Hudson United Bancorp Announces Preliminary Fourth Quarter 2000 Earnings
NEW YORK--(BUSINESS WIRE)--Jan. 4, 2001--Hudson United Bancorp (NYSE:HU) announced today that it expects operating earnings for the fourth quarter of 2000 to be in line with the estimate provided by the Company (.45(cent) after adjusting for the November 20, 2000 10% stock dividend) on October 5, 2000 and October 19, 2000. Hudson United also stated that it expects its earnings for 2001 to be in line with the consensus estimate of $2.00 (after adjusting for the stock dividend).
In preparing its year end analysis, the Company has determined that certain matters arising from the terminated Dime merger of equals and the resulting delay in the integration of JeffBanks and Southern Jersey Bancorp following their mergers, as well as the operational issues arising from the conversion to a new outsource provider last year will require a charge in addition to amounts previously recorded. The Company will incur a charge in the amount of approximately $22 million pre-tax, or approximately .29 cents per share after tax, in the fourth quarter which includes what Hudson believes are all of the remaining obligations and expenses arising from the above transactions, as well as planned branch consolidations. Fourth quarter earnings after this charge are expected to be approximately .16 cents per share.
The attached schedule indicates that the actual charges for JeffBanks and Southern Jersey Bancorp exceeded the Company's original estimate by $6.2 million, due primarily to the delayed closings and interruption to normal operations created by the Dime transaction. The minimum Dime termination fee will cover 76% of the non-recurring expenses arising from that terminated merger.
This fourth quarter charge includes the approximate amounts of $4.8 million for the recognition of severance benefits and consulting agreements, $2 million for stay pay obligations to current employees, $2 million for payments and reserves for the settlements of pre-existing litigation at acquired institutions, $5.5 million for the recognition of obligations for which the bank will not receive future benefits, $3.7 million related to the change to a new outsource provider, and $2 million for planned branch consolidations. The balance of the expenses are comprised of building write-downs and miscellaneous expenses including search fees, advisor expenses, and other miscellaneous items.
Kenneth T. Neilson, President and CEO of Hudson, stated, "I believe our plans and progress for resuming our historical revenue growth are well underway and this non-recurring charge has the benefit that investors will be able to more clearly see our operating results. Substantially all senior management positions in our organization have now been filled and we are poised to capitalize on the opportunities created by mergers in our marketplace."
Hudson United Bancorp previously announced a stock buy-back program with an authorization to purchase up to 10 million shares and purchased approximately 4.9 million shares during the fourth quarter.
As of December 31, 2000, the Company's capital ratios continue to qualify it as a well capitalized institution.
From a credit quality standpoint, Hudson expects to report relative stability in its non-performing assets in the fourth quarter and anticipates improvement in 2001. The Company has only one syndicated credit in its loan portfolio in the amount of $5 million (acquired through an acquisition in 1999) which is currently performing and the Company has no exposure to automobile lease residuals.
This release contains forward-looking |
