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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) - June 29, 1999
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HUDSON UNITED BANCORP
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(Exact Name of Registrant as Specified in Charter)
NEW JERSEY
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(State or Other Jurisdiction of Incorporation)
1-10699 22-2405746
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(Commission File Number) (IRS Employer Identification No.)
1000 MacArthur Boulevard, Mahwah, New Jersey 07430
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(Address of Principal Executive Offices)
(201) 236-2600
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(Registrant's Telephone Number)
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<PAGE>
Item 5. Other Events
- ------- ------------
Hudson United Bancorp ("HUB") announced on June 29, 1999 the signing of
a definitive agreement to acquire JeffBanks, Inc. ("JEFF") under which HUB will
acquire JEFF in a stock for stock exchange which is intended to be a tax-free
exchange. A copy of the Press Release is attached as an Exhibit to this Form
8-K.
Under the terms of the JEFF Merger Agreement each share of JEFF common
stock will be exchanged for .95 shares of HUB common stock.
HUB also announced on June 29, 1999 the signing of a definitive
agreement to acquire Southern Jersey Bancorp of Delaware Inc. ("SJB") under
which HUB will acquire SJB in a stock for stock exchange which is intended to be
a tax-free exchange. A copy of the Press Release is attached as an Exhibit to
this Form 8-K.
Under the terms of the SJB Merger Agreement each share of SJB common
stock will be exchanged for 1.26 shares of HUB common stock.
On June 29, 1999, HUB held a conference call with banking industry
analysts and others to discuss the acquisitions. The relevant slides from the
presentation are attached as an Exhibit to this Form 8-K.
This Form 8-K contains forward-looking statement within the meaning of
the Private Securities Litigation Reform Act of 1995. The presentation contains
estimates of future operating results for 1999 and beyond for Hudson United
Bancorp, Inc., JeffBanks, Inc. and Southern Jersey Bancorp of Delaware, Inc. on
a stand-alone and pro-forma combined basis and estimates of financial condition,
merger-related expenses and cost savings on a combined basis. These statements
are not historical facts and include expressions about management's confidence
and strategies and management's expectations about new and existing programs,
products, relationships, opportunities, technology and market conditions. Such
forward-looking statements involve certain risks and uncertainties. Actual
results may differ materially from the results discussed in these
forward-looking statements. Factors that might cause such a difference include,
but are not limited to, movements in interest rates, the possibility of
disruption in credit markets, successful implementation and integration of
Hudson United Bancorp's acquisitions, successful implementation of Year 2000
technology changes, and the impact of legal and regulatory barriers and
structures. Hudson United Bancorp assumes no obligation for updating such
forward-looking statements at any time.
Item 7. Exhibits
- ------- --------
99.1 Press Release dated June 29, 1999 regarding acquisition of
JeffBanks, Inc.
99.2 Press Release dated June 29, 1999 regarding acquisition of
Southern Jersey Bancorp
99.3 Slides for Analyst Presentation of June 29, 1999.
<PAGE>
SIGNATURES
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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.
HUDSON UNITED BANCORP
Dated: June 29, 1999 By: D. LYNN VAN BORKULO-NUZZO
-----------------------------
D. Lynn Van Borkulo-Nuzzo,
Executive Vice President
<PAGE>
INDEX TO EXHIBIT
Exhibit No. Description
- ---------- -----------
99.1 Press Release dated June 29, 1999 regarding acquisition of
JeffBanks, Inc.
99.2 Press Release dated June 29, 1999 regarding acquisition of
Southern Jersey Bancorp
99.3 Slides for Analyst Presentation of June 29, 1999.
FOR IMMEDIATE RELEASE
For: Hudson United Bancorp.
Contact:
Kenneth T. Neilson, Chairman & CEO Chris Witkowski, Sr. Vice President
201-236-2631 Assistant to the President, 201-236-6144
HUDSON UNITED BANCORP SIGNS DEFINITIVE AGREEMENT
WITH JEFFBANKS, INC.
(June 29, 1999) - Hudson United Bancorp (NYSE: HU), today announced that it has
signed a definitive agreement to merge with JeffBanks, Inc. (NASDAQ: JEFF), a
$1.7 billion holding company with 32 branches located throughout the greater
Philadelphia area of Pennsylvania and South Jersey. This merger significantly
strengthens Hudson United's position in the Southern New Jersey market and
extends its franchise into a fourth state, Pennsylvania. Together with Southern
Jersey Bancorp, a $470 million asset institution, whose merger with Hudson
United Bancorp is also being announced today, the combined entity is the second
largest banking company headquartered in New Jersey with $9.5 billion in assets
and over 200 branch offices throughout New Jersey, Connecticut, New York and
Pennsylvania.
Kenneth T. Neilson, Chairman and CEO of Hudson United Bancorp and Betsy Z.
Cohen, Chairman and CEO of JeffBanks, Inc. announced their intent to create the
$3.3 billion Jefferson Bank Division of Hudson United Bank. This entity will
combine Jefferson Bank, the existing South Jersey branches and lending
businesses of Hudson United and Southern Jersey Bancorp.
Under the terms of the agreement between JeffBanks, Inc. and Hudson United,
which is intended to be a tax free exchange, JeffBanks, Inc. shareholders will
receive .95 shares of Hudson United Bancorp common stock for each share of
JeffBanks, Inc. common stock. The common stock of Hudson United Bancorp closed
at $34.94 per share equating to a price of $33.19 per share of JeffBanks, Inc.
common stock. The total transaction value is $371 million, which is 2.6 times
JeffBanks book value and 20 times JeffBanks 1999 IBES earnings estimates, with a
deposit premium of 19%. JeffBanks, Inc. has issued an option to Hudson United
Bancorp which would enable them to purchase 1,212,706 shares of JeffBanks, Inc.
common stock under certain defined circumstances.
Pending appropriate corporate, shareholder and regulatory approvals, the
agreement is expected to be completed by the fourth quarter of 1999 and to be
accounted for as a pooling of interests.
Operating through its subsidiaries, Jefferson Bank (Pennsylvania) and Jefferson
Bank of NJ, Philadelphia-based JeffBanks, Inc. operates 32 branches in
Burlington and Camden counties in New Jersey, and Chester, Delaware, Montgomery
and Philadelphia counties in Pennsylvania.
"We are delighted to join forces with JeffBanks, Inc. in a transaction that
represents our first foray into the state of Pennsylvania," said Neilson.
"JeffBanks' strong financial track record and leadership position within the
areas of small business lending and mortgage banking make this transaction a
strong strategic fit while providing Hudson United with an immediate presence in
one of the premiere banking markets in the country."
Betsy Z. Cohen, Chairman and CEO of JeffBanks, Inc. said "I view this as an
opportunity to reinforce the Delaware Valley presence of Jefferson Bank. This
new combined entity will bring larger institutional resources to this region.
Equally important, we will continue to be committed to high levels of customer
service, with local control of the credit decision process." Cohen will be
Chairman and CEO of the newly created Jefferson Bank Division of Hudson United
Bank. Ms. Cohen will be a member of the Board of Directors and will join the
Executive Committee of Hudson United Bancorp.
Jefferson Bank President and COO, Robert B. Goldstein said, "The key reason for
the decision to align Jefferson with Hudson United is the philosophical synergy
and intense focus on the delivery of the customer experience and building
long-lasting relationships. Jefferson Banks' outstanding team of commercial
lending and branch personnel will continue to deliver Jefferson's trademark
brand of highly personalized customer service to consumers and small and
mid-sized businesses in our expanded market." Goldstein will continue in his
current capacity for the newly created division and will also be a member of the
Board of Directors at Hudson United Bank.
Neilson ended, " The merger with the Jefferson franchise will allow us to
compete even more effectively in the greater Philadelphia market. This alliance
expands our marketplace to Philadelphia and its suburbs, as well as bringing
core competencies in several areas which we will export throughout our
franchise."
Hudson United Bancorp's banking subsidiary offers a full array of innovative
products and services to retail and commercial customers including: imaged
checking accounts, 24-hour telephone banking, loans by phone, alternative
investments, insurance products, trust services and a wide variety of commercial
loans and services including international services, cash management services,
asset based loans, SBA loans and much more.
FOR IMMEDIATE RELEASE
For: Hudson United Bancorp.
Contact:
Kenneth T. Neilson, Chairman & CEO Chris Witkowski, Sr. Vice President
201-236-2631 Assistant to the President, 201-236-6144
HUDSON UNITED BANCORP SIGNS DEFINITIVE
MERGER AGREEMENT WITH SOUTHERN JERSEY BANCORP
Mahwah, NJ (June 29, 1999) - Hudson United Bancorp (NYSE: HU), today announced a
merger with Southern Jersey Bancorp (NASDAQ: SOJB), a $470 million asset bank
holding company with 17 branches in Southern New Jersey. Also today, Hudson
United Bancorp and JeffBanks, Inc. signed a merger agreement. The combined
entity is the second largest banking company headquartered in New Jersey with
$9.5 billion in assets and over 200 branch offices in New Jersey, Connecticut,
New York and Pennsylvania.
Kenneth T. Neilson, Chairman and CEO of Hudson United Bancorp announced the
intent to create a $3.3 billion Jefferson Bank Division of Hudson United Bank
which will combine Southern Jersey Bancorp, Jefferson Bank and Hudson United's
existing South Jersey branches and lending businesses.
Under the terms of the agreement between Southern Jersey Bancorp of Delaware,
Inc. and Hudson United, which is intended to be a tax free exchange, Southern
Jersey Bancorp of Delaware shareholders will receive 1.26 shares of Hudson
United Bancorp common stock for each share of Southern Jersey Bancorp common
stock. The common stock of Hudson United Bancorp closed at $34.94 per share
equating to a price of $44.02 per share of Southern Jersey Bancorp common stock.
The total transaction value is $54 million, which is 1.6 times Southern Jersey
Bancorp's book value and 11 times 1999 estimated earnings adjusted for
synergies, with a deposit premium of 5.3%. Southern Jersey Bancorp has issued an
option to Hudson United Bancorp which would enable them to purchase 200,000
shares of common stock under certain defined circumstances.
Pending appropriate corporate, shareholder and regulatory approvals, the
agreement is expected to be completed by the fourth quarter of 1999 and to be
accounted for as a pooling of interests.
Serving the Cumberland, Gloucester and Salem counties of New Jersey with 17
branches, Southern Jersey Bancorp is the bank holding company for Farmers and
Merchants National Bank of Bridgeton.
Kenneth T. Neilson, Chairman and CEO of Hudson United Bancorp said, "The merger
with Southern Jersey Bancorp reinforces our already strong market share and
presence within the South Jersey marketplace. Moreover, Southern Jersey
Bancorp's strong deposit franchise and dominant market share provide us with an
opportunity to offer many new products and services to the Farmers and Merchants
growing customer base."
Clarence McCormick Sr, Chairman and CEO of Southern Jersey Bancorp said "
Farmers and Merchants Bank has always tried to serve our communities, customers
and shareholders and we believe that our affiliation with Hudson United provides
the community banking atmosphere and service that we have been known for, and we
look forward to becoming a part of the Hudson United Bank family."
Hudson United Bancorp's banking subsidiary offers a full array of innovative
products and services to retail and commercial customers including: imaged
checking accounts, 24-hour telephone banking, loans by phone, alternative
investments, insurance products, trust services and a wide variety of commercial
loans and services including international services, cash management services,
asset based loans, SBA loans and much more.
Hudson United Bancorp, Inc.
Merger Announcement With
JeffBanks, Inc.
and
Southern Jersey Bancorp of Delaware, Inc.
June 29, 1999
<PAGE>
Forward Looking Statements
- --------------------------
This document contains forward-looking statement within the meaning of the
Private Securities Litigation Reform Act of 1995. This presentation contains
estimates of future operating results for 1999 and beyond for Hudson United
Bancorp, Inc., JeffBanks, Inc. and Southern Jersey Bancorp of Delaware, Inc.
on a stand-alone and pro-forma combined basis and estimates of financial
condition, merger-related expenses and cost savings on a combined basis.
These statements are not historical facts and include expressions about
management's confidence and strategies and management's expectations about
new and existing programs, products, relationships, opportunities,
technology and market conditions. Such forward-looking statements involve
certain risks and uncertainties. Actual results may differ materially from
the results discussed in these forward-looking statements. Factors that
might cause such a difference include, but are not limited to, movements in
interest rates, the possibility of disruption in credit markets, successful
implementation and integration of Hudson United Bancorp's acquisitions,
successful implementation of Year 2000 technology changes, and the impact of
legal and regulatory barriers and structures. Hudson United Bancorp assumes
no obligation for updating such forward-looking statements at any time.
<PAGE>
1. Transaction Summary
2. Transaction Rationale
3. Transaction Economics
4. Summary
Appendix
<PAGE>
<TABLE>
<CAPTION>
Transaction Summary
- -------------------
Southern
JeffBanks Jersey Bancorp
--------- --------------
<S> <C> <C>
Fixed Exchange Ratio: 0.95 1.26
Price Per Share: $33.13 $44.00
Transaction Value: $374 million $54 million
Earnings Multiple (1999 IBES Estimate): 20x N/A
Earnings Multiple (1999 Est. adjusted for
Synergies) (1) 12x 11x
Earnings Accretion Year 2000: $0.02 $0.07
Price to Book Value: 2.6x 1.6x
Structure: Tax-Free Exchange Tax-Free Exchange
Accounting: Pooling Pooling
Expected Closing 4th Quarter 1999 4th Quarter 1999
Due Diligence/Y2K Review: Completed Substantially Completed
System Conversion: 4th Quarter 1999 4th Quarter 1999
</TABLE>
<PAGE>
Transaction Rationale
Strategic Reasons for the Combinations
--------------------------------------
|X| Complement strong market presence in Philadelphia and Southern NJ
|X| Obtain attractive, small business and consumer customer bases
|X| Capitalize on strong integration skills and familiarity with markets
|X| Achieve substantial cost savings and potential revenue synergies
|X| Accretive to earnings in first full year of operations on cost saves
alone
|X| Accretive to book value
<PAGE>
Strategic Reasons for the Combinations
--------------------------------------
JeffBanks
---------
Strong Small Business Lender in Philadelphia Markets
Mortgage Banking Specialists in FHV & VA Loans
Largest Entry Point in Eastern Pennsylvania
Southern Jersey Bancorp
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Strong Deposit Franchise in Southern NJ including #1 Market Share in
Cumberland County
Strong Deposit Market Share in Cumberland and Salem Counties
Opportunity to Sell Many New Products and Services
This combination
----------------
Enhance Hudson United's Commercial Banking Franchise
Significant Cost Savings Opportunities
Adds New Banking Customers
Accretive to Earnings
Low Risk Integration
<PAGE>
Attractive Deposit and Loan
Composition - March 31, 1999
- ----------------------------
<TABLE>
<CAPTION>
Southern
Jersey
Hudson United JeffBanks Bancorp Pro Forma
--------------------------------- -------------------------- ----------------- ------------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
Loans $ % $ $ $ %
Commercial 690 20 257 66 1,012 21
Commercial Real Estate 678 20 403 80 1,161 23
Consumer 548 16 337 62 947 19
Residential Mortgage 1,508 44 268 33 1,810 37
----- --- ----- ----- ----- ----
Total 3,324 100 1,265 241 4,930 100
Deposits
Non-interest Bearing 870 18 206 60 1,136 17
Money Market and Savings 2,041 41 441 160 2,642 40
Certificates 2,021 41 598 209 2,828 43
----- --- ----- --- ----- ---
Total 4,932 100 1,245 429 6,606 100
----- --- ----- --- ----- ----
</TABLE>
<PAGE>
Transaction Economics
Transaction Economics
- ---------------------
|X| Accretion based on conservative, achievable cost savings and
no revenue enhancement
----------------------
- Jeff Banks: 35% or $12.1 million after-tax
- Southern Jersey: 40% or $3.7 million after-tax
|X| Substantial Revenue Enhancement Opportunities
|X| Merger Related Charges of:
- Jeff Banks: $27.5 million pre-tax
- Southern Jersey: $30.0 million pre-tax
<PAGE>
Revenue Enhancement Opportunities
- ---------------------------------
|X| Strong Loan Generation to replace significant investment portfolio at
Hudson United
|X| Additional Products Available to New Customers
- Asset Based Lending
- Equipment Leasing
- International Services
- Trust Services
- Insurance Services
- Relationship Deposit Accounts
<PAGE>
Pro Forma Balance Sheet (in Millions)
- -------------------------------------
March 31, 1999 Proforma
HU(1) JEFF SOJB Combined
----- ---- ---- --------
Total Assets $7,556 $1,680 $465 $9,701
Securities 3,225 287 106 3,618
Loans 3,738 1,265 231 5,234
Total Deposits 5,330 1,245 429 7,004
Total Capital 454 133 31 618
Shares Outstanding 40.4 10.5 1.1 52.0
- --------------------------------------------
(1) HU's information reflects the effect of the Little Falls acquisition which
closed May 21, 1999 and the pending acquisition with Advest.
<PAGE>
Strong Balance Sheet Maintained
-------------------------------
HU JEFF SOJB Combined
-- ---- ---- --------
Common Equity/Total Assets 6.1% 7.9% 6.7% 6.4%
Leverage Capital Ratio 6.8 9.3 5.9 6.9
Loans/Earnings Assets 52.7 80.4 57.0 58.0
Deposits/Total Funding 76.8 81.4 100.0 78.8
<PAGE>
Pro Forma Income Statement (in Millions)
- ----------------------------------------
IBES 1999 Estimates Proforma
HU JEFF SOJB(1) Combined
-- ---- ------- --------
Net Income $100.5 $18.3 $1.0 $119.8
Projected:
Cost Saves - 12.1 3.7 15.8
Adj. Net Income 100.5 30.4 4.8 135.6
Shares - Diluted 40.0 10.7 1.5 52.2
Adjusted EPS 2.51 2.84 3.09 2.60
Adjusted ROAA 1.45% 1.83% 1.22% 1.51%
Adjusted ROAE 22.1 20.7 13.3 22.0
Efficiency Ratio 46 43 48 45
Net Int. Margin 4.25 4.17 2.95 4.19
Does not include one-time merger related charges.
- -------------------------------------------------
(1) Represents 1st Quarter 1999 annualized, no IBES estimates available.
<PAGE>
Conclusion
----------
|X| Enhance Hudson United's Banking Franchise
- Strong business lender
- Attractive deposit franchise
|X| Financially Attractive
- Accretive to earnings and book value
- Attractive pricing
|X| Low-Risk Transaction
- Conservative assumptions
- Proven integration track record
- History of value creation through acquisition
|X| Enhances Shareholder Value
<PAGE>
APPENDIX
Low-Risk Integration
History of Success (In Millions)
- --------------------------------
<TABLE>
<CAPTION>
Institution Date Price Paid Deposits Loans
- ----------- ---- ---------- -------- -----
<S> <C> <C> <C> <C>
Mountain Ridge State 10/90 Nominal $ 47 $ 12
Meadowlands National Bank 4/91 Nominal $ 60 $ 22
Center Savings & Loan 9/91 Nominal $ 90 $ 79
Irving Federal Savings & Loan 2/92 Nominal $ 160 $ 62
Broadway Bank & Trust 3/92 $ 3.4 $ 355 $ 25
Pilgrim State Bank 6/93 $ 6.2 $ 123 $ 47
Polifly Federal Savings & Loan Branches 5/94 $ 6.2 $ 105 $ .5
Washington Savings Bank 7/94 $ 40.5 $ 300 $ 169
Shoppers Charge Accounts Co.1 12/94 $ 16.3 N/A $ 60
Jefferson National Bank 4/95 $ 9.7 $ 99 $ 42
Urban National Bank 6/95 $ 38.2 $ 230 $ 92
Growth Financial Corp. 1/96 $ 25.6 $ 110 $ 102
Crossland Federal Savings Bank Branches 2/96 $ 3.0 $ 60 $ .2
Lafayette American Bank 7/96 $ 120.0 $ 647 $ 548
Hometown Bancorporation, Inc. 8/96 $ 31.0 $ 162 $ 99
UST Bank, CT 11/96 $ 13.0 $ 100 $ 73
Westport Bancorp, Inc. 12/96 $ 67.8 $ 259 $ 183
The Bank of Southington 1/98 $ 26.7 $ 122 $ 85
Security National Bank & Trust 2/98 $ 11.0 $ 77 $ 48
Poughkeepsie Financial 4/98 $ 136.0 $ 611 $ 648
MSB Bancorp 5/98 $ 115.0 $ 686 $ 375
First Union Branches 6/98 $ 32.0 $ 320 $ .4
Community Financial 8/98 $ 29.6 $ 137 $ 87
Dime Financial 8/98 $ 201.0 $ 817 $ 374
IBS Financial 8/98 $ 227.0 $ 560 $ 218
FNB Branch Purchase 3/99 $ 9.1 $ 151 $ -
Little Falls Bancorp, Inc. 5/99 $ 55.0 $ 234 $ 153
Advest Asset Purchase Pending $ 2.0 $ 150 $ 159
JeffBanks, Inc. Pending $ 374.0 $ 1,245 $1,265
Southern Jersey Bancorp Pending $ 54.0 $ 429 $ 231
</TABLE>
1 Non-Bank Acquisition
<PAGE>
JeffBanks, Inc.
- ---------------
32 Branch Locations - 5 in New Jersey and 27 in Pennsylvania
Counties of Operation:
- ----------------------
<TABLE>
<CAPTION>
Burlington(NJ) Camden(NJ) Chester(PA) Delaware(PA) Montgomery(PA) Phila(PA)
-------------- ---------- ----------- ------------ -------------- ---------
<S> <C> <C> <C> <C> <C> <C>
Median Household Income 55,408 44,886 68,603 50,047 58,379 30,272
5 Year Projected Growth 14% 7% 28% 14% 17% 6%
5 Year Projected Growth in
Per Capita Income 21 12 31 22 23 18
JEFF Market Share 1% 1% 4% 1% 2% 3%
JEFF Rank in County 14 16 11 15 16 5
HUB Rank in County 6 5 - - - -
Proforma Rank in County 6 5 11 15 16 5
</TABLE>
Data source: SNL Securities
<PAGE>
Southern Jersey Bancorp
-----------------------
17 Branch Locations - All in New Jersey
Counties of Operation:
- ----------------------
Cumberland(NJ) Gloucester(NJ) Salem(NJ)
-------------- -------------- ---------
Median Household Income 36,611 49,577 41,900
5 Year Projected Growth 7% 11% 9%
5 Year Projected Growth in
Per Capita Income 18 19 21
SOJB Market Share 24% 1% 10%
SOJB Rank in County 1 18 6
HUB Rank in County - 11 -
Proforma Rank in County 1 9 6
Data source: SNL Securities
