Southern Jersey Bancorp of Delaware, Inc.
WE ARE SOLICITING NEW PROXIES FOR YOUR VOTE ON THE SOUTHERN JERSEY -
HUDSON UNITED MERGER - YOUR VOTE IS VERY IMPORTANT
On August 13, 1999, we mailed you a meeting notice and proxy
statement-prospectus for a special meeting of shareholders to vote on the merger
of Southern Jersey Bancorp of Delaware, Inc. into Hudson United Bancorp. The
meeting was scheduled for September 16, 1999. As explained below, our meeting
was adjourned. We will reconvene the meeting at:
10:00 a.m., November 15, 1999
164 West Broad Street
Bridgeton, New Jersey 08302
On September 15, 1999, Hudson United announced that it has entered into
a merger agreement with Dime Bancorp, Inc. The transaction is structured as a
"merger of equals." Dime is to be the surviving corporation with the new name
"Dime United Bancorp, Inc." Each share of Hudson United common stock is to
become one share of Dime United common stock and each share of Dime common stock
is to become 0.585 shares of Dime United common stock.
Our merger agreement with Hudson United calls for Southern Jersey
shareholders to receive 1.26 shares of Hudson United common stock for each share
of Southern Jersey common stock. If our merger with Hudson United is completed,
each Hudson United share you receive in that merger will become one share of
Dime United common stock if the Hudson United - Dime merger is also completed.
Thus, if both mergers are completed, you will then own 1.26 shares of Dime
United for each share of Southern Jersey common stock you now own.
We adjourned the September 16 meeting so that we could prepare and send
you additional information on this new development, and give you an opportunity
to consider it before voting on our merger with Hudson United. We encourage you
to read the supplemented proxy statement-prospectus carefully before voting.
Because of the importance of the information contained in the
supplement, we have decided to solicit new proxies for the meeting. Thus, even
if you previously voted by proxy and do not wish to change your vote, you must
send in a new proxy card for your vote to be counted.
Hudson United common stock is listed on the New York Stock Exchange
under the symbol "HU." Based on October 12, 1999 closing prices, 1.26 shares of
Hudson United common stock had a value of $36.54. Dime is listed on the NYSE
under the symbol "DME." It is expected that Dime United stock will also be
NYSE-listed.
Both the Southern Jersey - Hudson United merger and the Hudson United -
Dime merger are structured so that shareholders will not be taxed on the
exchange of their stock.
On October 8, 1999, the Southern Jersey Board of Directors reconfirmed
its unanimous recommendation that you vote "FOR" approval of the Southern Jersey
- - Hudson United merger. Our financial advisor has also updated and reconfirmed
its opinion that the consideration in the Southern Jersey - Hudson United merger
is fair, from a financial point of view, to Southern Jersey shareholders.
Your vote is very important. Please take the time to complete, execute
and return the new green proxy card in the envelope provided. Unless you vote in
person at the reconvened meeting, a failure to return the green proxy card will
have the same effect as a vote against the Southern Jersey - Hudson United
merger.
Clarence D. McCormick
Chairman and Chief Executive Officer
Southern Jersey Bancorp of Delaware, Inc.
<PAGE>
Neither the Securities and Exchange Commission, nor any bank regulatory agency,
nor any state securities commission has approved or disapproved of these
securities or determined if the prospectus or this supplement is truthful or
complete. Any representation to the contrary is a criminal offense.
This is a supplement dated October 13, 1999 to the attached proxy
statement-prospectus dated August 13, 1999. This supplement
and the accompanying green proxy card are first being mailed
to Southern Jersey shareholders on October 15, 1999.
<PAGE>
Southern Jersey Bancorp of Delaware, Inc.
53 South Laurel Street
Bridgeton, New Jersey 08302
Notice of Reconvening of Special Meeting of Shareholders
Adjourned on September 16, 1999
and being reconvened on November 15, 1999
To the Shareholders of Southern Jersey Bancorp of Delaware, Inc.:
Notice is hereby given that the special meeting of shareholders of
Southern Jersey Bancorp of Delaware, Inc. which was adjourned on September 16,
1999 will be reconvened at 164 West Broad Street, Bridgeton, New Jersey 08302 at
10:00 a.m. on November 15, 1999. The following are the purposes for the special
meeting:
(1) To consider and vote upon an Agreement and Plan of
Merger dated as of June 28, 1999, among Hudson United
Bancorp, Hudson United Bank, Southern Jersey Bancorp
of Delaware, Inc. and the Farmers and Merchants
National Bank of Bridgeton, pursuant to which
Southern Jersey will merge into Hudson United
Bancorp.
(2) To transact other business that may properly come
before the special meeting or any adjournment or
postponement of the special meeting.
The record date for the special meeting has not been changed. Only
shareholders of record at the close of business on July 31, 1999 are entitled to
receive notice of and to vote at the special meeting or any adjournments or
postponements of the special meeting.
The Southern Jersey Board of Directors unanimously recommends that
shareholders vote "FOR" approval of the merger.
By Order of the Board of Directors,
Clarence D. McCormick
Chairman and Chief Executive Officer
<PAGE>
This document is a supplement to the proxy statement-prospectus that
was mailed to you on August 13, 1999. It should be read in conjunction with the
proxy statement-prospectus, which is attached. Information in this supplement
that differs from or adds to what was in the August 13, 1999 proxy
statement-prospectus should be considered an amendment to the original document.
QUESTIONS AND ANSWERS
Q: Why did you adjourn the Southern Jersey special meeting?
A: On September 15, 1999 Hudson United announced an agreement to merge
with Dime Bancorp, Inc. We adjourned the meeting so that we could
prepare and send you the information contained in this supplement, and
give you an opportunity to consider the additional information, as well
as information which is incorporated by reference into this supplement
and the proxy statement-prospectus, before you vote on the Southern
Jersey - Hudson United merger.
Q: How is the Hudson United - Dime merger structured, and how will the
combined company be managed?
A: The transaction is structured as a "merger of equals." Hudson United
will merge into Dime, with Dime as the surviving corporation. The new
name of the merged entity will be Dime United Bancorp, Inc. The Board
of Directors of Dime United initially is to be composed of 13 former
Dime directors and 12 former Hudson directors. Lawrence J. Toal,
currently the Chairman and CEO of Dime, is to serve in the same
capacity for Dime United until his retirement on December 31, 2002.
Kenneth T. Neilson, currently the Chairman and CEO of Hudson United, is
to serve as President and COO of Dime United until December 31, 2002,
and then he is to become Dime United's Chairman and CEO.
Q: What is the exchange ratio in the proposed Hudson United - Dime merger?
A: Upon completion of the merger, each share of Hudson United common stock
will automatically become one share of common stock in Dime United.
Each share of Dime common stock will become 0.585 shares of Dime United
common stock in the merger. The Dime United common stock is expected to
be listed on the NYSE.
On September 14, 1999, the day before announcement of the Hudson United
- Dime agreement, the closing price of Hudson United common stock on
the NYSE was $30-1/8 and the closing price of Dime common stock on the
NYSE was $17-3/4. On October 12, 1999, the closing price of Hudson
United common stock was $29.00 and the closing price of Dime common
stock was $16.50.
Q: Will the Hudson United - Dime merger be tax-free to Hudson United
shareholders?
A: Yes. The merger is structured so that Hudson United shareholders will
not generally recognize federal income tax gain or loss upon receiving
Dime United common stock in the merger.
Q: Can you provide some basic information about Dime Bancorp?
A: Dime Bancorp, Inc. is a savings and loan holding company incorporated
in Delaware, and headquartered in New York City. Dime is the holding
company for The Dime Savings Bank of New York, FSB, a
federally-chartered savings bank. The principal subsidiary of Dime
Savings Bank is North American Mortgage Company, a mortgage banking
company that was acquired by Dime in October 1997. At June 30, 1999,
Dime operated 100 banking branches located throughout the greater New
York City metropolitan area. Directly and through North American
Mortgage Company, Dime also provides consumer financial services and
mortgage banking services throughout the United States. At June 30,
1999, Dime had assets of $21.4 billion, deposits of $13.4 billion and
stockholders' equity of $1.5 billion. Dime is currently in the process
of acquiring 28 branches of Key Bank, N.A. on Long Island, New York.
Dime common stock is traded on the New York Stock Exchange under the
symbol "DME." The following table presents, for the periods indicated,
the high and low closing prices per share of Dime common stock.
<TABLE>
<CAPTION>
1997 1998 1999
---- ---- ----
High Low High Low High Low
<S> <C> <C> <C> <C> <C> <C>
First Quarter................ $ 17.88 $ 14.63 $ 31.06 $ 24.00 $ 27.06 $ 23.19
Second Quarter............... 19.00 14.88 32.06 28.06 24.44 20.13
Third Quarter................ 21.75 17.00 32.69 19.00 21.56 16.56
Fourth Quarter (for 1999,
through October 12)........ 30.25 21.06 27.81 18.19 18.06 16.50
</TABLE>
The closing price per share of Dime common stock was $20.50 on June 28,
1999, the last business day before the Hudson United - Southern Jersey
merger was announced, $17.75 on September 14, 1999, the day before the
Hudson United - Dime merger was announced, and $16.50 on October 12,
1999, a date shortly before the date of this supplement.
Additional information about Dime can be obtained from its filings with
the SEC, which can be accessed on the SEC's Internet site at
http://www.sec.gov.
Q: Dime Savings Bank is a "thrift" and Hudson United Bank is a commercial
bank - what form will the primary Dime United subsidiary take after the
merger?
A: It is expected that the primary depository institution subsidiary of
Dime United after the merger will be a New Jersey chartered commercial
bank to be named "DimeBank."
Q: What do I do now?
A: We urge you to read this supplement and the attached original proxy
statement-prospectus before deciding how to vote on the Hudson
United-Southern Jersey merger. Then, vote your shares in the manner
indicated below. Because of the importance of the information contained
in this supplement, we have decided to solicit new proxies for the
meeting. None of the white proxy cards which you or your fellow
shareholders sent in response to the original proxy solicitation will
be counted at the meeting. Even if you previously voted by proxy and do
not wish to change your vote, you must send in a green proxy card (or
vote in person at the meeting) for your vote to be counted.
Q: How do I vote by proxy?
A: Just indicate on the enclosed green proxy card how you want to vote
with respect to the Hudson United Southern Jersey merger. Sign the card
and mail it in the enclosed prepaid return envelope as soon as possible
so that your shares may be represented and voted at the meeting.
Q: Can I change my vote after I have mailed my signed proxy card?
A: Yes. There are three ways in which you may revoke your proxy and change
your vote. First, you may send a written notice of revocation to the
corporate secretary. (Information on how to contact the corporate
secretary of Southern Jersey is contained on page 4.) Second, you may
complete and submit a new proxy with a later date. Third, you may
attend Southern Jersey's meeting and request a return of your proxy or
vote in person. Simply showing up at the meeting without voting will
not revoke your proxy.
Q: Should I send in my stock certificates now?
A: No. After the Hudson United - Southern Jersey merger is completed,
Hudson United's exchange agent will send you written instructions for
exchanging your stock certificates for certificates representing Hudson
United common stock.
Q: When do you expect the Hudson United - Southern Jersey merger to be
completed?
A: We currently expect the Hudson United - Southern Jersey merger to be
completed during the fourth quarter of 1999. If all other closing
conditions are met, the closing may occur right after the Southern
Jersey shareholders approve the merger at the reconvened meeting.
However, the exact time when the merger will be completed is dependent
upon receipt of shareholder approval and bank regulatory approval, and
satisfaction of a number of other conditions, some of which are not
under Southern Jersey's control.
Q: What conditions must be met in order for the Hudson United - Dime
merger to close?
A: Completion of the Hudson United - Dime merger is contingent on the
satisfaction of a number of conditions, including:
o Approval of the merger agreement by both Hudson United and Dime
shareholders,
o Receipt of bank regulatory approvals,
o Receipt of an opinion from Dime's and Hudson United's counsels
regarding the tax-free nature of the merger, and
o Receipt of a letter from Dime's and Hudson United's independent
public accountants regarding qualification of the merger for
pooling-of-interests accounting.
Q: When do you expect the Hudson United-Dime merger to be completed?
A: We currently expect the Hudson United - Dime merger to be completed
during the first quarter of 2000. However, we cannot assure you that
the Hudson United - Dime merger will be completed or, if it is
completed, when that will occur.
Q: Will I get to vote on the Hudson United - Dime merger?
A: The Hudson United Board of Directors has not yet called a shareholders
meeting to vote on the Hudson United-Dime merger, and thus no record
date has been set. On the date this supplement is being mailed, Hudson
United expects that the Hudson United - Southern Jersey merger will be
completed before the record date for the meeting to vote on the Dime
merger. If that timetable is met, former Southern Jersey shareholders
will become Hudson United shareholders and will have the same
opportunity as other Hudson United shareholders to consider and vote on
the Dime merger. We cannot assure you that this will occur. If the
Hudson United-Southern Jersey merger does not close before the Hudson
United record date for voting on the Dime merger, you will not have an
opportunity to vote on the Dime merger. In that event, which we
consider unlikely, the Southern Jersey Board of Directors will
determine whether to further supplement the proxy statement-prospectus
and resolicit your approval of the Hudson United-Southern Jersey
merger.
Q: Where can I obtain a copy of the Hudson United - Dime merger agreement
and other information about the Hudson United - Dime merger?
A: The Hudson United - Dime merger agreement is an exhibit to Hudson
United's Current Report on Form 8-K filed with the SEC on September 24,
1999. The press release issued by Hudson United and Dime announcing the
merger agreement and certain information used to explain the merger to
stock analysts on the day of announcement and other relevant
information are exhibits to Hudson United's Current Report on Form 8-K
filed with the SEC on September 16, 1999. Certain additional
information explaining the merger are exhibits to Hudson United's
Current Report on Form 8-K filed with the SEC on September 20, 1999.
Each of these filings are incorporated by reference into the proxy
statement-prospectus. These and other SEC filings can be accessed on
the SEC's Internet site at http://www.sec.gov. In addition, you may
obtain copies of Southern Jersey or Hudson United filings free of
charge by writing or calling:
For Southern Jersey Documents:
Paul J. Ritter, III, Corporate Secretary
Southern Jersey Bancorp of Delaware, Inc.
53 South Laurel Street
Bridgeton, NJ 08302
(856) 453-3126
For Hudson United Documents:
D. Lynn Van Borkulo-Nuzzo, Corporate Secretary
Hudson United Bancorp
1000 MacArthur Boulevard
Mahwah, New Jersey 07430
(201) 236-2641
We will respond to your request within one business day by sending the
requested documents by first class mail or other equally prompt means.
In order to ensure timely delivery of the documents in advance of the
reconvened meeting, any request should be made by November 5, 1999.
Q: Whom should I call with questions or to obtain additional copies of
this document?
A: You should contact either Paul Ritter, III or D. Lynn Van
Borkulo-Nuzzo, at the addresses and telephone numbers listed in the
preceding answer.
<PAGE>
TABLE OF CONTENTS
Questions and Answers.........................................................1
How to Get Copies of Related Documents........................................5
Information Incorporated by Reference.........................................6
Information About the Proposed Hudson United - Dime Merger....................7
Information About Dime Bancorp, Inc...........................................9
Effect of the Hudson United - Dime Merger on Southern Jersey Shareholders.....9
Updated Opinion of Southern Jersey's Financial Advisor........................9
Recommendation of the Southern Jersey Board of Directors.....................10
Updated Summary Financial Data Of Hudson United..............................10
Updated Summary Financial Data Of Southern Jersey............................12
Recent Developments Concerning Hudson United ................................14
Status of Regulatory Approvals on the Southern Jersey - Hudson United Merger.14
Updated Comparative Share Information and Market Prices......................15
Summary Pro Forma Financial Information......................................16
Pro Forma Financial Information..............................................17
Information About the Reconvened Meeting.....................................25
Other Matters................................................................25
Experts ....................................................................26
Appendix A - Updated Opinion of Financial Advisor...........................A-1
- -------------------
Copies of Southern Jersey's Form 10-K/A for the period ending December
31, 1998, Form 10-Q for the period ending March 31, 1999, and Form 10-Q for the
period ending June 30, 1999 are attached to this document.
HOW TO GET COPIES OF RELATED DOCUMENTS
The proxy statement-prospectus and this supplement incorporate
important business and financial information that is not included in or
delivered with the proxy statement-prospectus or this supplement. Southern
Jersey shareholders may receive the information free of charge by writing or
calling the persons listed below. For Hudson United documents, make your request
to D. Lynn Van Borkulo-Nuzzo, Corporate Secretary, Hudson United Bancorp, 1000
MacArthur Boulevard, Mahwah, New Jersey 07430; telephone number (201) 236-2641.
For Southern Jersey documents, make your request to Paul J. Ritter, III,
Assistant Corporate Secretary, Southern Jersey Bancorp of Delaware, Inc., 53
South Laurel Street, Bridgeton, New Jersey 08302; telephone number (856)
453-3000. We will respond to your request within one business day by sending the
requested documents by first class mail or other equally prompt means. In order
to ensure timely delivery of the documents in advance of the reconvened meeting,
any request should be made by November 5, 1999.
INFORMATION INCORPORATED BY REFERENCE
Hudson United changed its name from HUBCO, Inc. on April 22, 1999 and
documents filed before that date may be located on the SEC Edgar database under
that name.
The following documents filed by Hudson United (Commission File No.
1-08660) with the SEC are hereby incorporated in the proxy statement-prospectus
and in this supplement:
o Annual Report on Form 10-K for the year ended December 31, 1998, as
amended by Form 10-K/A filed on September 28, 1999, and as further
amended by Form 10-K/A filed on October 12, 1999.
o Quarterly Reports on Form 10-Q for the quarters ended March 31 and
June 30, 1999, as amended by Form 10-Q/A filed on September 10,
1999. (The Form 10-Q/A clarifies that the authorized capital stock
of Hudson United consists of 100 million shares of common stock and
25 million shares of preferred stock.)
o Current Reports on Form 8-K filed with the SEC on January 28, March
29, April 19, April 22, May 25, June 29 (as amended on June 30),
July 26, September 16, September 20, September 24, September 24
(second filing), and October 5, 1999. One of Hudson United's two
Current Reports on Form 8-K filed on September 24, 1999 includes as
an exhibit the merger agreement between Hudson United and Dime.
Hudson United's Current Report on Form 8-K filed on October 5, 1999
includes as an exhibit Dime's audited financial statements for the
year ended December 31, 1998.
o The description of Hudson United common stock set forth in Hudson
United's Registration Statement on Form 8-A12B filed by Hudson
United on April 22, 1999, pursuant to Section 12 of the Exchange
Act, and any amendment or report filed for the purpose of updating
such description.
The following documents filed by Southern Jersey (Commission File No.
0-12635) with the SEC are hereby incorporated in the proxy statement-prospectus
and this supplement:
o Annual Report on Form 10-K for the year ended December 31, 1998, as
amended by Form 10 K/A filed on May 4, 1999. A copy of the amended
10-K is included with this supplement.
o Quarterly Reports on Form 10-Q for the quarters ended March 31 and
June 30, 1999, copies of which are included with this supplement.
o Current Report on Form 8-K filed with the SEC on August 12, 1999.
o The description of Southern Jersey common stock set forth in
Southern Jersey's Registration Statement on Form 8-A filed by
Southern Jersey pursuant to Section 12 of the Exchange Act, and any
amendment or report filed for the purpose of updating such
description.
All documents filed by Hudson United pursuant to Sections 13(a), 13(c),
14, or 15(d) of the Exchange Act after the date of this supplement but before
the earlier of (1) the date of the Southern Jersey meeting, or (2) the
termination of the Hudson United-Southern Jersey merger agreement, are hereby
incorporated by reference into the proxy statement-prospectus and this
supplement and shall be deemed a part of the proxy statement-prospectus and this
supplement from the date they are filed.
Any statement contained in a document incorporated by reference in the
proxy statement-prospectus and this supplement shall be considered modified or
superseded to the extent that a statement contained in the proxy
statement-prospectus, in this supplement, or in any subsequently filed document
incorporated by reference in the proxy statement-prospectus, modifies or
supersedes the statement. Any statement so modified or superseded shall not be
considered, except as so modified or superseded, to constitute a part of the
proxy statement-prospectus and this supplement.
The public may read and copy any documents Hudson United or Southern
Jersey file with the SEC at the SEC's Public Reference Room at 450 Fifth Street,
N.W., Washington, DC 20549. The public may obtain information on the operation
of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also
maintains an Internet site that contains reports, proxy and information
statements, and other information about Hudson United and Southern Jersey at
http://www.sec.gov.
INFORMATION ABOUT THE PROPOSED HUDSON UNITED - DIME MERGER
More Complete Information is Available Elsewhere. The following
information is derived primarily from the merger agreement between Hudson United
Bancorp and Dime Bancorp, Inc., dated September 15, 1999. Hudson United has
filed Current Reports on Form 8-K containing as exhibits the merger agreement,
the press release issued by Hudson United and Dime announcing the merger
agreement and certain information used to explain the merger to stock analysts.
These and other SEC filings can be accessed on the SEC's Internet site at
http://www.sec.gov. In addition, you may obtain copies of the SEC filings
incorporated by reference in the proxy statement-prospectus free of charge by
writing or calling D. Lynn Van Borkulo-Nuzzo, Corporate Secretary of Hudson
United, at the address and phone number shown for her on page 4.
Hudson United has entered into agreements with Dime. On September 15,
1999 Hudson United announced an agreement to merge with Dime Bancorp, Inc.
Hudson United and Dime also entered into customary stock option agreements by
which each provided the other with the right to purchase up to 19.9% of its
common stock under certain specified circumstances. These stock option
agreements are designed to deter third parties from attempting to acquire either
Hudson United or Dime.
The surviving corporation will be called Dime United Bancorp, Inc. The
transaction is structured so that Hudson United will merge into Dime, with Dime
as the surviving corporation. The name of the merged entity will be Dime United
Bancorp, Inc. In this supplement, we refer to the surviving corporation as "Dime
United." While Hudson United is a New Jersey corporation, Dime United will be a
Delaware corporation. The certificate of incorporation of Dime United will
differ from Hudson United's certificate of incorporation in certain respects.
Hudson United is a commercial bank holding company, while Dime is a unitary
savings and loan holding company. Dime United will be a commercial bank holding
company.
Management of the combined company will come from both Dime and Hudson
United. The transaction is structured as a "merger of equals." The Hudson
United-Dime merger agreement provides that the Board of Directors of Dime United
will initially be composed of 13 former Dime directors and 12 former Hudson
directors. Under the terms of the merger agreement, Lawrence J. Toal, currently
the Chairman and CEO of Dime, is to serve in the same capacity for Dime United
until his retirement on December 31, 2002. The merger agreement provides that
Kenneth T. Neilson, currently the Chairman and CEO of Hudson United, is to serve
as President and COO of Dime United until December 31, 2002, and then he is to
become Dime United's Chairman and CEO.
Each share of Hudson United is to become one share of Dime United. Upon
completion of the merger, each share of Hudson United common stock will
automatically become one share of common stock in Dime United. Each share of
Dime common stock will become 0.585 shares of Dime United common stock in the
merger. On September 14, 1999, the day before announcement of the Hudson United
- - Dime merger agreement, the closing price of Hudson United common stock on the
NYSE was $30.13 and the closing price of Dime common stock on the NYSE was
$17.75. On October 12, 1999, the closing price of Hudson United common stock was
$29.00 and the closing price of Dime common stock was $16.50.
Hudson United common stock and Dime common stock are NYSE-listed.
Hudson United common stock and Dime common stock are traded on the New York
Stock Exchange under the symbols "HU" and "DME", respectively. The Dime United
common stock is also expected to be listed on the NYSE.
The merger is intended to be tax-free for shareholders. The merger is
structured so that Hudson United shareholders will not generally recognize
federal income tax gain or loss upon receiving Dime United common stock in the
merger.
Dime United will operate its primary subsidiary as a commercial bank.
Dime Savings Bank is a "thrift" and Hudson United Bank is a New Jersey-chartered
commercial bank. It is expected that the primary depository institution
subsidiary of Dime United after the merger will be a New Jersey chartered
commercial bank named "DimeBank."
Completion of the merger is subject to numerous conditions. Completion
of the Hudson United - Dime merger is contingent on the satisfaction of a number
of conditions, including:
o Approval of the merger agreement by both Hudson United and Dime
shareholders,
o Receipt of bank regulatory approvals,
o Receipt of an opinion from Dime's and Hudson United's counsels
regarding the tax-free nature of the merger, and
o Receipt of a letter from Dime's and Hudson United's independent
public accountants regarding qualification of the merger for
pooling-of-interests accounting.
The merger is expected to close during the first quarter of 2000.
Assuming that shareholder approval is received and other closing conditions are
satisfied, Hudson United anticipates that its merger with Dime will be completed
during the first quarter of 2000. However, the exact time when that merger will
be completed is dependent upon receipt of approval from the shareholders of both
Hudson United and Dime, receipt of bank regulatory approval, and satisfaction of
a number of other conditions, many of which are outside Hudson United's control.
We cannot assure you that all of the conditions will be satisfied in a timely
fashion or at all.
INFORMATION ABOUT DIME BANCORP, INC.
Dime Bancorp, Inc. is a savings and loan holding company incorporated
in Delaware, and headquartered in New York City. Dime is the holding company for
The Dime Savings Bank of New York, FSB, a federally-chartered savings bank. The
principal subsidiary of Dime Savings Bank is North American Mortgage Company, a
mortgage banking company that was acquired by Dime in October 1997. At June 30,
1999, Dime operated 100 banking branches located throughout the greater New York
City metropolitan area. Directly and through North American Mortgage Company,
Dime also provides consumer financial services and mortgage banking services
throughout the United States. At June 30, 1999, Dime had assets of $21.4
billion, deposits of $13.4 billion and stockholders' equity of $1.5 billion.
Dime is currently in the process of acquiring 28 branches of Key Bank, N.A. on
Long Island, New York. Additional information about Dime can be obtained from
its filings with the SEC.
EFFECT OF THE HUDSON UNITED - DIME MERGER ON SOUTHERN JERSEY SHAREHOLDERS
Our merger agreement with Hudson United calls for Southern Jersey
shareholders to receive 1.26 shares of Hudson United common stock for each share
of Southern Jersey common stock. The Hudson United-Dime merger agreement
provides that each share of Hudson United common stock will be converted into
one share of Dime United common stock. Therefore, if the Southern Jersey -
Hudson United merger is completed, and the Hudson United Dime merger is also
completed, each share of Southern Jersey common stock will ultimately become
1.26 shares of Dime United common stock. These shares would represent an equity
interest in a corporation which includes the combined operations of Hudson
United and Dime. On a pro forma basis, assuming completion of Hudson United's
pending acquisitions of Southern Jersey and JeffBanks, Inc., the combined entity
would have assets in excess of $30 billion, banking operations in four states
(New York, New Jersey, Pennsylvania and Connecticut), and nationwide consumer
financial services and mortgage banking activities. See the Pro Forma Financial
Information beginning on page 17.
When you vote on the Southern Jersey - Hudson United merger, you are
not voting on the Hudson United Dime merger. We cannot assure you that the
Hudson United - Dime merger will be completed or, if it is completed, when that
will occur.
UPDATED OPINION OF SOUTHERN JERSEY'S FINANCIAL ADVISOR
First Capital Group, LLC has delivered its written opinion to the
Southern Jersey Board of directors, dated July 8, 1999, updated as of the date
of the proxy statement-prospectus, and updated again as of the date of this
supplement in light of the proposed Hudson United - Dime merger, that the
consideration that Southern Jersey will receive from Hudson United is fair, from
a financial point of view, to Southern Jersey shareholders. In updating its
opinion, First Capital reviewed (i) the publicly available consolidated
financial statements of Dime for recent years and interim periods to date; (ii)
certain other relevant financial and operating data of Dime and Hudson United,
respectively, made available to First Capital from published sources and the
internal records of Hudson United; (iii) recent publicly available filings of
Hudson United filed with respect to the proposed Hudson United - Dime merger,
including copies of the Agreement and Plan of Merger between Hudson United and
Dime dated September 15, 1999; Stock Option Agreement between Dime and Hudson
United dated September 16, 1999; Stock Option Agreement between Hudson United
and Dime dated September 16, 1999; certain press releases; and the Investor
Presentation Materials dated September 1999; (iv) the publicly available
consolidated financial statements of JeffBanks for recent years and interim
periods to date; (v) certain other relevant financial and operating data of
JeffBanks made available to First Capital from published sources and the
internal records of Hudson United; (vi) recent publicly available filings of
Hudson United filed with respect to the proposed Hudson United - JeffBanks
merger, including copies of the Agreement and Plan of Merger between Hudson
United and JeffBanks dated June 28, 1999; Stock Option Agreement between Hudson
United and JeffBanks dated June 28, 1999; and certain press releases; (vii)
recent publicly available consolidated financial statements of Southern Jersey;
(viii) certain published bank stock indexes and reported prices and trading
activity for the common shares of Hudson United, Dime, JeffBanks and Southern
Jersey; (ix) certain analyst reports; (x) recent developments of Hudson United
and Southern Jersey; (xi) certain pro forma financial information reflecting the
combination of Hudson United, Dime, JeffBanks and Southern Jersey; and (xii)
such other information as First Capital deemed appropriate. In addition to
reviewing this material, First Capital discussed with certain members of
management of Hudson United and Southern Jersey, respectively, the business,
financial condition and prospects of Hudson United and Southern Jersey and
performed such other analyses and examinations and considered such other
information, financial studies, analysis and investigations and financial,
economic and market data as First Capital deemed appropriate. Additional
information about First Capital's analysis and its earlier written opinion is
set forth in the proxy statement-prospectus at pages 32-36 and at Appendix C.
The full text of the most recently updated opinion of First Capital,
which sets forth assumptions made and matters considered, is attached hereto as
Appendix A to this supplement. Southern Jersey shareholders are urged to read
this opinion in its entirety. First Capital's opinion is directed only to the
consideration to be received by Southern Jersey shareholders in the merger of
Southern Jersey with Hudson United and does not constitute a recommendation to
any Southern Jersey shareholder as to how such shareholder should vote at the
shareholders meeting or with respect to any subsequent shareholder vote
regarding the proposed merger of Hudson United with Dime.
RECOMMENDATION OF THE SOUTHERN JERSEY BOARD OF DIRECTORS
On October 8, 1999, the Southern Jersey Board of Directors, having
considered the impact of the Hudson United - Dime merger agreement, confirmed
its approval of the Hudson United - Southern Jersey merger agreement, and
determined that the Hudson United - Southern Jersey merger remains fair to, and
in the best interests of, Southern Jersey and its shareholders. Accordingly, the
Board of Directors of Southern Jersey unanimously recommends that Southern
Jersey shareholders vote FOR approval of the Hudson United - Southern Jersey
merger agreement and merger.
UPDATED SUMMARY FINANCIAL DATA OF HUDSON UNITED
The following is a summary of certain historical consolidated financial
data for Hudson United as of and for the six months ended June 30, 1999 and
1998. This financial data should be read in conjunction with the financial data
for Hudson United for the years 1994 through 1998, and as of the end of those
years, set forth on pages 9-11 of the proxy statement-prospectus. The data
presented as of and for the six months ended June 30, 1999 and 1998 comes from
Hudson United's unaudited consolidated financial statements. Hudson United's
unaudited consolidated financial statements as of and for the six months ended
June 30, 1999 and 1998 are incorporated by reference in this document. See pages
6 - 7.
In the opinion of Hudson United's management, the unaudited data shown
below reflects all adjustments necessary for a fair presentation of that data.
All such adjustments were normal, recurring adjustments. Results for the six
months ended June 30, 1999 do not necessarily indicate the results that you
should expect for any other interim period or for the year as a whole.
<PAGE>
<TABLE>
<CAPTION>
At or for the Six Months ended June 30,
-------------------------------------------------
1999 1998
----------------- -----------------
(Dollars in thousands, except per share amounts)
<S> <C> <C>
Earnings Summary:
Interest income $ 232,369 $ 233,377
Interest expense 102,069 106,974
-------------- -------------
Net interest income 130,300 126,403
Provision for possible loan losses 5,000 9,099
-------------- -------------
Net interest income after provision for
possible loan losses 125,300 117,304
Other income 34,520 28,961
Other expenses 82,807 114,004
-------------- -------------
Income before income taxes 77,013 32,261
Income tax provision 26,950 12,777
-------------- -------------
Net income $ 50,063 $ 19,484
============== =============
Share Data:
Weighted average common shares
Outstanding (in thousands):
Basic 39,829 40,912
Diluted 40,380 42,234
Basic earnings per share $ 1.26 $ 0.48
Diluted earnings per share 1.24 0.46
Cash dividends per common share 0.50 0.39
Book value per common share 10.70 11.77
Balance Sheet Summary:
Securities held to maturity $ 629,133 $ 919,356
Securities available for sale 2,580,667 1,943,323
Loans 3,537,792 3,523,517
Total assets 7,226,088 7,016,924
Deposits 4,997,836 5,439,595
Stockholders' equity 422,989 478,879
Performance Ratios:
Return on average assets 1.49 % 0.60 %
Return on average equity 23.19 7.74
Dividend payout 39.68 81.25
Average equity to average assets 6.41 7.78
Net interest margin 4.15 4.19
Asset Quality Ratios:
Allowance for possible loan losses to total
loans 1.57 % 1.88 %
Allowance for possible loan losses to
non-performing loans 289 110
Non-performing loans to total loans 0.54 1.72
Non-performing assets to total loans, plus
other real estate 0.59 1.99
Net charge-offs to average loans 0.24 0.59
</TABLE>
<PAGE>
UPDATED SUMMARY FINANCIAL DATA OF SOUTHERN JERSEY
The following is a summary of certain selected historical consolidated
financial data for Southern Jersey as of and for the six months ended June 30,
1999 and 1998. This financial data should be read in conjunction with the
financial data for Southern Jersey for the years 1994 through 1998, and as of
the end of those years, set forth on pages 12-14 of the proxy
statement-prospectus. The data presented as of and for the six months ended June
30, 1999 and 1998 comes from Southern Jersey's unaudited consolidated financial
statements. Southern Jersey's unaudited consolidated financial statements as of
and for the six months ended June 30, 1999 and 1998 are incorporated by
reference in this document. See pages 6-7.
In the opinion of Southern Jersey's management, the unaudited data
shown below reflects all adjustments necessary for a fair presentation of that
data. All such adjustments were normal, recurring adjustments. Results for the
six months ended June 30, 1999 do not necessarily indicate the results that you
should expect for any other interim period or for the year as a whole.
<TABLE>
<CAPTION>
At or for the Six Months ended June 30,
------------------------------------------------
1999 1998
----------- -----------------
Earnings Summary: (Dollars in thousands, except per share amounts)
<S> <C> <C>
Interest income $ 14,499 $ 17,245
Interest expense 8,435 9,155
----------- -----------------
Net interest income 6,064 8,090
Provision for possible loan losses 1,060 2,900
----------- -----------------
Net interest income after provision for possible
loan losses 5,004 5,190
Other income 2,274 1,757
Other expenses 7,732 7,799
----------- -----------------
Income (loss) before income taxes (454) (852)
Income tax provision 0 0
----------- -----------------
Net income (loss) $ (454) $ (852)
=========== =================
Share Data:
Weighted average common shares
Outstanding (in thousands):
Basic 1,127 1,124
Diluted 1,127 1,124
Basic earnings (loss) per share $ (0.40) $ (0.76)
Diluted earnings (loss) per share (0.40) (0.76)
Cash dividends per common share - -
Book value per common share 24.98 34.09
Balance Sheet Summary:
Securities held to maturity $ - $ 59,362
Securities available for sale 114,148 40,393
Loans 242,194 289,582
Total assets 452,417 482,335
Deposits 419,109 438,956
Stockholders' equity 28,157 38,320
Performance Ratios:
Return on average assets (0.10%) (0.18%)
Return on average equity (1.55) (2.14)
Dividend payout - -
Average equity to average assets 6.26 6.26
Net interest margin 2.85 3.66
Asset Quality Ratios:
Allowance for possible loan losses to total Loans
3.79 % 2.44 %
Allowance for possible loan losses to
non-performing loans 48 66
Non-performing loans to total loans 7.97 3.70
Non-performing assets to total loans, plus Other
real estate 9.34 5.31
Net charge-offs to average loans 0.82 0.36
</TABLE>
<PAGE>
RECENT DEVELOPMENTS CONCERNING HUDSON UNITED
Acquisition of Lyon Credit Corporation.
On September 10, 1999, Hudson United Bank entered into an agreement to
purchase substantially all the assets of Lyon Credit Corporation. The
transaction is expected to close during the fourth quarter of 1999, and will add
approximately $350 million of project finance, equipment, and asset based loans
to Hudson United Bank's assets, along with loan production offices in Stamford,
CT, Atlanta, Dallas, Irvine, CA, Chicago, Houston, San Francisco, and Portland,
OR.
STATUS OF REGULATORY APPROVALS
ON THE SOUTHERN JERSEY - HUDSON UNITED MERGER
Hudson United has applied to all necessary bank regulatory authorities
for approval of the Southern Jersey - Hudson United merger. The Federal Reserve
Board has agreed to waive its approval requirement with respect to the merger
based upon the need for approval by the Federal Deposit Insurance Corporation.
As of the date of this document, we have not yet received the required approvals
of the FDIC and the New Jersey Department of Banking and Insurance. While we do
not know of any reason why we would not be able to obtain the necessary
approvals in a timely manner, we cannot be certain when or if we will receive
them. As of the date of this supplement, neither Hudson United nor Dime has
applied for any regulatory approvals for the Hudson United - Dime merger.
<PAGE>
UPDATED COMPARATIVE SHARE INFORMATION
AND MARKET PRICES
The first table below presents, for the periods indicated, the high and
low closing prices per share of Hudson United common stock and Southern Jersey
common stock. The closing prices of Hudson United common stock have been
restated to give retroactive effect to stock dividends and stock splits. The
second table presents information concerning the last closing price of Hudson
United common stock and Southern Jersey common stock on June 28, 1999, the last
business day before the Southern Jersey - Hudson United merger was announced, on
September 14, the last day before the Hudson United - Dime merger agreement was
announced, and on October 12, 1999, a date shortly before the date of this
supplement. The second table also presents the equivalent value of Hudson United
common stock per Southern Jersey share which is computed by multiplying the last
closing price of Hudson United common stock on the dates indicated by the 1.26
exchange ratio in the Southern Jersey - Hudson United merger agreement. Hudson
United common stock is listed on the New York Stock Exchange under the symbol
"HU." Until April 30, 1999, Hudson United's common stock was listed on the
NASDAQ National Market. Southern Jersey common stock is traded on the NASDAQ
Over-the-Counter Bulletin Board under the symbol "SOJB." We urge you to obtain
current market quotations for Hudson United common stock and Southern Jersey
common stock.
<PAGE>
<TABLE>
<CAPTION>
Closing Sale Price Per Closing Sale Price Per
Share of Hudson United Share of Southern Jersey
Common Stock Common Stock
------------ ------------
High Low High Low
---- --- ---- ---
1997:
<S> <C> <C> <C> <C>
First Quarter.......................... $ 25.03 $ 21.44 $ 44.23 $ 38.84
Second Quarter......................... 27.57 20.86 44.66 41.26
Third Quarter.......................... 31.11 26.16 45.63 43.69
Fourth Quarter......................... 37.99 30.05 60.19 44.90
1998:
First Quarter.......................... $ 37.86 $ 32.28 $ 61.17 $ 58.25
Second Quarter......................... 37.62 31.25 61.17 48.54
Third Quarter.......................... 35.00 25.38 48.54 40.78
Fourth Quarter......................... 30.13 21.63 41.99 32.25
1999:
First Quarter.......................... $ 34.25 $ 29.75 $ 32.00 $ 27.00
Second Quarter......................... 36.00 30.63 37.75 21.75
Third Quarter.......................... 33.75 28.31 40.38 34.25
Fourth Quarter (through October 12, 1999) 31.31 29.00 34.25 33.88
Closing Sale Closing Sale Equivalent Value of
Closing Sale Price Per Share Hudson United Common
Price Per Share of Southern Stock Per Share of
of Hudson United Jersey Common Southern Jersey Common
Common Stock Stock Stock
------------ ----- -----
Date
June 28, 1999................ $34.94 $23.75 $44.02
September 14, 1999........... 30.13 36.50 37.96
October 12, 1999............. 29.00 34.25 36.54
</TABLE>
<PAGE>
SUMMARY PRO FORMA FINANCIAL INFORMATION
We present on this page certain pro forma unaudited combined condensed
financial information derived from the unaudited Pro Forma Financial Information
for the periods and at the dates indicated. The pro forma combined information
gives effect to the proposed mergers of Southern Jersey, JeffBanks and Dime,
each accounted for as a pooling-of-interests, as if the mergers had been
consummated for statement of income purposes on the first day of the applicable
periods and for balance sheet purposes on June 30, 1999. Information relative to
each individual merger is presented in the Pro Forma Financial Information,
which begins on the next page. This summary pro forma financial information is
based on the historical financial statements of Hudson United, Southern Jersey,
JeffBanks and Dime incorporated by reference herein. Hudson United's historical
earnings per share have been restated to give retroactive effect to stock
dividends and splits. The pro forma combined information does not include the
effect of Hudson United's pending acquisition of loans and deposits from Advest
Bank or its pending acquisition of the assets of Lyon Credit Corporation. We
have determined that the Advest and Lyon Credit acquisitions do not present
significant acquisitions in the context of the pro forma financial information.
The pro forma combined information does not include the effect of Dime's pending
acquisition of 28 branches of Key Bank, N.A. In addition, the pro forma combined
information as of June 30, 1999 does not include Dime's acquisition of
Citibank's auto financing unit, which was consummated after June 30, 1999.
Information regarding the acquisitions of certain assets and liabilities of Key
Bank and Citibank have not been included because these acquisitions do not
present significant acquisitions in the context of the pro forma financial
information and because separate financial statements for such assets and
liabilities are not prepared by the companies from which such assets and
liabilities were acquired or are to be acquired.
The Summary Pro Forma Financial Information should be read in
conjunction with the Pro Forma Financial Information and the related notes
thereto beginning on the next page and the consolidated financial statements and
related notes incorporated by reference in this document. The Summary Pro Forma
Financial Information is not necessarily indicative of the actual financial
results that would have occurred had the mergers been consummated as of the
beginning of the periods for which the data is presented and should not be
construed as being representative of future periods.
<TABLE>
<CAPTION>
Summary Pro Forma Unaudited Combined Condensed Financial Information
(In thousands, except for per share data)
For the Six
Months Ended For the Years Ended December 31,
June 30, 1999 1998 1997 1996
------------- ---- ---- ----
<S> <C> <C> <C> <C>
Net interest income before provision for
Possible loan losses $443,120 $856,083 $809,606 $773,922
Provision for possible loan losses 24,545 67,607 73,442 70,060
Net interest income after provision for
Possible loan losses 418,575 788,476 736,164 703,862
Income before income taxes
and extraordinary items 276,976 398,357 331,268 230,548
Income tax provision 99,451 130,463 124,099 78,988
Income before extraordinary items 177,525 267,894 207,169 151,560
Income before extraordinary items per share:
Basic 1.52 2.27 1.80 1.33
Diluted 1.50 2.22 1.74 1.27
<CAPTION>
As of
June 30, 1999
-------------
Total assets $30,965,672
Total deposits 20,216,166
Total stockholders' equity 1,991,632
Book value per common share 16.96
</TABLE>
<PAGE>
PRO FORMA FINANCIAL INFORMATION
Presented on the following page is a pro forma unaudited combined
condensed balance sheet of Hudson United, Southern Jersey, JeffBanks and Dime at
June 30, 1999, giving effect to each merger as if it had been consummated at
such date. Also presented are the pro forma unaudited combined condensed
statements of income for the six-month period ended June 30, 1999 and for the
years ended December 31, 1998, 1997 and 1996. The unaudited pro forma financial
information is based on the historical financial statements of Hudson United,
Southern Jersey, JeffBanks and Dime after giving effect to each merger under the
pooling-of-interests method of accounting and based upon the assumptions and
adjustments contained in the accompanying notes to pro forma financial
information.
The unaudited pro forma financial information has been prepared by
Hudson United's management based upon the historical financial statements and
related notes thereto of Hudson United, Southern Jersey, JeffBanks and Dime,
which are incorporated herein by reference. The unaudited pro forma financial
information should be read in conjunction with those historical financial
statements and notes. The pro forma combined information does not include the
effect of Hudson United's pending acquisition of loans and deposits from Advest
Bank or its pending acquisition of the assets of Lyon Credit Corporation. We
have determined that the Advest and Lyon Credit acquisitions do not present
significant acquisitions in the context of the pro forma financial information.
The pro forma combined information does not include the effect of Dime's pending
acquisition of 28 branches of Key Bank, N.A. In addition, the pro forma combined
information as of June 30, 1999 does not include Dime's acquisition of
Citibank's auto financing unit, which was consummated after June 30, 1999.
Information regarding the acquisitions of certain assets and liabilities of Key
Bank and Citibank have not been included because these acquisitions do not
present significant acquisitions in the context of the pro forma financial
information and because separate financial statements for such assets and
liabilities are not prepared by the companies from which such assets and
liabilities were acquired or are to be acquired.
The pro forma financial data is not necessarily indicative of the
actual financial results that would have occurred had the mergers been
consummated as of the beginning of the periods for which the data is presented
and should not be construed as being representative of future periods.
<PAGE>
<TABLE>
<CAPTION>
Pro forma Unaudited Combined Condensed
Balance Sheets
As of June 30, 1999
(Dollars in thousands, except per share data)
Hudson Southern Pro forma Pro forma Pro forma
Assets United Jersey Adjustment Combined JeffBanks Adjustments
------ ----------- ---------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Cash and due from banks ......... $ 192,918 $ 20,625 $ -- $ 213,543 $ 52,207 $ --
Federal funds sold and
other investments.............. 8,201 50,050 -- 58,251 79,100 --
Securities ...................... 3,209,800 114,148 -- 3,323,948 313,956 --
Loans held for sale ............. -- -- -- -- 19,951 --
Loans ........................... 3,537,792 242,194 -- 3,779,986 1,338,949 --
Less: Allowance for loan losses (55,680) (9,182) -- (64,862) (12,203) --
------------ ------------ ----------- ----------- ------------ -------------
Total loans ................. 3,482,112 233,012 -- 3,715,124 1,326,746 --
------------ ------------ ----------- ----------- ------------ -------------
Other assets .................... 227,153 34,582 -- 261,735 60,342 --
Intangibles, net of amortization 105,904 -- -- 105,904 5,082 --
------------ ------------ ----------- ----------- ------------ -------------
Total Assets ............... $ 7,226,088 $ 452,417 $ -- $ 7,678,505 $ 1,857,384 $ --
============ ============ =========== =========== ============ ==============
Liabilities and Stockholders' Equity
- ------------------------------------
Deposits ........................ $ 4,997,836 $ 419,109 $ -- $ 5,416,945 $ 1,384,423 $ --
Borrowings ...................... 1,504,399 -- -- 1,504,399 259,239 --
Other liabilities ............... 100,864 5,151 -- 106,015 24,580 --
------------ ------------ ----------- ----------- ------------ -------------
6,603,099 424,260 -- 7,027,359 1,668,242 --
Subordinated debt ............... 100,000 -- -- 100,000 31,920 --
Capital Trust Securities ........ 100,000 -- -- 100,000 25,300 --
------------ ------------ ----------- ----------- ------------ -------------
Total Liabilities .......... 6,803,099 424,260 -- 7,227,359 1,725,462 --
------------ ------------ ----------- ----------- ------------ -------------
Stockholders' Equity:
Common stock ............... 72,246 2,184 383 74,813 10,583 7,293
Additional paid in capital . 264,468 3,259 (4,207) 263,520 98,177 (7,293)
Retained earnings .......... 144,176 29,095 -- 173,271 26,961 --
Treasury stock ............. (36,504) (3,824) 3,824 (36,504) -- --
Employee stock awards
& ESOP shares............ (3,387) -- -- (3,387) -- --
Accumulated other
comprehensive loss...... (18,010) (2,557) -- (20,567) (3,799) --
------------ ------------ ----------- ----------- ------------ -------------
Total Stockholders'
Equity................ 422,989 28,157 -- 451,146 131,922 --
------------ ------------ ----------- ----------- ------------ -------------
Total Liabilities and
Stockholders' Equity....... 7,226,088 452,417 -- 7,678,505 1,857,384 $ --
============ ============ =========== =========== ============ =============
Common shares outstanding
(in thousands) ................. 39,532 1,128 40,976 10,583
Book value per common share ..... $ 10.70 $ 24.96 $ 11.01 $ 12.47
<PAGE>
<CAPTION>
Pro forma Pro forma Pro forma
Assets Combined Dime Adjustments Combined
- ------ -------- ---- ----------- --------
<S> <C> <C> <C> <C>
Cash and due from banks ......... $ 265,750 $ 300,543 $ -- $ 566,293
Federal funds sold and
other investments............... 137,351 12,588 -- 149,939
Securities ...................... 3,637,904 3,826,738 -- 7,464,642
Loans held for sale ............. 19,951 2,512,648 -- 2,532,599
Loans ........................... 5,118,935 12,711,182 -- 17,830,117
Less: Allowance for loan losses (77,065) (121,381) -- (198,446)
------------ ------------ ------------ -------------
Total loans ................. 5,041,870 12,589,801 -- 17,631,671
------------ ------------ ------------ -------------
Other assets .................... 322,077 1,884,442 -- 2,206,519
Intangibles, net of amortization 110,986 303,023 -- 414,009
------------ ------------ ------------ --------------
Total Assets ............... $ 9,535,889 $ 21,429,783 $ -- $ 30,965,672
============ ============ ============ ================
Liabilities and Stockholders' Equity
- ------------------------------------
Deposits ........................ $ 6,801,368 $ 13,414,798 $ -- $ 20,216,166
Borrowings ...................... 1,763,638 5,916,453 -- 7,680,091
Other liabilities ............... 130,595 400,995 84,879 616,469
------------ ------------ ------------ -------------
8,695,601 19,732,246 84,879 28,512,726
Subordinated debt ............... 131,920 51,886 -- 183,806
Capital Trust Securities ........ 125,300 152,208 -- 277,508
------------ ------------ ------------ -------------
Total Liabilities .......... 8,952,821 19,936,340 84,879 28,974,040
------------ ------------ ------------ -------------
Stockholders' Equity:
Common stock ............... 92,689 1,203 (92,717) 1,175
Additional paid in capital . 354,404 1,165,759 (124,267) 1,395,896
Retained earnings .......... 200,232 561,428 (94,000) 667,660
Treasury stock ............. (36,504) (180,480) 216,984 --
Employee stock awards
& ESOP shares (3,387) (5,825) 9,121 (91)
Accumulated other
comprehensive loss........ (24,366) (48,642) -- (73,008)
------------ ------------ ---------- -----------
Total Stockholders'
Equity............... 583,068 1,493,443 (84,879) 1,991,632
------------ ------------ ---------- -----------
Total Liabilities and
Stockholders' Equity...... $ 9,535,889 $ 21,429,783 $ -- $ 30,965,672
============ ============ ============ =============
Common shares outstanding
(in thousands)................. 51,030 113,539 -- 117,450
Book value per common share ..... $ 11.43 $ 13.15 $ -- $ 16.96
</TABLE>
See notes to pro forma financial information.
<PAGE>
<TABLE>
<CAPTION>
Pro forma Unaudited Combined Condensed
Statements of Income
For the Six Months Ended June 30, 1999
(Dollars in thousands, except per share data)
Hudson Southern Pro forma Pro Forma Pro Forma
United Jersey Combined JeffBanks Combined Dime Combined
----------- ------------ ------------- ----------- -------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Interest on loans $ 142,808 $ 9,463 $ 152,271 $ 52,816 $ 205,087 $ 547,495 $ 752,582
Interest on securities 89,035 3,252 92,287 9,095 101,382 126,360 227,742
Other interest income 526 1,784 2,310 544 2,854 776 3,630
---------- ----------- ------------ ---------- ------------ ----------- -----------
Total Interest Income 232,369 14,499 246,868 62,455 309,323 674,631 983,954
---------- ----------- ------------ ---------- ------------ ----------- -----------
Interest on deposits 64,185 8,435 72,620 23,213 95,833 236,353 332,186
Interest on borrowings 37,884 - 37,884 7,874 45,758 162,890 208,648
---------- ----------- ------------ ---------- ------------ ----------- -----------
Total Interest Expense 102,069 8,435 110,504 31,087 141,591 399,243 540,834
---------- ----------- ------------ ---------- ------------ ----------- -----------
Net Interest Income before
Provision for loan loss 130,300 6,064 136,364 31,368 167,732 275,388 443,120
Provision for loan loss 5,000 1,060 6,060 2,985 9,045 15,500 24,545
---------- ----------- ------------ ---------- ------------ ----------- -----------
Net Interest Income after
Provision for loan loss 125,300 5,004 130,304 28,383 158,687 259,888 418,575
Noninterest income 34,520 2,274 36,794 8,084 44,878 301,733 346,611
Noninterest expense 82,807 7,732 90,539 26,184 116,723 371,487 488,210
---------- ----------- ------------ ---------- ------------ ----------- -----------
Income (loss) before income taxes
Income (loss) before income taxes
And extraordinary items 77,013 (454) 76,559 10,283 86,842 190,134 276,976
Income tax provision 26,950 - 26,950 2,152 29,102 70,349 99,451
---------- ----------- ----------- ---------- ------------ ----------- -----------
Income (loss) before extraordinary
Items $ 50,063 $ (454) $ 49,609 $ 8,131 $ 57,740 $ 119,785 $ 177,525
========== =========== ============ ========== ============ =========== ===========
Income (Loss) Before Extraordinary
Items Per Share:
Basic $ 1.26 $ (0.40) $ 1.20 $ 0.77 $ 1.13 $ 1.08 $ 1.52
Diluted $ 1.24 $ (0.40) $ 1.19 $ 0.74 $ 1.10 $ 1.06 $ 1.50
Weighted Average Common Shares:
(in thousands)
Basic 39,829 1,127 41,272 10,517 51,263 111,470 116,473
Diluted 40,380 1,127 41,823 11,010 52,283 112,841 118,295
</TABLE>
Notes to Pro forma financial information.
<PAGE>
<TABLE>
<CAPTION>
Pro forma Unaudited Combined Condensed Statements of Income For the Year
Ended December 31, 1998 (Dollars in thousands, except per share data)
Hudson Southern Pro Forma Pro Forma Pro Forma
United Jersey Combined JeffBanks Combined Dime Combined
----------- ------------ ------------ ----------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Interest on loans $ 298,311 $ 24,624 $ 322,935 $ 99,924 $ 422,859 $ 1,159,364 $ 1,582,223
Interest on securities 162,783 5,983 168,766 21,025 189,791 255,719 445,510
Other interest income 7,453 2,676 10,129 2,544 12,673 5,802 18,475
--------- ----------- ------------ ----------- ---------- ------------ ------------
Total Interest Income 468,547 33,283 501,830 123,493 625,323 1,420,885 2,046,208
--------- --------- ------------ ----------- ---------- ------------ ------------
Interest on deposits 161,077 18,400 179,477 48,858 228,335 545,827 774,162
Interest on borrowings 53,276 - 53,276 14,862 68,138 347,825 415,963
--------- ----------- ------------ ----------- ---------- ------------ ------------
Total Interest Expense 214,353 18,400 232,753 63,720 296,473 893,652 1,190,125
--------- ----------- ------------ ----------- ---------- ------------ ------------
Net Interest Income before
Provision for loan loss 254,194 14,883 269,077 59,773 328,850 527,233 856,083
Provision for loan loss 14,374 15,270 29,644 5,963 35,607 32,000 67,607
--------- ----------- ------------ ----------- ---------- ------------ ------------
Net Interest Income (Loss)
After provision for loan loss 239,820 (387) 239,433 53,810 293,243 495,233 788,476
Noninterest income 33,299 3,509 36,808 15,215 52,023 525,030 577,053
Noninterest expense 232,096 15,842 247,938 53,593 301,531 665,641 967,172
--------- ----------- ------------ ----------- ---------- ------------ -----------
Income (loss) before income taxes
And extraordinary items 41,023 (12,720) 28,303 15,432 43,735 354,622 398,357
Income tax provision (benefit) 17,872 (4,888) 12,984 4,000 16,984 113,479 130,463
--------- ----------- ----------- ----------- --------- ----------- ------------
Income (loss) before extraordinary
Items $ 23,151 $ (7,832) $ 15,319 $ 11,432 $ 26,751 $ 241,143 $ 267,894
========= =========== ============ =========== ========== ============ ============
Income (Loss) Before Extraordinary
Items Per Share:
Basic $ 0.57 $ (6.95) $ 0.36 $ 1.11 $ 0.52 $ 2.13 $ 2.27
Diluted $ 0.56 $ (6.95) $ 0.36 $ 1.04 $ 0.50 $ 2.09 $ 2.22
Weighted Average Common Shares:
(in thousands)
Basic 40,640 1,127 42,083 10,301 51,869 113,452 118,238
Diluted 41,696 1,127 43,139 10,956 53,547 115,153 120,912
</TABLE>
See notes to pro forma financial information.
<PAGE>
<TABLE>
<CAPTION>
Pro forma Unaudited Combined Condensed Statements of Income For the Year
Ended December 31, 1997 (Dollars in thousands, except per share data)
Hudson Southern Pro Forma Pro Forma Pro forma
United Jersey Combined JeffBanks Combined Dime Combined
------------- ------------ ------------- ------------- ------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Interest on loans $ 306,800 $ 25,834 $ 332,634 $ 87,794 $ 420,428 $ 919,890 $1,340,318
Interest on securities 159,620 6,123 165,743 18,895 184,638 430,555 615,193
Other interest income 4,795 1,843 6,638 3,931 10,569 32,370 42,939
------------ ---------- ----------- ----------- ------------ ----------- -----------
Total Interest Income 471,215 33,800 505,015 110,620 615,635 1,382,815 1,998,450
------------ ---------- ----------- ----------- ------------ ----------- -----------
Interest on deposits 175,645 17,159 192,804 40,776 233,580 559,359 792,939
Interest on borrowings 40,635 - 40,635 14,876 55,511 340,394 395,905
------------ ---------- ----------- ----------- ------------ ----------- -----------
Total Interest Expense 216,280 17,159 233,439 55,652 289,091 899,753 1,188,844
------------ ---------- ----------- ----------- ------------ ----------- -----------
Net Interest Income before
Provision for loan loss 254,935 16,641 271,576 54,968 326,544 483,062 809,606
Provision for loan loss 12,775 7,967 20,742 3,700 24,442 49,000 73,442
------------ ---------- ----------- ----------- ------------ ----------- -----------
Net Interest Income after
Provision for loan loss 242,160 8,674 250,834 51,268 302,102 434,062 736,164
Noninterest income 54,180 3,043 57,223 13,203 70,426 145,291 215,717
Noninterest expense 181,308 11,590 192,898 46,570 239,468 381,145 620,613
------------ ---------- ----------- ----------- ------------ ----------- -----------
Income before income taxes
And extraordinary items 115,032 127 115,159 17,901 133,060 198,208 331,268
Income tax provision (benefit) 45,205 (710) 44,495 4,570 49,065 75,034 124,099
------------ ---------- ----------- ----------- ------------ ----------- -----------
Income before extraordinary items $ 69,827 $ 837 $ 70,664 $ 13,331 $ 83,995 $ 123,174 $ 207,169
============ ========== =========== =========== ============ =========== ===========
Income Before Extraordinary
Items Per Share:
Basic $ 1.67 $ 0.75 $ 1.64 $ 1.33 $ 1.59 $ 1.15 $ 1.80
Diluted $ 1.60 $ 0.73 $ 1.57 $ 1.25 $ 1.52 $ 1.13 $ 1.74
Weighted Average Common
Shares:
(in thousands)
Basic 41,362 1,120 42,808 9,660 51,985 106,585 114,337
Diluted 43,635 1,148 45,081 10,317 54,882 108,613 118,421
</TABLE>
See notes to pro forma financial information.
<PAGE>
<TABLE>
<CAPTION>
Pro forma Unaudited Combined Condensed Statements of Income For the Year
Ended December 31, 1996 (Dollars in thousands, except per share data)
Hudson Southern Pro Forma Pro Forma Pro Forma
United Jersey Combined JeffBanks Combined Dime Combined
------------- ------------- ------------ ----------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Interest on loans $ 287,671 $ 22,441 $ 310,112 $ 86,145 $ 396,257 $ 784,109 $ 1,180,366
Interest on securities 150,856 6,802 157,658 18,548 176,206 540,252 716,458
Other interest income 3,987 1,147 5,134 2,407 7,541 26,337 33,878
------------- ------------- ------------ ----------- ------------- ------------ -------------
Total Interest Income 442,514 30,390 472,904 107,100 580,004 1,350,698 1,930,702
------------- ------------- ------------ ----------- ------------- ------------ -------------
Interest on deposits 173,521 14,870 188,391 40,248 228,639 531,216 759,855
Interest on borrowings 27,045 - 27,045 11,693 38,738 358,187 396,925
------------- ------------- ------------ ----------- ------------- ----------- -------------
Total Interest Expense 200,566 14,870 215,436 51,941 267,377 889,403 1,156,780
------------- ------------- ------------ ----------- ------------- ------------ -------------
Net Interest Income before
Provision for loan losses 241,948 15,520 257,468 55,159 312,627 461,295 773,922
Provision for loan loss 17,140 1,805 18,945 10,115 29,060 41,000 70,060
------------- ------------- ------------ ----------- ------------- ------------ -------------
Net Interest Income after
Provision for loan losses 224,808 13,715 238,523 45,044 283,567 420,295 703,862
Noninterest income 40,257 3,246 43,503 10,496 53,999 85,978 139,977
Noninterest expense 204,679 10,357 215,036 46,222 261,258 352,033 613,291
------------- ------------- ------------ ----------- ------------- ------------ -------------
Income before income taxes 60,386 6,604 66,990 9,318 76,308 154,240 230,548
Income tax provision 23,490 1,276 24,766 4,238 29,004 49,984 78,988
------------ ------------- ------------ ----------- ------------ ------------ -------------
Net Income $ 36,896 $ 5,328 $ 42,224 $ 5,080 $ 47,304 $ 104,256 $ 151,560
============= ============= ============ =========== ============= ============ =============
Net Income Per Share:
Basic $ .85 $ 4.77 $ 0.94 $ 0.56 $ 0.89 $ 1.00 $ 1.33
Diluted $ .82 $ 4.67 $ 0.91 $ 0.53 $ 0.85 $ 0.96 $ 1.27
Weighted Average Common
Shares:
(in thousands)
Basic 42,402 1,118 43,840 8,775 52,176 103,742 112,865
Diluted 44,990 1,141 46,428 9,247 55,213 109,097 119,035
</TABLE>
See notes to pro forma financial information.
<PAGE>
Notes to Pro Forma Financial Information
(1) The pro forma information assumes the mergers were consummated as of
June 30, 1999 for the pro forma unaudited combined condensed balance
sheet and as of the beginning of each of the periods indicated for the
pro forma unaudited combined condensed statements of income. The pro
forma information presented is not necessarily indicative of the
results of operations or the combined financial position that would
have resulted had the mergers been consummated at the beginning of the
periods indicated, nor is it necessarily indicative of the results of
operations in future periods or the future financial position of the
combined entities.
(2) It is assumed that the merger with Southern Jersey will be accounted
for on a pooling-of-interests basis, and accordingly, the related pro
forma adjustments herein reflect, where applicable, an exchange ratio
of 1.26 shares of Hudson United common stock for each of the 1,128,081
shares of Southern Jersey common stock which were outstanding at June
30, 1999.
Following consummation of the merger, it is anticipated that Hudson
United will sell substantially all of the nonperforming assets and
certain other identified loans of Southern Jersey aggregating
approximately $55 million and take a related charge of up to $25
million to write these assets down to their estimated realizable value
based upon an accelerated sale process. Anticipated cost savings net of
expected merger-related expense and restructuring charges are not
expected to be material and therefore the pro forma financial
information does not give effect to these items.
The pro forma financial information was adjusted for the Southern
Jersey merger by the (i) addition of 1,421,382 shares of Hudson United
common stock with a stated value of $1.778 per share amounting to
$2,527,217; (ii) elimination of 1,307,683 shares of Southern Jersey
common stock with a stated value of $1.67 per share amounting to
$2,183,831; (iii) addition of 22,620 shares of Hudson United common
stock amounting to $40,218 in exchange for Southern Jersey's stock
options; (iv) elimination of 179,602 shares of Southern Jersey common
stock held in Southern Jersey's treasury at a cost of $3,823,801.
(3) It is assumed that the merger with JeffBanks will be accounted for on a
pooling-of-interests basis, and accordingly, the related pro forma
adjustments herein reflect, where applicable, an exchange ratio of 0.95
shares of Hudson United common stock for each of the 10,583,209 shares
of JeffBanks common stock which were outstanding at June 30, 1999.
Anticipated cost savings net of expected merger-related expense and
restructuring charges are not expected to be material and therefore the
pro forma financial information does not give effect to these items.
The pro forma financial information was adjusted for the JeffBanks
merger by the (i) addition of 10,054,049 shares of Hudson United common
stock with a stated value of $1.778 per share amounting to $17,876,099;
(ii) elimination of 10,583,209 shares of JeffBanks common stock with a
par value of $1.00 per share amounting to $10,583,209.
(4) It is assumed that the merger with Dime will be accounted for on a
pooling-of-interests basis, and accordingly, the related pro forma
adjustments herein reflect, where applicable, an exchange ratio of
0.585 shares of Dime United common stock for each of the 113,539,009
shares of Dime common stock which were outstanding at June 30, 1999.
Anticipated cost savings approximate $78 million and are expected to be
75% phased-in within the first twelve months of closing. Merger-related
expense and restructuring charges are anticipated to be approximately
$136 million pre-tax, $94 million after tax, comprised of systems,
employee, occupancy, professional and other costs and are presented
only in the pro forma unaudited combined condensed balance sheet.
The pro forma financial information was adjusted for the Dime merger by
the (i) issuance of 117,450,270 shares of the new Dime United common
stock with a par value of $.01 per share amounting to $1,174,503; (ii)
elimination of 51,029,949 shares of Hudson United common stock with a
stated value of $1.778 per share amounting to $90,731,249; (iii)
elimination of 113,539,009 shares of Dime common stock with a par value
of $.01 per share amounting to $1,135,390; (iv) elimination of
1,101,306 shares of Hudson United common stock held in Hudson United's
treasury at a cost of $36,504,000 with a stated value of $1.778 per
share amounting to $1,958,122; (v) elimination of 6,713,450 shares of
Dime common stock held in Dime's treasury at a cost of $180,480,069
with a par value of $.01 amounting to $67,135.
(5) Earnings per share data has been computed based on the combined
historical income before extraordinary items applicable to common
shareholders or net income applicable to common shareholders of Dime
United using historical weighted average shares outstanding for the
given period and the common stock assumed to be issued in connection
with the mergers.
(6) The pro forma information presented above does not reflect Hudson
United's pending acquisition of loans and deposits from Advest Bank or
its pending acquisition of the assets of Lyon Credit Corporation. We
have determined that the Advest and Lyon Credit acquisitions do not
present significant acquisitions in the context of the pro forma
financial information. For information about Lyon Credit, see "Recent
Developments Concerning Hudson United" on page 14 of this supplement.
For information about Advest, see "Recent Developments" on pages 20-22
of the proxy statement-prospectus. The pro forma combined information
does not include the effect of Dime's pending acquisition of 28
branches of Key Bank, N.A. In addition, the pro forma combined
information as of June 30, 1999 does not include Dime's acquisition of
Citibank's auto financing unit, which was consummated after June 30,
1999. Information regarding the acquisitions of certain assets and
liabilities of Key Bank and Citibank have not been included because
these acquisitions do not present significant acquisitions in the
context of the pro forma financial information and because separate
financial statements for such assets and liabilities are not prepared
by the companies from which such assets and liabilities were acquired
or are to be acquired.
<PAGE>
INFORMATION ABOUT THE RECONVENED MEETING
Date, Time and Place
The special meeting of Southern Jersey shareholders, originally
scheduled for September 16, 1999, was adjourned on that date without any
business being conducted at the meeting before adjournment. The Board of
Directors of Southern Jersey has determined to reconvene the adjourned meeting
at the following date, time and place:
10:00 a.m.
November 15, 1999
164 West Broad Street
Bridgeton, New Jersey 08302
No Change in Record Date
The Southern Jersey Board of Directors originally fixed the close of
business on July 31, 1999 as the record date for the meeting. This record date
has not been changed. Only holders of record of Southern Jersey common stock at
that time are entitled to get notice of the meeting and to vote at the meeting.
On the record date, there were 1,128,081 shares of Southern Jersey common stock
outstanding. Each of those shares will be entitled to one vote on each matter
properly submitted to the meeting.
Required Vote
The Hudson United - Southern Jersey merger cannot be completed without
Southern Jersey shareholder approval. The affirmative vote of a majority of the
outstanding shares of Southern Jersey entitled to vote is required to approve
the merger agreement. A failure to return the proxy card or to vote in person at
the meeting will have the same effect as a vote against the merger. Abstentions
and broker non-votes will also have the same effect as votes against the merger.
New Proxy Cards
Because of the significance of the proposed Hudson United - Dime
merger, Hudson United and Southern Jersey determined that proxies voted prior to
distribution of this supplement should not be accepted and all new proxies
should be solicited. The white proxy cards enclosed with the proxy
statement-prospectus dated August 13, 1999 will not be accepted at the special
meeting. Accordingly, your shares will be voted at the meeting only if you sign
and return the enclosed green proxy card or vote personally at the meeting. We
urge you to execute, date and return the enclosed green proxy card in the
enclosed postage-paid envelope as soon as possible to ensure that your shares
will be voted at the reconvened special meeting. You should not send in
certificates for your Southern Jersey shares at this time.
OTHER MATTERS
As of the date of this supplement, the Southern Jersey Board of
Directors knows of no other matters to be presented for action by the
shareholders at the meeting. If any other matters are properly presented,
however, it is the intention of the persons named in the enclosed proxy to vote
in accordance with their best judgment on such matters.
EXPERTS
The consolidated financial statements of Hudson United as of December
31, 1998 and 1997 and for each of the years in the three-year period ended
December 31, 1998 have been incorporated by reference in this
proxy-statement-prospectus and this supplement and have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their reports with
respect thereto, and are included herein in reliance upon the authority of said
firm as experts in accounting and auditing in giving said reports.
The consolidated financial statements of JeffBanks as of December 31,
1998 and 1997 and for each of the three years in the period ended December 31,
1998, included as exhibit 99.4 to Hudson United's Current Report on Form 8-K
filed October 5, 1999, and thereby incorporated by reference in the proxy
statement-prospectus and this supplement, have been audited by Grant Thornton
LLP, independent certified public accountants, whose report thereon appears
therein, and in reliance upon such report of Grant Thornton given upon the
authority of such firm as experts in accounting and auditing.
The consolidated financial statements of Southern Jersey as of December
31, 1998 and 1997 and for each of the years in the three-year period ended
December 31, 1998, included as exhibit 99.7 to Hudson United's Current Report on
Form 8-K filed October 5, 1999, and thereby incorporated by reference in the
proxy statement-prospectus, this supplement and elsewhere in the registration
statement, have been audited by Athey & Company, independent public accountants,
and Belfint, Lyons & Shuman, P.A., as indicated in their reports with respect
thereto, and are included in the proxy statement-prospectus, this supplement and
the registration statement in reliance upon the authority of such firms as
experts in accounting and auditing in giving said reports.
The consolidated financial statements of Dime and its subsidiaries as
of December 31, 1998 and 1997, and for each of the years in the three-year
period ended December 31, 1998, included in Dime's 1998 Annual Report on Form
10-K and reproduced as exhibit 99.1 to Hudson United's Current Report on Form
8-K filed October 5, 1999 have been incorporated by reference herein and in the
registration statement and this supplement in reliance upon the report of KPMG
LLP, independent certified public accountants, included in Dime's 1998 Annual
Report on Form 10-K and incorporated by reference herein, and upon the authority
of said firm as experts in accounting and auditing.
<PAGE>
APPENDIX A
FIRST CAPITAL GROUP, L.L.C.
INVESTMENT BANKERS & FINANCIAL ADVISORS
October 13, 1999
Board of Directors
Southern Jersey Bancorp of Delaware, Inc.
53 South Laurel Street
Bridgeton, New Jersey 08302
Members of the Board:
You have requested an update to our opinion dated July 8, 1999, and updated as
of the date of the Proxy Statement Prospectus, as to the fairness, from a
financial point of view, to the holders of the outstanding shares of common
stock of Southern Jersey Bancorp of Delaware, Inc. ("Southern Jersey"), of the
consideration (the "Merger Consideration") to be received by such holders
pursuant to the Agreement and Plan of Merger dated as of June 28, 1999 (the
"Merger Agreement"), incorporated by reference therein, which provides for the
merger (the "Merger") of Southern Jersey with and into Hudson United Bancorp,
Inc. ("Hudson United") (the "Southern Jersey Merger"). Pursuant to Section 2.1
of the Merger Agreement, subject to certain conditions, each shareholder of the
outstanding common stock of Southern Jersey (the "Southern Jersey Common Stock")
has a right to receive 1.26 shares of the common stock of Hudson United (the
"Hudson United Common Stock") for each share of Southern Jersey Common Stock
tendered (the "Merger Consideration"). The terms and guidelines of the
transaction are more fully set forth in the Merger Agreement.
In addition to the above-referenced Southern Jersey Merger, Hudson United has
entered into two separate definitive agreements whereby (i) JeffBanks, Inc.
would be merged with and into Hudson United and Jefferson Bank and Jefferson
Bank of New Jersey would be merged with and into Hudson United Bank (the
"JeffBanks Merger") and (ii) Hudson United would enter into a "Merger of Equals"
transaction with Dime Bancorp, Inc. (the "Dime Merger"). The parties to the
respective mergers currently contemplate that upon completion of the Southern
Jersey Merger and the JeffBanks Merger, subject to certain conditions set forth
in the Dime Merger Agreement, that Hudson United would be merged with and into
Dime, with Dime becoming a bank holding company operating under the name Dime
United Bancorp, Inc. and Dime's subsidiary thrift institution would merge with
and into Hudson United Bank and operate thereafter under the name DimeBank. Upon
completion of the Dime Merger, each share of Hudson United Common Stock would be
converted into one share of Dime United Common Stock and each share of Dime
Common Stock would be combined into 0.585 shares of Dime United Common Stock.
In connection with our updated opinion, as a supplement to (but not in place of)
our original analysis, First Capital reviewed or in some cases further reviewed
(i) the publicly available consolidated financial statements of Dime for recent
years and interim periods to date; (ii) certain other relevant financial and
operating data of Dime and Hudson United, respectively, made available to us
from published sources and the internal records of Hudson United; (iii) recent
publicly available filings of Hudson United filed with respect to the proposed
Hudson United - Dime merger, including copies of the Agreement and Plan of
Merger between Hudson United and Dime dated September 15, 1999; Stock Option
Agreement between Dime and Hudson United dated September 16, 1999; Stock Option
Agreement between Hudson United and Dime dated September 16, 1999; certain press
releases; and the Investor Presentation Materials dated September 1999; (iv) the
publicly available consolidated financial statements of JeffBanks for recent
years and interim periods to date; (v) certain other relevant financial and
operating data of JeffBanks made available to us from published sources and the
internal records of Hudson United; (vi) recent publicly available filings of
Hudson United filed with respect to the proposed Hudson United - JeffBanks
merger, including copies of the Agreement and Plan of Merger between Hudson
United and JeffBanks dated June 28, 1999; Stock Option Agreement between Hudson
United and JeffBanks dated June 28, 1999; and certain press releases; (vii)
recent publicly available consolidated financial statements of Southern Jersey;
(viii) certain published bank stock indexes and reported prices and trading
activity for the common shares of Hudson United, Dime, JeffBanks and Southern
Jersey; (ix) certain analyst reports; (x) recent developments of Hudson United
and Southern Jersey; (xi) certain pro forma financial information reflecting the
combination of Hudson United, Dime, JeffBanks and Southern Jersey; and (xii)
such other information as First Capital deemed appropriate. In addition to
reviewing this material, First Capital discussed with certain members of
management of Hudson United and Southern Jersey, respectively, the business,
financial condition and prospects of Hudson United and Southern Jersey and
performed such other analyses and examinations and considered such other
information, financial studies, analysis and investigations and financial,
economic and market data as First Capital deemed appropriate.
We have assumed and relied upon, without independent verification, the accuracy
and completeness of the information reviewed by us for the purposes of this
opinion. We have not made an independent evaluation of the assets or liabilities
of Southern Jersey, nor have we been furnished with any such appraisals. With
respect to financial forecasts, we have assumed that they have been reasonably
prepared and reflect the best currently available estimates and judgments or
management of Southern Jersey as to the future financial performance of Southern
Jersey. We have assumed such forecasts and projections will be realized in the
amounts and at the times contemplated thereby. With respect to Hudson United, we
relied upon publicly available data and also on our discussions with management
of Hudson United regarding Hudson United's financial condition, performance and
prospects. With respect to Dime and JeffBanks, we relied solely upon publicly
available data and did not conduct discussions with management of Dime or
JeffBanks regarding Dime's or JeffBanks respective financial condition,
performance and prospects. We did not conduct any independent evaluation or
appraisal of the assets, liabilities or business prospects of Hudson United,
Dime or JeffBanks, we were not furnished with any evaluations or appraisals, and
we did not review any individual credit files of Hudson United, Dime or
JeffBanks. We are not experts in the evaluation of loan portfolios for the
purpose of assessing the adequacy of the allowance for losses with respect
thereto and have assumed that such allowances for each of the companies are in
the aggregate, adequate to cover such losses.
Our opinion is necessarily based on economic, market and other conditions as in
effect on, and the information made available to us as of, the date hereof.
Events occurring after the date hereof could materially affect the assumptions
used in preparing this opinion. Our opinion is also meant to serve as an update
to the opinion dated July 8, 1999, a copy of which is contained in the proxy
statement prospectus, and as such should be read in conjunction with the opinion
dated July 8, 1999.
Our opinion is limited to the fairness, from a financial point of view, to the
holders of Southern Jersey Common Stock of the Merger Consideration to be
received by the holders of the Southern Jersey Common Stock as stated in the
Merger Agreement and does not address Southern Jersey's underlying business
decision to undertake the Southern Jersey Merger. Moreover, this letter, and the
opinion expressed herein, does not constitute a recommendation to any
shareholder as to any approval of the Southern Jersey Merger or the Merger
Agreement. It is understood that this letter is for the information of the Board
of Directors of Southern Jersey and may not be used for any other purpose
without our prior written consent, except that this opinion may be included in
its entirety in any filing made by Southern Jersey with the Securities and
Exchange Commission with respect to the Merger.
Based on the foregoing and such other matters we have deemed relevant, we are of
the opinion, as of the date hereof, that the Merger Consideration is fair, from
a financial point of view, to the holders of Southern Jersey Common Stock. We
express no opinion, however, as to the adequacy of any consideration
subsequently received in the proposed Dime Merger by a Southern Jersey
Shareholder who through the effect of the Southern Jersey Merger subsequently
becomes a Hudson United Shareholder.
Respectfully submitted,
FIRST CAPITAL GROUP, L.L.C.
