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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) March 5, 1996
HUBCO, INC.
(Exact name of registrant as specified in its charter)
New Jersey
(State or other jurisdiction of incorporation)
1-10699 22-2405746
(Commission File Number) (IRS Employer Identification No.)
1000 MacArthur Boulevard, Mahwah, New Jersey 07430
(Address of principal executive offices)
(201) 236-2630
(Registrant's telephone number, including area code)
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<PAGE>
Item 5. Other Events.
HUBCO, Inc. announced on March 5, 1996 its estimates of
the one-time merger related and restructuring charges that it
anticipates will result from its acquisition of Lafayette
American Bank and Trust Company. In HUBCO's February 6, 1996
press release to announce the signing of a definitive merger
agreement with Lafayette, HUBCO stated that it expected to take
one-time charges but did not specify the amount.
Since the announcement of the proposed merger, the
companies have reviewed their plans more fully and HUBCO now
anticipates that the transaction will result in an estimated one-
time charge for merger related costs and restructuring charges of
$8.5 million on an after tax basis.<F1>
In addition, HUBCO has reviewed with Lafayette various
cost saving possibilities and plans and HUBCO now estimates that
the acquisition will enable it to realize pre-tax cost savings of
$9.0 million, representing about 34% of Lafayette's non-interest
expenses.<F2> HUBCO anticipates that it will be able to
implement these cost savings by September, 1996 if, as currently
anticipated, the transaction closes at approximately the end of
the second quarter.
HUBCO also announced that it expects to purchase or
Lafayette will repurchase up to 1,000,000 shares of the
outstanding Lafayette stock prior to closing. HUBCO expects to
issue approximately 5,500,000 of its shares in the transaction,
excluding the Lafayette shares purchased by HUBCO or retired by
Lafayette prior to closing.<F3>
In seeking to analyze the effects of these cost savings
and merger related charges, HUBCO noted that the one-time merger
charges would result in a book value dilution to the combined
companies of 4.2% which would be recovered in less than four
months of combined operations.
HUBCO further noted that the cost savings, when
combined with Lafayette's budgeted earnings for 1996 and the pre-
merger analysts' consensus earnings estimate for HUBCO for 1996,
would result in earnings dilution of only approximately 1% in
1996 from the analysts' consensus estimate of HUBCO's 1996
earnings of $2.00 per share. This estimate of core earnings
dilution excludes the effect of the one-time merger charges and
includes the effect of the Lafayette share repurchases.
Similarly, using the budgeted earnings estimates of Lafayette,
the anticipated cost savings and the consensus analysts' estimate
of HUBCO's earnings for 1997, HUBCO estimates that the
transaction will result in accretion of 6% over the analysts'
consensus estimates of $2.18 a share for HUBCO's earnings for
1997. The core earnings estimates for 1996 or 1997 do not assume
any financial benefits which HUBCO may be able to realize by the
delivery of HUBCO's broader product line in the new Connecticut
market area. While HUBCO anticipates some positive effect from
this revenue enhancement aspect of the transaction, it is unable
to specify such benefits with sufficient assurance to take them
into account in the estimates.
As with any earnings estimates, there are various
factors both within and beyond the Company's control that could
influence HUBCO's actual earnings results for 1996 and 1997,
including but not limited to economic factors, Lafayette's
ability to meet its budgeted earnings, other acquisitions by
HUBCO, unanticipated costs or expenses, and other factors.
Consequently, the actual results could differ materially.<F4>
____________________
<F1> The statements concerning one-time charges and Table One
below setting out the components of the charges are forward
looking statements under the Private Securities Litigation
Reform Act of 1995. The correctness of the estimate depends
upon a number of factors and the amount of the actual charge
incurred may vary from the estimate. While HUBCO has
developed this anticipated charge after considering what it
believes to be all relevant factors and including all
currently known amounts, the actual amount of the
restructuring charge may vary, depending upon a number of
factors, including but not limited to the timing of the
closing, HUBCO's ability to retain and work with the
officers of Lafayette who have employment or severance
contracts, as well as those who do not, economic conditions,
the resolution of various contractual contingencies with
third parties and other factors.
<F2> The statements concerning cost savings and Table Two below
setting out the components of the savings are forward
looking statements under the Private Securities Litigation
Reform Act of 1995. The correctness of the estimate depends
upon a number of factors including but not limited to the
ability to effectively centralize loan, credit, finance and
data processing functions without substantial cost
increases, the ability to terminate certain leases, the
reduction of certain FDIC assessment costs, economic
conditions and other factors. The amount of the cost
savings may vary from the estimates.
<F3> The statement about purchases and repurchases of Lafayette
shares is a forward looking statement under the Private
Securities Litigation Reform Act of 1995. The ability of
HUBCO and Lafayette to purchase Lafayette shares prior to
closing depends upon a number of factors, including but not
limited to the availability and price of the shares, the
tax-free nature of the merger, the pooling of interests
accounting treatment of the transaction, HUBCO's repurchases
of its own shares and the extent and timing of regulatory
approval and other factors. HUBCO and Lafayette may not be
able to purchase the anticipated number of Lafayette shares.
<F4> The estimates of book value dilution, recovery of such
dilution and estimated earnings for HUBCO and Lafayette for
1996 and 1997, as well as Tables Three and Four below, which
provide the basis for the calculations, are forward looking
statements under the Private Securities Reform Act of 1995.
The ability of HUBCO to realize the core earnings implied in
these statements is subject to a number of factors,
including but not limited to those set forth in the text.
As a result, the actual results of HUBCO could differ
materially from the estimates set forth in the text and
implied by the 1% dilution and 6% accretion.
<PAGE>
Set forth below are charts with respect to the
anticipated one-time charges, the cost savings and earning
estimates.
TABLE ONE
ONE-TIME MERGER RELATED AND
RESTRUCTURING CHARGES
(In Millions)
Acquisition Restructuring
Costs Costs
----------- -------------
Investment banker fees $2.9
Legal and accounting fees .5
Facilities lease terminations $1.9
Data processing 1.5
Severance payments 1.2
Stay bonuses 1.3
Employment Agreements 2.6
Pre-Tax Total $3.4 $8.5
After-Tax Total $3.4 $5.1
<PAGE>
TABLE TWO
ESTIMATED COST SAVINGS OF
HUBCO/LAFAYETTE MERGER
(In Millions)
Anticipated
Amount Realization Date
------ ----------------
Centralization of:
- Loan & deposit operations $1.6
- Credit functions .6
- Finance .6
- Data processing 2.1
- Other support staff .6
----
$5.5 (9/96)
Lease terminations $1.4 (7/96)
Directors fees, audit fees, legal
fees, marketing and consulting
expense 1.3 (7/96)
Other, including FDIC insurance .8 (7/96)
----
Total Cost Savings (Pre-Tax) $9.0
<TABLE>
TABLE THREE
ANALYSTS CONSENSUS EARNINGS
FORECAST FOR HUBCO
AND LAFAYETTE BUDGET FORECAST
(In Millions, Except Per Share Amounts)
1Q96 2Q96 3Q96 4Q96 1996 1997
---- ---- ---- ---- ---- ----
<C> <S> <S> <S> <S> <S> <S>
Analysts consensus
earnings forecasts
for HUBCO $ 6.4 $ 6.5 $ 6.9 $ 7.4 $27.2 $31.2
Per Share $ .47 $ .48 $ .51 $ .54 $ 2.00 $ 2.18
Lafayette* $ 1.6 $ 1.9 $ 2.1 $ 2.2 $ 7.8 $ 8.6
Per Lafayette Share $ .16 $ .19 $ .21 $ .24 $ .80 N/A
Per HUBCO Share $ .27 $ .32 $ .36 $ .41 $ 1.36 N/A
* Based upon Lafayette's Internal Budget. Per HUBCO Share
amount reflects the Lafayette per share amount multiplied by the
Exchange Ratio of .5880 per share of HUBCO Common Stock for each
share of Lafayette common stock.
</TABLE>
TABLE FOUR
CORE EARNINGS FORECASTS
(In Millions Except Per Share Amounts)
1996 1997
---- ----
$mm EPS $mm EPS
--- --- --- ---
HUBCO-Analysts
Consensus $27.2 $2.00* $29.6 $2.18*
Lafayette-Budget
Projections 7.8 8.6
Expense Efficiencies
Estimates (after tax)* 2.4 5.1
----- ----
Total $37.4 $1.98** $43.6 $2.31**
----- -----
* Analysts' Consensus
Projections -1% +6%
** Includes impact of Lafayette share repurchases and excludes
impact of one-time merger related charges.
Item 7. Exhibits.
99 Press Release dated March 5, 1996.
<PAGE>
SIGNATURES
Pursuant to the requirements 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.
Dated: March 6, 1996 By: RICHARD I. LINHART
-------------------------
Richard I. Linhart,
Executive Vice President
and Chief Financial
Officer
<PAGE>
INDEX TO EXHIBITS
99 Press Release dated March 5, 1996.
EXHIBIT 99
FOR IMMEDIATE RELEASE
March 5, 1996
HUBCO PRESS RELEASE
Mahwah, New Jersey, March 5, 1996 -- HUBCO, Inc.
(NASDAQ:HUBC) announced today its estimates of the one-time
merger related and restructuring charges that it anticipates will
result from its acquisition of Lafayette American Bank and Trust
Company. In HUBCO's February 6, 1996 press release to announce
the signing of a definitive merger agreement with Lafayette,
HUBCO stated that it expected to take one time charges but did
not specify the amount.
Since the announcement of the proposed merger, the
companies have reviewed their plans more fully and HUBCO now
anticipates that the transaction will result in an estimated one-
time charge for merger related costs and restructuring charges of
$8.5 million on and after tax basis.*
In addition, HUBCO has reviewed with Lafayette various
cost saving possibilities and plans and HUBCO now estimates that
the acquisition will enable it to realize pre-tax cost savings of
$9.0 million, representing about 34% of Lafayette's non-interest
expenses.** HUBCO anticipates that it will be able to implement
these cost savings by September, 1996 if, as currently
anticipated, the transaction closes at approximately the end of
the second quarter.
HUBCO also announced that it expects to purchase or
Lafayette will repurchase up to 1,000,000 shares of the
outstanding Lafayette stock prior to closing. HUBCO expects to
issue approximately 5,500,000 of its shares in the transaction,
excluding the Lafayette shares purchased by HUBCO or retired by
Lafayette prior to closing.***
In seeking to analyze the effects of these cost savings
and merger related charges, HUBCO noted that the one-time merger
charges would result in a book value dilution to the combined
companies of 4.2% which would be recovered in less than four
months of combined operations.
HUBCO further noted that the cost savings, when
combined with Lafayette's budgeted earnings for 1996 and the pre-
merger analysts' consensus earnings estimate for HUBCO for 1996,
would result in earnings dilution of only approximately 1% in
1996 from the analysts' consensus estimate of HUBCO's 1996
earnings of $2.00 per share. This estimate of core earnings
dilution excludes the effect of the one-time merger charges and
includes the effect of the Lafayette share repurchases.
Similarly, using the budgeted earnings estimates of Lafayette,
the anticipated cost savings and the consensus analysts' estimate
of HUBCO's earnings for 1997, HUBCO estimates that the
transaction will result in accretion of 6% over the analysts'
consensus estimates of $2.18 a share for HUBCO's earnings for
1997. The core earnings estimates for 1996 or 1997 do not assume
any financial benefits which HUBCO may be able to realize by the
delivery of HUBCO's broader product line in the new Connecticut
market area. While HUBCO anticipates some positive effect from
this revenue enhancement aspect of the transaction, it is unable
to specify such benefits with sufficient assurance to take them
into account in the estimates.
As with any earnings estimates, there are various
factors both within and beyond the Company's control that could
influence HUBCO's actual earnings results for 1996 and 1997,
including but not limited to economic factors, Lafayette's
ability to meet its budgeted earnings, other acquisitions by
HUBCO, unanticipated costs or expenses, and other factors.
Consequently, the actual results could differ materially.****
HUBCO stated that it will shortly file a Form 8-K with
the SEC providing additional breakdowns with respect to the
information in this press release.
____________________
* This is a forward looking statement under the Private
Securities Litigation Reform Act of 1995. The correctness of the
estimate depends upon a number of factors and the amount of the
actual charge incurred may vary from the estimate. While HUBCO
has developed this anticipated charge after considering what it
believes to be all relevant factors and including all currently
known amounts, the actual amount of the restructuring charge may
vary, depending upon a number of factors, including but not
limited to the timing of the closing, HUBCO's ability to retain
and work with the officer's of Lafayette who have employment or
severance contracts, as well as those who do not, economic
conditions, the resolution of various contractual contingencies
with third parties and other factors.
** This is a forward looking statement under the Private
Securities Litigation Reform Act of 1995. The correctness of the
estimate depends upon a number of factors including but not
limited to the ability to effectively centralize loan, credit,
finance and data processing functions without substantial cost
increases, the ability to terminate certain leases, the reduction
of certain FDIC assessment costs, economic conditions and other
factors. The amount of the cost savings may vary from the
estimates.
*** The statement about repurchases of Lafayette shares is
a forward looking statement under the Private Securities
Litigation Reform Act of 1995. The ability of HUBCO and
Lafayette to purchase Lafayette shares prior to closing depends
upon a number of factors, including but not limited to the
availability and price of the shares, the tax-free nature of the
merger, the pooling of interests accounting treatment of the
transaction, HUBCO's repurchases of its own shares and the extent
and timing of regulatory approval and other factors. HUBCO and
Lafayette may not be able to purchase the anticipated number of
Lafayette shares.
**** The estimates of book value dilution, recovery of such
dilution and estimated earnings for HUBCO and Lafayette are
forward looking statements under the Private Securities Reform
Act of 1995. The ability of HUBCO to realize the core earnings
implied in these statements is subject to a number of factors,
including but not limited to those set forth in the text. As a
result, the actual results could differ materially from the
estimates set forth in the text and implied by the 1% dilution
and 6% accretion.
