------------
1994 MINIMUM HUDSON HUBCO, INC.
CAPITAL RATIOS REQUIREMENTS* UNITED BANK & SUBSIDIARIES
-------------- ------------ ----------- --------------
<S> <C> <C> <C>
Tier I Capital ................ 6.0% 11.50% 12.08%
Total Qualifying Capital ...... 10.0% 12.75% 16.71%
Leverage Ratio ................ 5.0% 5.96% 6.54%

--------------
<FN>
* For qualification as a well-capitalized institution.

</FN>
</TABLE>

At the end of the reported period, there were no known uncertainties that will
have or that are reasonably likely to have a material effect on the Company's
liquidity, capital resources or operations; nor is the Company aware of any
current recommendations by the regulatory authorities which, if they were to be
implemented, would have such an effect.

The Company had no material commitments for capital expenditures as of December
31, 1994.

<PAGE>
CONSOLIDATED BALANCE SHEETS

HUBCO, INC. and Subsidiaries
<TABLE>
<CAPTION>
December 31,
--------------------------
(in thousands, except share data) 1994 1993
---------- ----------
<S> <C> <C>
ASSETS
Cash and due from banks (Notes 3 and 20) .................................. $ 52,832 $ 49,542
Federal funds sold ........................................................ -- 9,800
---------- ----------
TOTAL CASH AND CASH EQUIVALENTS .................................. 52,832 59,342
---------- ----------
Securities (Notes 4 and 20)--
Available for sale, at market value (amortized cost of
$58,174 and $123,833 for 1994 and 1993, respectively) .............. 58,731 130,555
Held to maturity, at cost (market value of $458,399 and
$301,692 for 1994 and 1993, respectively) .......................... 478,498 296,130
---------- ----------
TOTAL SECURITIES ................................................. 537,229 426,685
---------- ----------
Loans (Notes 5, 7 and 20):
Real estate--mortgage .................................................. 378,505 246,647
Commercial and financial ............................................... 188,062 178,827
Consumer credit ........................................................ 99,216 109,291
Credit card ............................................................ 67,577 --
---------- ----------
733,360 534,765
---------- ----------
Less:
Allowance for possible loan losses (Note 6) ............................ 13,228 10,811
Deferred loan fees ..................................................... 1,149 676
Unearned income ........................................................ 3,037 4,699
---------- ----------
NET LOANS ........................................................ 715,946 518,579
---------- ----------

Premises and equipment, net (Note 9) ...................................... 32,734 18,001
Accrued interest receivable ............................................... 13,393 10,259
Other real estate ......................................................... 3,194 2,311
Other assets (Notes 2 and 10) ............................................. 21,794 6,648
---------- ----------
TOTAL ASSETS ..................................................... $1,377,122 $1,041,825
========== ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits:
Noninterest bearing .................................................... $ 209,655 $ 205,233
Interest bearing ....................................................... 990,078 730,455
---------- ----------
TOTAL DEPOSITS ................................................... 1,199,733 935,688
---------- ----------
Federal funds purchased and securities sold under agreements
to repurchase .......................................................... 30,353 19,629
Accrued taxes and other liabilities ....................................... 23,016 7,554
---------- ----------
TOTAL LIABILITIES ................................................ 1,253,102 962,871
---------- ----------
Subordinated debt (Note 12) ............................................... 25,000 --
---------- ----------
COMMITMENTS AND CONTINGENCIES (Notes 16 and 17)
STOCKHOLDERS' EQUITY (Notes 13, 14 and 15):
Preferred stock -- Series A, no par value; authorized 3,300,000
shares, issued 797,811 and outstanding 788,811 shares in 1994 .......... 19,147 --
Common stock, no par value; authorized 19,800,000 shares; issued
10,400,042 and outstanding 9,610,374 and issued 6,933,361 and
outstanding 6,724,661 shares in 1994 and 1993, respectively ............ 18,492 18,492
Additional paid-in capital ................................................ 49,048 49,048
Retained earnings ......................................................... 25,647 12,669
Treasury stock, at cost, 789,668 and 208,700 common shares in
1994 and 1993, respectively, and 9,000 preferred shares in 1994 ........ (11,723) (4,571)
Restricted stock award .................................................... (1,266) (946)
Unrealized holding (loss) gain on securities
available for sale, net of income taxes ................................ (325) 4,262
---------- ----------
TOTAL STOCKHOLDERS' EQUITY ....................................... 99,020 78,954
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ....................... $1,377,122 $1,041,825
========== ==========
</TABLE>

The accompanying notes to consolidated financial statements are an integral part
of these balance sheets.

<PAGE>

CONSOLIDATED STATEMENTS OF INCOME

HUBCO, INC. and Subsidiaries
<TABLE>
<CAPTION>
For The Years
Ended December 31,
---------------------------------
(in thousands, except per share data) 1994 1993 1992
------- ------- -------
<S> <C> <C> <C>
INTEREST INCOME:
Interest and fees on loans:
Taxable .................................................... $49,754 $43,240 $45,004
Tax-exempt ................................................. 371 306 402
------- ------- -------
50,125 43,546 45,406
------- ------- -------
Interest and dividends on securities:
Taxable .................................................... 31,989 22,350 19,991
Tax-exempt ................................................. 1,313 1,092 907
------- ------- -------
33,302 23,442 20,898
------- ------- -------
Interest on Federal funds sold ................................ 476 771 1,342
------- ------- -------
TOTAL INTEREST INCOME ................................ 83,903 67,759 67,646
------- ------- -------
INTEREST EXPENSE:
Savings deposits .............................................. 15,449 11,928 12,350
Time deposits and certificates of deposits .................... 8,025 8,451 13,744
Interest on short-term and other borrowings ................... 2,408 362 539
------- ------- -------
TOTAL INTEREST EXPENSE ............................... 25,882 20,741 26,633
------- ------- -------
NET INTEREST INCOME .................................. 58,021 47,018 41,013
------- ------- -------
PROVISION FOR POSSIBLE LOAN LOSSES ................................ 3,000 3,600 4,116
------- ------- -------
NET INTEREST INCOME AFTER PROVISION FOR
POSSIBLE LOAN LOSSES ................................. 55,021 43,418 36,897
------- ------- -------
NON-INTEREST INCOME:
Trust department income ....................................... 630 525 591
Service charges on deposit accounts ........................... 7,528 5,981 4,832
Securities losses ............................................. (337) -- (26)
Other ......................................................... 2,169 2,100 2,260
------- ------- -------
9,990 8,606 7,657
------- ------- -------
65,011 52,024 44,554
------- ------- -------
OPERATING EXPENSES:
Salaries ...................................................... 13,843 11,910 10,475
Pension and other employee benefits (Note 11) ................. 6,048 4,591 3,229
Occupancy expense ............................................. 4,110 3,056 3,182
Equipment expense ............................................. 2,325 1,960 1,760
Net cost to operate other real estate ......................... 51 119 562
Deposit and other insurance ................................... 2,811 2,262 1,986
Outside services .............................................. 2,921 2,782 2,790
Amortization of intangible assets ............................. 1,259 -- 2,424
Charitable contributions ...................................... 72 33 4,032
Other ......................................................... 4,564 3,258 3,909
------- ------- -------
38,004 29,971 34,349
------- ------- -------
INCOME BEFORE PROVISION FOR INCOME TAXES 27,007 22,053 10,205
------- ------- -------
PROVISION FOR INCOME TAXES (NOTE 10):
Federal ....................................................... 8,397 6,976 207
State ......................................................... 1,679 875 357
------- ------- -------
10,076 7,851 564
------- ------- -------
NET INCOME ........................................... $16,931 $14,202 $ 9,641
======= ======= =======
INCOME PER COMMON SHARE:
Primary ....................................................... $ 1.69 $ 1.37 $ 1.06
Fully diluted ................................................. 1.64 1.37 1.06
WEIGHTED AVERAGE SHARES OUTSTANDING (NOTE 1):
Common ........................................................ 9,751 10,364 9,136
Preferred ..................................................... 602 -- --

</TABLE>

The accompanying notes to consolidated financial statements are an integral part
of these statements.

<PAGE>

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

HUBCO, INC. and Subsidiaries
For the Years Ended December 31, 1994, 1993 and 1992

Unrealized
Holding Gain
(Loss) On
Preferred Stock Common Stock Additional Restricted Securities
----------------- -------------------- Paid-in Retained Treasury Stock Available
(in thousands, except share data) Shares Amount Shares Amount Capital Earnings Stock Award for Sale
------- ------- ---------- ------- ------- -------- -------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1991 4,531,492 $12,086 $18,644 $10,815 -- ($ 446) $ --
Net income--1992 ............... -- $ -- -- -- -- 9,641 -- -- --
Cash dividends--$.27 per
share ........................ -- -- -- -- -- (2,414) -- -- --
Issuance of common stock,
net of related expenses ...... -- -- 1,725,000 4,600 15,115 -- -- -- --
Return of 770 shares of
restricted stock to
treasury stock ............... -- -- -- -- -- -- (6) 6 --
Issuance of restricted stock ... -- -- 29,850 80 318 -- -- (398) --
Amortization of restricted
stock ........................ -- -- -- -- -- -- -- 272 --
------- ------- ---------- ------- ------- -------- -------- ------- -------
Balance at December 31, 1992 ..... -- -- 6,286,342 16,766 34,077 18,042 (6) (566) --
Net income--1993 ............... -- -- -- -- -- 14,202 -- -- --
Cash dividends--$.31 per
share ........................ -- -- -- -- -- (3,267) -- -- --
10% stock dividend--
Note 12 ...................... -- -- 628,011 1,675 14,653 (16,328) -- -- --
Return of 1,122 shares of
restricted stock to
treasury stock ............... -- -- -- -- -- 1 (11) 10 --
Issuance of restricted stock ... -- -- 19,008 51 318 19 280 (668) --
Amortization of restricted
stock ........................ -- -- -- -- -- -- -- 278 --
Purchase of 221,000 shares
of treasury stock ............ -- -- -- -- -- -- (4,834) -- --
Unrealized holding gain
(loss) on securities
available for sale ........... -- -- -- -- -- -- -- -- 4,262
------- ------- ---------- ------- ------- -------- -------- ------- -------
Balance at December 31, 1993 ..... -- -- 6,933,361 18,492 49,048 12,669 (4,571) (946) 4,262
Net income--1994 ............... -- -- -- -- -- 16,931 -- -- --
Cash dividends--
$.36 per share, common ....... -- -- -- -- -- (3,512) -- -- --
Cash dividends-- $.54
per share, preferred ......... -- -- -- -- -- (447) -- -- --
Issuance of 797,811
shares preferred stock,
net of related expenses ...... 797,811 19,147 -- -- -- -- -- -- --
Retroactive adjustment for
the three-for-two common
stock split on
January 14, 1995 ............. -- -- 3,466,681 -- -- -- -- -- --
Return of 4,446 shares of
restricted stock to
treasury stock ............... -- -- -- -- -- 6 (43) 37 --
Issuance of restricted
stock ........................ -- -- -- -- -- -- 746 (746) --
Amortization of restricted
stock ........................ -- -- -- -- -- -- -- 389 --
Purchase of 9,000 shares of
treasury stock-preferred ..... -- -- -- -- -- -- (190) -- --
Purchase of 526,621 shares
of treasury stock-common ..... -- -- -- -- -- -- (7,665) -- --
Change in net unrealized
holding gain (loss)
on securities available
for sale ..................... -- -- -- -- -- -- -- -- (4,587)
------- ------- ---------- ------- ------- -------- -------- ------- -------
Balance at December 31, 1994 ..... 797,811 $19,147 10,400,042 $18,492 $49,048 $25,647 ($11,723) ($1,266) ($ 325)
======= ======= ========== ======= ======= ======= ======== ======= =======

</TABLE>

The accompanying notes to consolidated financial statements are an integral part
of these statements.

<PAGE>

CONSOLIDATED STATEMENTS OF CASH FLOWS

HUBCO, INC. and Subsidiaries
<TABLE>
<CAPTION>
For The Years
Ended December 31,
----------------------------------
(in thousands) 1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ...................................................... $ 16,931 $ 14,202 $ 9,641
Adjustments to reconcile net income to net cash
provided by operating activities--
Provision for possible loan losses ........................... 3,000 3,600 4,116
Provision for depreciation and amortization .................. 3,676 1,899 4,479
Amortization of securities premiums .......................... 2,056 1,300 1,074
Accretion of securities discount ............................. (647) (320) (295)
Securities losses ............................................ 337 -- 26
Noncash charitable contribution .............................. -- -- 4,000
Deferred income taxes ........................................... 2,032 (398) (4,035)
Increase in interest receivable ................................. (570) (57) (2,587)
(Decrease) increase in interest payable ......................... 1,594 (466) (3,646)
(Decrease) increase in accrued taxes and
other liabilities ............................................ (48,991) 1,544 (4,201)
(Increase) decrease in other assets ............................. (10,520) 6,998 (4,981)
-------- -------- --------

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES .... (31,102) 28,302 3,591
-------- -------- --------

CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of securities ............................... 68,669 61 8,570
Proceeds from maturities of securities .......................... 102,832 71,980 64,983
Purchases of securities ......................................... (200,564) (138,681) (232,340)
Net cash acquired through acquisitions .......................... 117,773 43,134 425,698
Net cash paid for acquisitions .................................. (26,660) (227) (3,411)
Net decrease in loans ........................................... 30,138 30,334 11,583
Purchases of premises and equipment ............................. (9,714) (3,853) (3,366)
(Increase) decrease in other real estate ........................ 550 (389) 431
-------- -------- --------

NET CASH PROVIDED BY INVESTING ACTIVITIES .............. 83,024 2,359 272,148
-------- -------- --------

CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in demand deposits,
NOW accounts and savings accounts ............................ (36,229) 22,108 (6,933)
Net decrease in certificates of deposit ......................... (46,113) (52,522) (265,477)
Net increase in Federal funds purchased and securities sold
under agreements to repurchase ............................... 10,724 5,496 2,093
Proceeds from the issuance of subordinated debt ................. 25,000 -- --
Net decrease in short-term borrowings ........................... -- -- (763)
Net proceeds from issuance of common stock ...................... -- -- 19,715
Cash dividends .................................................. (3,959) (3,267) (2,414)
Acquisition of treasury stock ................................... (7,855) (4,834) (6)
-------- -------- --------

NET CASH USED IN FINANCING ACTIVITIES .................. (58,432) (33,019) (253,785)
-------- -------- --------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ....... (6,510) (2,358) 21,954
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR ......... 59,342 61,700 39,746
-------- -------- --------
CASH AND CASH EQUIVALENTS AT END OF YEAR ............................ $ 52,832 $ 59,342 $ 61,700
======== ======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for
Interest ..................................................... $ 24,524 $ 21,017 $ 30,279
Income taxes ................................................. 7,501 8,477 3,823
======== ======== ========

</TABLE>

The accompanying notes to consolidated financial statements are an integral part
of these statements.

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

HUBCO, INC. and Subsidiaries

December 31, 1994

(dollars in thousands, except per share data)

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

HUBCO, Inc. (the Company) provides a full range of banking services to
individual and corporate customers through its subsidiary and branch locations
in New Jersey. The Company is subject to the regulations of certain Federal and
state agencies and undergoes periodic examinations by those regulatory
authorities.

Basis Of Presentation And Consolidation: The consolidated financial statements
include the accounts of HUBCO, Inc. and its subsidiaries, all of which are
wholly owned.

In preparing the consolidated financial statements, management is required to
make certain estimates and assumptions that affect the reported amounts of
assets and liabilities as of the date of the balance sheet and revenues and
expenses for the period. Actual results could differ significantly from those
estimates.

All significant intercompany accounts and transactions are eliminated in
consolidation.

Securities: The Company adopted Statement of Financial Accounting Standards No.
115, "Accounting for Certain Investments in Debt and Equity Securities" (SFAS
115), effective December 31, 1993. In accordance with the pronouncement, the
Company classified its securities as held for investment purposes (held to
maturity), available for sale and held for trading purposes.

Securities for which the Company has the ability and intent to hold until
maturity are classified as held to maturity. These securities are carried at
cost adjusted for amortization of premiums and accretion of discounts on a
straight-line basis which is not materially different from the interest method.
Management reviews its intent to hold securities to maturity as a result of
changes in circumstances including major business combinations. A sale or
transfer of held to maturity securities may be necessary to maintain the
Company's existing interest rate risk position or credit risk policy.

Securities which are held for indefinite periods of time which management
intends to use as part of its asset/liability strategy, or that may be sold in
response to changes in interest rates, changes in prepayment risk, increases in
capital requirements or other similar factors, are classified as available for
sale and are carried at fair value. Differences between an available for sale
security's amortized cost and fair value is charged/credited directly to
stockholders' equity, net of income taxes. The cost of securities sold is
determined on a specific identification basis.

The Company has no securities held for trading purposes at December 31, 1994 and
1993.

Loans: Loans are stated at their principal amounts outstanding. Interest income
on loans not made on a discounted basis is credited to income based on principal
amounts outstanding at applicable interest rates. Interest income on consumer
credit loans is recorded primarily using the simple interest method.

Recognition of interest on the accrual method is discontinued when, in the
opinion of management, collateral is insufficient to cover principal and
interest, or when other factors indicate that collection of such amounts is
doubtful. A nonaccrual loan is not returned to an accrual status until interest
is received on a current basis and other factors indicating collection ability
is no longer doubtful.

The net amount of all loan origination fees, direct loan origination costs and
loan commitment fees are deferred and recognized over the estimated life of the
related loans as an adjustment of yield.

Allowance For Possible Loan Losses: The allowance is maintained at a level
believed adequate by management to absorb potential losses in the loan
portfolio. Management's determination of the adequacy of the allowance is based
on an evaluation of the portfolio, past loan loss experience, current economic
conditions, volume, growth and composition of the loan portfolio and other
relevant factors. The allowance is increased by provisions charged to expense
and reduced by net charge-offs.

While management uses available information to recognize potential losses on
loans, future additions to the allowance may be necessary based on changes in
economic conditions, particularly in New Jersey. In addition, various regulatory
agencies, as an integral part of their examination process, periodically review
the Company's allowance for possible loan losses. Such agencies may require the
Company to recognize additions to the allowance based on their judgments of
information available to them at the time of their examination.

Premises And Equipment: Land, buildings and furniture, fixtures and equipment
are carried at cost. Depreciation on substantially all buildings and furniture,
fixtures and equipment is provided using the straight-line method based on
estimated useful lives. Maintenance and repairs are expensed as incurred and
additions and improvements are capitalized.

Other Real Estate: Other real estate includes loan collateral that has been
formally repossessed. These assets are transferred to ORE and recorded at the
lower of carrying value or fair value of the properties. Subsequent provisions
that result from ongoing periodic evaluations of these ORE properties are
charged to expense in the period in which they are identified. ORE is carried at
the lower of cost or fair value, less estimated costs to sell. Carrying costs,
such as maintenance and property taxes, are charged to expense as incurred.

<PAGE>

NOTES--(continued)

In December 1992, the Company contributed certain real estate previously
acquired through foreclosure to a charity. The carrying amount of the other real
estate contributed was $4,000.

Intangibles: Intangible assets resulting from acquisitions under the purchase
method of accounting consist of goodwill and core deposit intangibles. Goodwill
is being amortized on a straight-line basis over five years. Core deposit
intangibles are being amortized, on a straight-line basis, over the estimated
average remaining lives of such intangible assets (primarily one to five years).

Amortization expense of intangible assets was $1,259, $0 and $2,424 for 1994,
1993 and 1992, respectively.

Pension Plan: Costs for the Company's two pension plans are actuarially
determined by the frozen initial liability cost method and the accrued benefit
(unit credit) cost method. (see Note 11)

Federal Income Taxes: In 1992, the Company adopted Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes," which changes the
method of accounting for income taxes from the deferred method to the liability
method. Certain income and expense items are recorded differently for financial
reporting purposes than for Federal income tax purposes and provisions for
deferred taxes are made in recognition of these temporary differences.

The Company and its subsidiaries file a consolidated Federal income tax return.
Under tax sharing agreements, each subsidiary provides for and settles income
taxes with the Company as if they would have filed on a separate return basis.

Per Share Amounts: Primary income per common share is computed by dividing net
income, less dividends on the convertible preferred stock, by the weighted
average number of common shares outstanding during the year. Fully diluted
income per share is computed by dividing net income by the weighted average
number of common share plus the number of shares issuable on conversion of the
preferred stock. Shares issuable upon the exercise of options are not included
in the calculation of income per share since their effect is not material. All
per share amounts have been retroactively adjusted for the three-for-two common
stock split on January 14, 1995.

Cash Equivalents: Cash equivalents include amounts due from banks and Federal
funds sold.

Reclassifications: Certain reclassifications have been made to the 1993 and 1992
amounts in order to conform with the 1994 presentation.

(2) ACQUISITIONS:

On June 30, 1993, the Company, through Hudson United Bank, acquired deposits and
certain assets of Pilgrim State Bank from Ramapo Bank. On May 6, 1994, the
Company, through Hudson United Bank, acquired deposits and certain assets of
Polifly Federal Savings & Loan Association from the Resolution Trust
Corporation.

A summary of these transactions is as follows:

Pilgrim Polifly
June 30, May 6,
1993 1994
-------- --------
Cash paid at acquisition ................ $ 227 $ 6,180
Balances at acquisition date:
Cash and cash equivalents ............. 42,907 104,077
Loans ................................. 46,670 456
Total assets .......................... 123,113 98,353
Deposits .............................. 122,876 104,446
Total liabilities ..................... 123,340 104,533

On July 1, 1994, the Company acquired Washington Bancorp, Inc. (Washington) for
a combination of cash and convertible preferred stock with an aggregate
consideration of approximately $40.5 million. In the transaction, 51% of the
Washington shares were converted into preferred stock at .6708 per share and 49%
of the Washington shares were converted to cash at $16.10 per share. The Bank
assumed deposits of approximately $237.8 million, received $7.1 million in cash
and cash equivalents and acquired $91.4 million in securities and $168.5 million
in loans. The transaction was accounted for under the purchase method of
accounting. The excess of book value of net assets aquired over their fair value
was approximately $5.1 million, which is being amortized over a five-year
period.

On December 7, 1994, the Bank acquired Shoppers Charge Accounts Co. ("Shoppers")
for approximately $16.3 million in cash which approximated the fair value of the
assets acquired. The Bank recorded approximately $63.4 million in assets and
$46.9 million in liabilities.

A summary of unaudited pro forma combined financial information for the Company,
Washington and Shoppers as if the acquisitions occurred on January 1 of the
period presented is as follows:

1994 1993
------- -------
Total interest income ....................... $98,074 $90,917
Net interest income after provision for
possible loan losses ...................... 64,730 57,343
Income before income taxes .................. 25,016 22,827
Net income .................................. 15,610 16,265
Income per share:
Primary ................................... $ 1.48 $ 1.46
Fully diluted ............................. 1.48 1.46

Pending Acquisition: In November 1994, the Company and the Bank agreed to
acquire Jefferson National Bank (Jefferson). In the transaction, each share of
Jefferson's common stock will be converted into 2.844 shares of the Company's
common stock resulting in the issuance of approximately 610,000 new shares. As
part of the acquisition, Jefferson will be merged into the Bank. As of December
31, 1994, Jefferson reported total assets, deposits and stockholders' equity of
$91,647, $85,376 and $5,445, respectively. The transaction is subject to, among
other things, Jefferson stockholders' and various regulatory approvals. The
acquisition is expected to be accounted for using the pooling of interests
method of accounting and finalized prior to April 30, 1995.

<PAGE>

NOTES--(continued)

(3) CASH AND DUE FROM BANKS:

Banks are required to maintain an average reserve balance with the Federal
Reserve Bank. The average 1994 amount of this reserve for the Company's
subsidiary was approximately $17,851.

(4) SECURITIES:

The amortized cost and estimated market value of securities as of December 31
are summarized as follows:

1994
----------------------------------------------------
Gross Unrealized Estimated
Amortized ---------------------- Market
Cost Gains (Losses) Value
---------- --------- ---------- -----------
Available for Sale
U. S. Government ... $ 33,196 $ 11 ($ 374) $ 32,833
U. S. Government
agencies ........ 15,013 -- (360) 14,653
States and political
subdivisions .... 580 -- (2) 578
Other securities ... 1,000 -- -- 1,000
Equity securities .. 8,385 1,405 (123) 9,667
--------- --------- --------- ---------
$ 58,174 $ 1,416 ($ 859) $ 58,731
========= ========= ========= =========

Held to Maturity
U. S. Government ... $ 225,434 $ 4 ($ 6,407) $ 219,031
U. S. Government
agencies ........ 224,954 32 (13,286) 211,700
States and political
subdivisions .... 23,152 50 (358) 22,844
Other securities ... 4,958 20 (154) 4,824
--------- --------- --------- ---------
$ 478,498 $ 106 ($ 20,205) $ 458,399
========= ========= ========= =========

1993
----------------------------------------------------
Gross Unrealized Estimated
Amortized ---------------------- Market
Cost Gains (Losses) Value
--------- --------- ---------- ----------
Available for Sale
U. S. Government ... $ 104,728 $ 5,580 $ -- $ 110,308
U. S. Government
agencies ........ 10,482 502 (1) 10,983
States and political
subdivisions ..... 1,600 237 -- 1,837
Other securities ... 2,107 223 (5) 2,325
Equity securities .. 4,916 381 (195) 5,102
--------- --------- --------- ---------
$ 123,833 $ 6,923 ($ 201) $ 130,555
========= ========= ========= =========

Held to Maturity
U. S. Government ... $ 104,957 $ 2,648 ($ 125) $ 107,480
U. S. Government
agencies ........ 164,850 3,104 (651) 167,303
States and political
subdivisions .... 23,815 496 (4) 24,307
Other securities ... 2,508 94 -- 2,602
--------- --------- --------- ---------
$ 296,130 $ 6,342 ($ 780) $ 301,692

The amortized cost and estimated market value of debt securities at December 31,
1994, by contractual maturity, are shown below. Expected maturities will differ
from contractual maturities because borrowers may have the right to call or
prepay obligations with or without call or prepayment penalties.

Estimated
Amortized Market
Cost Value
--------- ----------
Available for Sale
Due in one year or less ................... $ 14,721 $ 14,692
Due after one year through five years ..... 35,068 34,372
-------- --------
49,789 49,064

Equity securities ......................... 8,385 9,667
-------- --------
$ 58,174 $ 58,731
======== ========
Held to Maturity
Due in one year or less ................... $ 45,998 $ 45,971
Due after one year through five years ..... 319,296 307,565
Due after five years through ten years .... 30,578 28,790
Due after ten years ....................... 20,110 18,173
-------- --------
415,982 400,499

Mortgage-backed securities ................ 62,516 57,900
-------- --------
$478,498 $458,399
======== ========

At December 31, 1994 the Company has reflected a gross unrealized holding loss
on available for sale securities of $543 as a reduction of stockholders' equity,
net of deferred tax benefit of $218. This amount includes a $557 unrealized gain
for securities included in the available for sale portfolio and a $1,100
unrealized holding loss of securities reclassified into the held to maturity
portfolio as described in the following paragraph.

In July, 1994, the Bank transferred securities with an amortized cost basis of
$117,393 and an estimated market value of $116,696 from available for sale to
held to maturity. The transfer resulted from the Bank's review of its interest
rate risk position in connection with the Washington business combination (see
Note 2). As of December 31, 1994, these securities are included in held to
maturity at the estimated fair value at the transfer date, and the unrealized
loss is being accreted over the remaining life of the securities.

In December 1994, the Bank transferred securities with an amortized cost basis
of $98,505 and an estimated market value of $97,482 from held to maturity to
available for sale. Securities with an amortized cost of $50,295 and an
estimated market value of $49,996 were immediately sold resulting in a realized
loss of $299. The purpose of the transfer and sale was to fund the purchase
price and repay assumed debt related to the Shoppers business combination (see
Note 2). As a result of the Shoppers business combination, the Bank transferred
securities with an amortized cost basis of $48,210 and an estimated fair value
of $47,486 from held to maturity to available for sale. The purpose of the
transfer was to maintain the Company's interest rate risk position and to adjust
for the credit risk associated with the purchase of credit card receivables.

Sales of available for sale securities are summarized as follows:

1994 1993 1992
------- ------ ------
Proceeds from sales .................. $68,669 $61 $8,570
Gross gains from sales ............... 15 4 31
Gross losses from sales .............. (352) (4) (57)

<PAGE>

NOTES--(continued)

Securities with a book value of $59,479 and $60,005 at December 31, 1994 and
1993, respectively, are pledged to secure public funds, repurchase agreements
and for other purposes as required or permitted by law.

(5) LOANS:

The Company's loan portfolio is diversified with no industry comprising greater
than 10 percent of the total outstanding. Real estate loans are primarily made
in the local lending area. The Company requires collateral on all real estate
loans and generally requires loan to value ratios of no greater than 67 percent
for commercial mortgages and 75 percent for residential mortgages.

(6) ALLOWANCE FOR POSSIBLE LOAN LOSSES:

The allowance for possible loan losses is based on estimates, and ultimate
losses may vary from the current estimates. These estimates are reviewed
periodically and, as adjustments become necessary, they are reflected in
operations in the periods in which they become known.

A summary of the activity in the allowance for possible loan losses is as
follows:

1994 1993 1992
------- ------ ------
Balance at January 1 .................. $10,811 $7,605 $6,698
Additions (deductions):
Provision charged to expense ...... 3,000 3,600 4,116
Allowance acquired through mergers
or acquisitions ................. 4,717 400 1,500
Recoveries on loans previously
charged off ..................... 805 386 832
Loans charged off ................. (6,105) (1,180) (5,541)
------- ------- ------
Balance at December 31 ............... $13,228 $10,811 $7,605
======= ======= ======

(7) NONPERFORMING LOANS:

The following table presents information related to loans which are on
nonaccrual, contractually past due ninety days or more as to interest or
principal payments and loans which have been restructured to provide a reduction
or deferral of interest or principal for reasons related to the debtors'
financial difficulties.

December 31
-------------------------
1994 1993
------- -------
Nonaccrual loans ........................... $ 9,917 $5,534
Renegotiated loans ......................... 539 2,177
------- ------
Total nonperforming loans ......... $10,456 $7,711
======= ======
90 days or more past due ................... $ 2,199 $1,443
======= ======

Gross interest income which
would have been recorded
under original terms .................. $ 681 $ 813
Gross interest income recorded
during the year ....................... 109 193
Commitments for additional funds ........... None None
======= ======

In May 1993 and October 1994, the Financial Accounting Standards Board issued
SFAS 114, "Accounting by Creditors for Impairment of a Loan" and "SFAS 118,"
"Accounting by Creditors for Impairment of a Loan--Income Recognition and
Disclosure." As defined in SFAS 114 and SFAS 118, a loan is impaired when, based
on current information and events, it is probable that a creditor will be unable
to collect all amounts due according to the contractual terms of the loan
agreement. SFAS 114 and SFAS 118 require that the measurement of impairment of a
loan be based on the present value of expected future cash flows, net of
estimated costs to sell discounted at the loan's effective interest rate.
Impairment can also be measured based on a loan's observable market price or the
fair value of collateral, if the loan is collateral dependent. If the measure of
the impaired loan is less than the recorded investment in the loan, the Bank
will be required to establish a valuation allowance, or adjust existing
valuation allowances, with a corresponding charge or credit to the provision for
possible loan losses.

The Company adopted SFAS 114 as of January 1, 1994. The effect of adopting this
new accounting standard was not material based on the net carrying value and
other real estate portfolios at the date of adoption.

At December 31, 1994 and 1993 impaired loans, comprised principally of
nonaccruing loans, totaled $7,341 and $4,763, respectively. The allowances for
possible loan losses related to such impaired loans was $1,355 and $620 at
December 31, 1994 and 1993, respectively.

(8) LOANS TO RELATED PARTIES:

In the ordinary course of business, the Company and its subsidiaries have
extended credit to various directors, officers and their associates. At December
31, 1994, and 1993, related party loans fully secured by real estate or
marketable securities were $1,697 and $1,635, respectively.

The aggregate extension of credit to related parties is summarized below:

December 31
----------------------
1994 1993
------ -------
Balance at January 1 ...................... $2,193 $ 3,212
New loans issued .......................... 1,564 403
Repayment of loans ........................ (697) (1,422)
------ -------
Balance at December 31 .................... $3,060 $ 2,193
====== =======

All related party loans were current as to principal and interest at December
31, 1994.

(9) PREMISES AND EQUIPMENT:

The following is a summary of premises and equipment:

December 31
----------------------
1994 1993
------- -------
Land ...................................... $ 8,304 $ 4,264
Premises .................................. 23,327 15,020
Furniture, fixtures and equipment ......... 11,071 6,745
------- -------
42,702 26,029
Less: Accumulated depreciation ............ 9,968 8,028
------- -------
$32,734 $18,001
======= =======

Depreciation and amortization expense for premises and equipment for 1994, 1993
and 1992 amounted to $2,028, $1,621 and $1,505, respectively.

<PAGE>

NOTES--(continued)

(10) INCOME TAXES:

The components of the provision for income taxes are as follows:

For the Years Ended
December 31
-----------------------------
1994 1993 1992
------- ------ -------
Federal:
Current ................................ $ 5,287 $7,374 $ 4,242
Deferred ............................... 3,110 (398) (4,035)
State ..................................... 1,679 875 357
------- ------ -------
Total provision for income taxes ....... $10,076 $7,851 $ 564
======= ====== =======

A reconciliation of the provision for income taxes, as reported, with the
Federal income tax at the statutory rate of 35 percent for 1994 and 1993, and 34
percent for 1992, is as follows:

For the Years Ended
December 31
------------------------------
1994 1993 1992
------- ------- --------
Tax at statutory rate $ 9,452 $7,719 $ 3,470
Increase (decrease) in taxes resulting from:
Tax-exempt income ...................... (603) (494) (394)
State taxes on income, net of
Federal income tax effect ............ (588) (306) (121)
Reversal of reserves no
longer deemed necessary .............. -- -- (1,475)
Noncash charitable contribution
basis for tax in excess of book ...... -- -- (680)
Other, net ............................ 136 57 (593)
------- ------- -------
Provision for Federal income taxes ....... $ 8,397 $6,976 $ 207
======= ====== =======

Deferred Federal income taxes result primarily from provisions for possible loan
losses which are not currently deductible, differences in book\tax depreciation
and a charitable contribution of other real estate.

Significant components of deferred tax assets and liabilities as of December 31,
1994 and 1993 were as follows:

1994 1993
------ -------
Deferred Tax Assets (Liabilities):
Available for sale securities .... $ 218 $(2,460)
Allowance for possible
loan losses .................... 1,967 2,505
Charitable contribution -- 1,500
Other ............................ (862) (85)
------ -------
$1,323 $ 1,460
====== =======

Included in the table above is $2,755 of deferred tax assets acquired from
Washington. In order to fully realize its deferred tax assets, the Company will
need to generate future taxable income during periods in which existing
deductible temporary differences reverse. Based upon the Company's historical
and current pretax earnings, management believes it is more likely than not that
the Company will generate future net taxable income in sufficient amounts to
realize its net deferred tax asset at December 31, 1994, however, there can be
no assurance that the Company will generate earnings or a specific level of
continuing earnings. The Company did not record any valuation allowances against
its deferred tax assets at December 31, 1994 and 1993.

(11) PENSION PLANS AND POSTRETIREMENT BENEFITS:

The Company has two noncontributory pension plans which cover eligible employees
(a base plan and a nonbargaining plan). The plans provide for payments to
qualified employees based on salary and years of service. The Company's funding
policy for these plans is to make the maximum annual contributions allowed by
the applicable regulations.

Net pension cost (income) includes the following:

1994 1993 1992
---- ----- ------
Service cost -- benefits earned
during the year ..................... $301 $169 $107
Interest cost on projected
benefit obligation .................. 567 492 456
Actual return on plan assets ........... (643) (607) (581)
Net amortization and deferral .......... 46 (8) (41)
---- ---- -----
Net periodic pension cost (income) ..... $271 $ 46 ($ 59)
==== ==== =====

Assumptions used in the accounting for the plans in 1994, 1993 and 1992 as of
December 31 were:

1994 1993 1992
----- ---- -----
Weighted average discount rates ............ 7.00% 7.00% 8.00%
Rate of increase in ompensation levels ..... 4.00% 4.00% 4.00%
Expected long-term rate of return
on assets ................................ 8.00% 8.00% 8.00%

The following table sets forth the funded status and amounts recognized in the
consolidated balance sheets at December 31 for the Company's plans:

December 31
1994 1993

Actuarial present value of benefit obligations:
Accumulated benefit obligation, including
vested benefits of $6,705 and $6,706 for
1994 and 1993, respectively ................... $ 6,834 $ 6,841
Projected benefit obligation for service
rendered to date .............................. (8,653) (7,263)
Plan assets at fair value .................... 8,279 8,178
------ ------
Projected benefit obligation less than
plan assets ................................... (374) 915
Unrecognized portion as of December 31,
of net asset existing at date of
adoption of FASB Statement No. 87 ............. (152) (186)
Prior service cost not yet recognized
in net periodic pension cost .................. 805 885
Unrecognized net asset at December 31 ........... 528 (890)
------ ------
Net pension asset recognized in the
consolidated balance sheet at
December 31 ..................................... $ 807 $ 724
====== ======

<PAGE>

NOTES--(continued)

The Company has two 401 (k) savings plans covering substantially all of its
employees. The Company matches either 50% or 25% of the first 6% of the
employees contributions, depending on which plan the employee is covered. The
Company's contributions under these Plans were approximately $153, $130 and $67
in 1994, 1993 and 1992, respectively.

In 1992, the Company adopted Statement of Financial Accounting Standards No.
106, "Employers' Accounting for Postretirement Benefits Other Than Pensions"
(SFAS 106) which establishes standards of financial accounting and reporting for
an employer that offers postretirement benefits other than pensions to its
employees. The Company increased the annual pension benefits for current and
future retirees and eliminated medical insurance coverage for retirees. There
was no significant impact on the consolidated results of operations or financial
position resulting from the implementation of SFAS 106.

(12) SUBORDINATED DEBT:

In January, 1994, the Company sold $25,000 aggregate principal amount of
subordinated debentures. The debentures, which mature in 2004, bear interest at
7.75% per annum payable semi-annually.

(13) PREFERRED STOCK:

The Series "A" preferred stock was issued to stockholders of Washington in
connection with the Company's acquisition of Washington (see Note 2). The Series
"A" preferred stock has a stated value of $24.00 per share and cash dividends
are payable at the annual rate per share of $1.44, payable in quarterly
installments. The outstanding shares of the preferred stock may be redeemed as a
whole by vote of the Company's Board of Directors at any time from the later of
(i) July 1, 1995, and (ii) the date on which the market price of the Company's
common stock is $16.00 or more for twenty consecutive business days. The holders
of any preferred stock, at any time prior to the date fixed for any redemption,
have the right to surrender certificates in conversion for 1.5 shares of the
Company's common stock. At December 31, 1994, the Company has 1,196,716 shares
of authorized common stock reserved for issuance in connection with the Series
"A" preferred stock.

(14) COMMON STOCK:

On October 13, 1994, HUBCO announced that its Board of Directors had approved a
3-for-2 stock split payable January 14, 1995 to record holders of HUBCO Common
Stock on January 3, 1995. As a result, all share data has been retroactively
restated.

In December, 1994 the Board of Directors adopted the 1995 Stock Option Plan
which provides for the issuance of up to 525,000 stock options to employees of
the Company. The option price cannot be less than the fair market value of the
common stock at the date of the grant and options are granted by the Company's
restricted stock committee. Under the terms of this plan, the Board of Directors
granted 450,000 shares at an exercise price of $19.25 a share or $12.83, after
the 3 for 2 stock split effective January, 1995. The 1995 Stock Option Plan is
subject to approval by the stockholders at the annual meeting in May, 1995.

On April 20, 1993, the Board of Directors approved a 10 percent stock dividend
payable on June 1, 1993, to holders of record at May 11, 1993.

During 1989, the Company adopted a restricted stock plan in which 150,000 shares
of the Company's common stock may be granted to officers and key employees.
During 1992, the Company amended the Plan to increase the maximum number of
shares of common stock which may be awarded to 495,000 shares, after giving
retroactive effect to the 10 percent stock dividend in April 1993. During 1994
and 1993, 54,450 and 54,780 shares of common stock were awarded which vest
between two to five years from the date of grant. The value of shares issued
that have not been earned ($1,266) and ($946) has been recorded as a reduction
of stockholders' equity for 1994 and 1993, respectively. Amortization of
restricted stock awards charged to expense amounted to $389, $278 and $272 in
1994, 1993 and 1992, respectively.

During 1993, the Company adopted a stock option plan in which 165,000 shares of
the Company's common stock may be granted to nonemployee directors. The options
are granted at an exercise price equal to the fair market value at the date of
grant and will vest and become exercisable three years after the date of grant.
The plan will terminate in 2003. During 1993, 4,125 options were granted. Each
nonemployee director with at least three years of service upon retirement will
receive a benefit equal to 10% of the director's retainer in effect at the date
of retirement for each year of service as a director (not to exceed ten years).
During 1993, the Company incurred an expense of $2 related to this arrangement.
During 1994, this plan was terminated.

On November 8, 1993, the Company's Board of Directors authorized management to
repurchase up to 10 percent of its outstanding common stock each year. The
program may be discontinued or suspended at any time, and there is no assurance
that the Company will purchase the full amount authorized. The acquired shares
are to be held in treasury to be used for stock option and other employee
benefit plans, preferred stock conversion or in connection with the issuance of
common stock in pending or future acquisitions. As of December 31, 1994, the
Company had purchased 858,121 shares of common stock at an aggregate cost of
$12.5 million.

(15) RESTRICTIONS ON BANK DIVIDENDS, LOANS OR ADVANCES:

Certain restrictions exist regarding the ability of the Bank to transfer funds
to the Company in the form of cash dividends, loans or advances. State banking
regulations allow for the payment of dividends in any amount provided that
capital stock will be unimpaired and there remains an additional amount of
paid-in capital of not less than 50 percent of the capital stock amount. As of
December 31, 1994, the entire undistributed earnings of the Bank, $33,031, was
included in consolidated retained earnings and was available for distribution to
the Company.

Under Federal Reserve regulations, the Bank is also limited as to the amount it
may loan to its affiliates, including the Company. All such loans are required
to be collateralized by specific obligations. During 1994, the Company obtained
a loan from the Bank for $4,000 in order to finance the purchase of its new
administrative facility. The loan has been collateralized by the property.

<PAGE>

NOTES--(continued)

(16) LEASES:

Total rental expense for all leases amounted to approximately $1,217, $924 and
$858 in 1994, 1993 and 1992, respectively. At December 31, 1994, the minimum
total rental commitments under all noncancellable leases on bank premises with
initial or remaining terms of more than one year were as follows:

1995 ............... $ 888
1996 ............... 887
1997 ............... 743
1998 ............... 564
1999 ............... 495
Thereafter ............... 1,317

It is expected that in the normal course of business, leases that expire will be
renewed or replaced by leases of other properties.

(17) COMMITMENTS AND CONTINGENT LIABILITIES:

In 1994, the Company entered into an interest rate exchange agreement for the
purpose of hedging the interest rate related to the subordinated debt. The
agreement is a contractual agreement between the Company and its counterparty to
exchange fixed and floating rate interest obligations without exchange of the
underlying notional amount of $25,000. Such agreement involves interest rate
risk. If interest rates increase, the benefit resulting from the agreement will
be diminished. The notional principal amount is used to express the volume of
the transaction involved in this agreement; however this amount does not
represent exposure to credit loss. The counterparty to the agreement is the
fixed rate payor on the agreement and the Company is the floating rate payor on
the agreement. The floating rate is reset every three months. The term of this
agreement is three years. Management does not anticipate any material loss as a
result of this transaction.

The Company and its subsidiaries, from time to time, may be defendants in legal
proceedings. In the opinion of management, based upon consultation with legal
counsel, the ultimate resolution of these legal proceedings will not have a
material effect on the consolidated financial statements. In the normal course
of business, the Company and its subsidiaries have various commitments and
contingent liabilities such as commitments to extend credit, letters of credit
and liability for assets held in trust which are not reflected in the
accompanying financial statements.

Loan commitment and standby letters of credit are made to customers in the
ordinary course of business. Both arrangements have credit risk essentially the
same as that involved in extending loans to customers and are subject to the
Company's normal credit policies. The Company's maximum exposure to credit loss
for loan commitments, primarily unused credit card lines of credit and standby
letters of credit outstanding at December 31, 1994 was $906,483 and $14,356,
respectively. Loan commitments and standby letters of credit were $77,297 and
$13,760, respectively, at December 31, 1993. Commitments under commercial
letters of credit used to facilitate customers trade transactions were $1,131
and $442 at December 31, 1994 and 1993, respectively.

(18) HUBCO, INC. (PARENT COMPANY ONLY) FINANCIAL INFORMATION:

BALANCE SHEETS

December 31
-----------------------
1994 1993
-------- ----------
<S> <C> <C>
Assets:
Cash ......................................................................... $ 3,543 $ 1,085
Securities:
Available for sale, at market value (amortized cost of $6,880
and $4,916 in 1994 and 1993, respectively) ............................... 8,162 5,102
Held to maturity, at cost (market value of $11,720 for 1994) ............... 11,904 --
Investment in:
Bank subsidiary ............................................................ 92,638 73,058
Nonbank subsidiary-- HUB Financial Services, Inc. .......................... 98 427
Accounts receivable .......................................................... 1,121 477
Premises and equipment, net .................................................. 8,066 1,284
Other assets ................................................................. 4,076 65
-------- --------
Total assets ............................................................. $129,608 $ 81,498
======== ========
Liabilities and Stockholders' Equity:
Payable for the purchase of treasury stock ................................... $ 378 $ 2,225
Notes payable-subsidiary ..................................................... 3,938 --
Accrued taxes and other liabilities .......................................... 1,272 319
-------- --------
Total liabilities ........................................................ 5,588 2,544
Subordinated debt .............................................................. 25,000 --
Stockholders' equity ..................................................... 99,020 78,954
-------- --------
Total liabilities and stockholders' equity ............................... $129,608 $ 81,498
======== ========
</TABLE>

<PAGE>

NOTES--(continued)

STATEMENTS OF INCOME

Year Ended December 31
------------------------------------
1994 1993 1992
-------- --------- ---------
<S> <C> <C> <C>
Income:
Cash dividends from bank subsidiary ........................................... $ 14,261 $ 11,381 $ 2,863
Cash dividends from nonbank subsidiary ........................................ -- -- 600
Interest ...................................................................... 1,155 124 307
Rental income ................................................................. 238 238 238
-------- -------- --------
15,654 11,743 4,008
Expenses:

General and administrative .................................................... 1,587 581 759
Interest ...................................................................... 1,914 -- 35
-------- -------- --------
3,501 581 794
-------- -------- --------
Income before income tax benefit
and equity in undistributed
net income of subsidiaries .................................................... 12,153 11,162 3,214
Income tax benefit ................................................................ (742) (73) (360)
-------- -------- --------
12,895 11,235 3,574
Equity in undistributed net income of:

Bank subsidiary ............................................................... 4,365 2,955 6,337
Nonbank subsidiary ............................................................ (329) 12 (270)
-------- -------- --------
Net income ............................................................ $ 16,931 $ 14,202 $ 9,641
======== ======== ========

STATEMENTS OF CASH FLOWS

Operating activities:

Net income ..................................................................... $ 16,931 $ 14,202 $ 9,641
Adjustments to reconcile net income to
net cash provided by operating activities:

Provision for depreciation ................................................. 295 81 83
Amortization of restricted stock ........................................... 389 278 272
Increase in investment in subsidiaries ..................................... (4,036) (2,966) (26,298)
Increase in accounts receivable ........................................... (644) (140) (146)
Decrease (increase) in other assets ........................................ (4,011) (65) 7
Increase in note payable ................................................... 3,938 -- --
Increase in payable for the purchase of treasury stock ..................... (1,847) 2,225 --
Increase in accrued taxes and other liabilities ............................ 953 (38) 288
-------- -------- --------
Net cash provided by (used in)
operating activities .............................................. 11,968 13,577 (16,153)
-------- -------- --------
Investing activities:

Purchase of securities ......................................................... (15,619) (4,373) (543)
Capital expenditures ........................................................... (7,077) -- (3)
-------- -------- --------
Net cash used in investing activities ............................................. (22,696) (4,373) (546)
-------- -------- --------
Financing activities:

Issuance of subordinated debt .................................................. 25,000 -- --
Decrease in amount due to Hudson United Bank ................................... -- (21) (19)
Decrease in note payable ....................................................... -- -- (763)
Issuance of common stock ....................................................... -- -- 19,715
Dividends paid ................................................................. (3,959) (3,267) (2,414)
Acquisition of treasury stock .................................................. (7,855) (4,834) (6)
-------- -------- --------
Net cash provided by (used in) financing activities ............................... 13,186 (8,122) 16,513
-------- -------- --------
Increase (decrease) in cash ............................................ 2,458 1,082 (186)
Cash at beginning of year .............................................. 1,085 3 189
-------- -------- --------
Cash at end of year .................................................... $ 3,543 $ 1,085 $ 3
======== ======== ========

</TABLE>

<PAGE>
NOTES--(continued)
(19) SUMMARY OF QUARTERLY RESULTS OF OPERATIONS (UNAUDITED):

The following quarterly financial information for the two years ended December
31, 1994 is unaudited. However, in the opinion of management, all adjustments,
which include only normal recurring adjustments necessary to present fairly the
results of operations for the periods are reflected. Results of operations for
the periods are not necessarily indicative of the results of the entire year or
any other interim period.

<TABLE>
<CAPTION>
Three Months Ended
------------------------------------------------------------------
March 31 June 30 Sept. 30 Dec. 31
-------- --------- --------- ----------
<S> <C> <C> <C> <C>
1994:
Net interest income ................................... $12,379 $12,996 $15,811 $16,835
Provision for possible loan losses .................... 450 450 1,050 1,050
Income before income taxes ............................ 6,132 6,174 7,338 7,341
Net income ............................................ 3,786 3,904 4,527 4,700
Net income per share--primary ......................... .39 .40 .43 .45
Net income per share--fully diluted ................... .39 .40 .41 .43

1993:
Net interest income ................................... $11,092 $11,356 $12,249 $12,321
Provision for possible loan losses .................... 750 750 1,050 1,050
Income before income taxes ............................ 5,079 5,348 5,517 6,109
Net income ............................................ 3,207 3,504 3,736 3,755
Net income per share .................................. .31 .34 .36 .37
</TABLE>

(20) ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS:

The Financial Accounting Standards Board issued Statement No. 107, "Disclosures
About Fair Value of Financial Instruments." Financial instruments encompassing
this standard's definition include cash, loan agreements, accounts receivable
and payable, debt securities, deposit liabilities, loan commitments, standby
letters of credit and financial guarantees, among others. The fair value of a
financial instrument is the amount at which the instrument could be exchanged in
a current transaction between willing parties, other than a forced or
liquidation sale.

Estimated fair values have been determined by the Company using the best
available data and estimation methodology suitable for each category of
financial instruments. For those loans and deposits with floating rates, it is
presumed that estimated fair values generally approximate their recorded book
balances. The estimation methodologies used, the estimated fair values and
recorded book balances of the financial instruments at December 31, 1994 and
1993 were as follows:

Cash and cash equivalents include cash and due from bank balances, Federal funds
sold and securities purchased under agreements to resell. For these instruments,
the recorded book balance approximates their fair value.

For securities in the Company's portfolio, fair value was determined by
reference to quoted market prices. In the few instances where quoted market
prices were not available, prices for similar securities were used. Additional
detail is contained in Note 4 to these consolidated financial statements.

<TABLE>
<CAPTION>
1994 1993
-------------------------------- -----------------------------------
Estimated Recorded Estimated Recorded
Fair Value Book Value Fair Value Book Value
------------- ------------ ----------- -------------
<S> <C> <C> <C> <C>
Cash and cash equivalents ...................... $52,832 $52,832 $59,342 $59,342
Securities ..................................... 517,130 537,229 432,247 426,685
</TABLE>

The Company aggregated loans into pools having similar characteristics when
comparing their terms, contractual rates, type of collateral, risk profile and
other pertinent loan characteristics. Since no active market exists for these
pools, fair values were estimated using the percent value of future cashflows
expected to be received. Loan rates currently offered by the Bank were used in
determining the appropriate discount rate.

<TABLE>
<CAPTION>
1994 1993
-------------------------------- -----------------------------------
Estimated Recorded Estimated Recorded
Fair Value Book Value Fair Value Book Value
------------- ------------ ----------- -------------
<S> <C> <C> <C> <C>
Loans, net ..................................... $734,026 $715,946 $539,000 $518,579
</TABLE>

The fair value of demand deposits, savings deposits and certain money market
accounts approximate their recorded book balances. The fair value of fixed
maturity certificates of deposit was estimated using the present value of
discounted cash flows based on rates currently offered for deposits of similar
remaining maturities.

<TABLE>
<CAPTION>
1994 1993
-------------------------------- -----------------------------------
Estimated Recorded Estimated Recorded
Fair Value Book Value Fair Value Book Value
------------- ------------ ----------- -------------
<S> <C> <C> <C> <C>
Deposits ..................................... $1,202,172 $1,199,733 $936,235 $935,688
</TABLE>

The fair value for accrued interest receivable and for the other borrowed funds
approximates their respective recorded book balance. Federal funds purchased and
securities sold under agreements to repurchase at December 31, 1994 and 1993,
generally have an original term to maturity of less than 30 days and therefore,
their carrying value is a reasonable estimate of fair value.

<PAGE>
NOTES--(continued)
<TABLE>
<CAPTION>
1994 1993
-------------------------------- -----------------------------------
Estimated Recorded Estimated Recorded
Fair Value Book Value Fair Value Book Value
------------- ------------ ----------- -------------
<S> <C> <C> <C> <C>
Accrued interest receivable .................. $13,393 $13,393 $10,259 $10,259
Federal funds purchased and securities
sold under agreements to repurchase ...... 30,353 30,353 19,629 19,269
</TABLE>

The fair value of the subordinated debt was determined by reference to quoted
market prices.

<TABLE>
<CAPTION>
1994 1993
-------------------------------- -----------------------------------
Estimated Recorded Estimated Recorded
Fair Value Book Value Fair Value Book Value
------------- ------------ ----------- -------------
<S> <C> <C> <C> <C>
Subordinated Debt .............................. $21,813 $25,000 $ -- $ --
</TABLE>

The Company's remaining assets and liabilities which are not considered
financial instruments have not been valued differently than has been customary
with historical cost accounting. There is no material difference between the
notional amount and estimated fair value of off-balance sheet items and are
primarily comprised of unfunded loan commitments which are generally priced at
market at the time of funding.

For certain homogeneous categories of loans, such as some residential mortgages,
fair value is estimated using the quoted market prices for securities backed by
similar loans, adjusted for differences in loan characteristics. The fair value
of other types of loans is estimated by discounting the future cash flows using
the current rates at which similar loans would be made to borrowers with similar
credit ratings and for the same remaining maturities.

The foregoing estimates may not reflect the actual amount that could be realized
if all or substantially all of the financial instruments were offered for sale.
This is due to the fact that no market exists for a sizable portion of loan and
off balance sheet instruments. Further, the estimates employed by management
were subjective in nature and were based upon their judgment as to certain
economic conditions. These estimates are also subject to uncertainties. Changes
in assumptions or economic conditions and/or market segments or products could
materially affect future estimates.

In addition, management is concerned that reasonable comparability between
financial institutions may not be likely due to the wide range of permitted
valuation techniques and numerous estimates which must be made given the absence
of active secondary markets for many of the financial instruments. This lack of
uniform valuation methodologies also introduces a greater degree of subjectivity
to these estimated fair values.

(21) SUBSEQUENT EVENT:

On February 14, 1995, the Company signed a definitive agreement with Urban
National Bank (Urban) under which Urban will merge into the Bank. Under the
terms of the agreement, Urban shareholders will receive 2.170 shares of the
Company's common stock in exchange for each of Urban's shares subject to
adjustment in certain circumstances. The transaction is subject to, among other
things, stockholder and various regulatory approvals. The acquisition will be
accounted for under the pooling of interests method of accounting and is
expected to be completed in the third quarter of 1995. Urban operates nine
banking offices in Bergen and Passaic counties.

As of December 31, 1994, Urban reported total assets and stockholders' equity of
$241.3 million and $11.8 million, respectively and net income of $1.5 million
for the year then ended.

Report of Independent Public Accountants

To the Stockholders and Board of Directors of HUBCO, Inc.:

We have audited the accompanying consolidated balance sheets of HUBCO, Inc. (a
New Jersey corporation) and subsidiaries as of December 31, 1994 and 1993, and
the related consolidated statements of income, changes in stockholders' equity
and cash flows for each of the three years in the period ended December 31,
1994. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of HUBCO, Inc. and subsidiaries as
of December 31, 1994 and 1993, and the results of their operations and their
cash flows for each of the three years in the period ended December 31, 1994 in
conformity with generally accepted accounting principles.

As discussed in Note 1 to the consolidated financial statements, in 1992 the
Company changed its method of accounting for income taxes and in 1993 its method
of accounting for investments in debt and equity securities.

Roseland, New Jersey
January 12, 1995 (except for Note 21 as
to which the date is February 14, 1995)

EXHIBIT 22

LIST OF SUBSIDIARIES

SUBSIDIARIES OF HUBCO, INC.:

Hudson United Bank, organized under the banking laws of the State of New Jersey.

HUB Financial Services, Inc., organized under the New Jersey Business
Corporation Act.

SUBSIDIARIES OF HUDSON UNITED BANK:

Hendrik Hudson Corp. of New Jersey, organized under the New Jersey Business
Corporation Act.

Lafayette Development Corp., organized under the New Jersey Business Corporation
Act.

ARTHUR ANDERSEN
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation of our
report included in this Form 10-K, into the Company's previously filed
Registration Statement No. 33-72330.

s/ ARTHUR ANDERSEN LLP
----------------------------
ARTHUR ANDERSEN LLP

Roseland, New Jersey
March 30, 1995

<ARTICLE> 9

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 52,832
<INT-BEARING-DEPOSITS> 990,078
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 58,731
<INVESTMENTS-CARRYING> 478,498
<INVESTMENTS-MARKET> 458,399
<LOANS> 733,360
<ALLOWANCE> 13,228
<TOTAL-ASSETS> 1,377,122
<DEPOSITS> 1,199,733
<SHORT-TERM> 30,353
<LIABILITIES-OTHER> 23,016
<LONG-TERM> 25,000
<COMMON> 18,492
0
19,147
<OTHER-SE> 61,571
<TOTAL-LIABILITIES-AND-EQUITY> 1,377,122
<INTEREST-LOAN> 50,125
<INTEREST-INVEST> 33,302
<INTEREST-OTHER> 9,990
<INTEREST-TOTAL> 83,903
<INTEREST-DEPOSIT> 23,474
<INTEREST-EXPENSE> 25,882
<INTEREST-INCOME-NET> 58,021
<LOAN-LOSSES> 3,000
<SECURITIES-GAINS> (337)
<EXPENSE-OTHER> 38,004
<INCOME-PRETAX> 27,007
<INCOME-PRE-EXTRAORDINARY> 27,007
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16,931
<EPS-PRIMARY> 1.69
<EPS-DILUTED> 1.64
<YIELD-ACTUAL> 5.09
<LOANS-NON> 9,917
<LOANS-PAST> 2,199
<LOANS-TROUBLED> 539
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 10,811
<CHARGE-OFFS> (6,105)
<RECOVERIES> 805
<ALLOWANCE-CLOSE> 13,228
<ALLOWANCE-DOMESTIC> 9,018
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 4,210

</TABLE>