Mahwah, N.J.-based Hudson United Bank, whose headquarters are shown above, has been acquired by Portland, Maine-based TD Banknorth for $1.9 billion. TD Banknorth will be expanding into southern Connecticut and other states as a result.
The arena that houses Boston’s Celtics and Bruins now bears its name, and soon its moniker will be better known to even those who support New York’s Knicks and Rangers. TD Banknorth – the company that took over naming rights from Fleet Bank and gave Boston the TD Banknorth Garden – is expanding into southern Connecticut, New York state, New Jersey and Pennsylvania with its acquisition of Mahwah, N.J.-based Hudson United Bank.
The $1.9 billion acquisition adds 42 branches to Portland, Maine-based TD Banknorth’s Connecticut portfolio – 19 of those in tony Fairfield County, a sought-after banking market. Hudson United, which has $8.8 billion in assets, has a total of 204 branches across several states.
“The advantage of now being a statewide bank and of branches in Fairfield County – one of the richest counties in America – is obvious as we go forth,” said TD Banknorth Chief Executive Officer, President and Chairman William J. Ryan in a conference call about the acquisition.
The acquisition had a couple of major perks for TD Bank-north.
“It was a kiss on both cheeks to TD Banknorth,” said John Carusone, president of the Hartford-based Bank Analysis Center.
The acquisition both extends the bank’s reach across the East Coast and solidifies its presence in Connecticut, Carusone explained.
“[TD Banknorth] never really had a statewide reach before,” he said.
‘A Poke in the Eye’
The acquisition fulfills some promises of TD Banknorth’s, according to Ryan. He has said in past that the bank hoped to expand and head south into metropolitan New York, so the acquisition of Hudson United Bank was a perfect opportunity.
“This acquisition is consistent with our growth strategy and will significantly expand our franchise in both Connecticut and eastern New York while providing us with a presence in the fast-growing markets of New Jersey and Philadelphia,” Ryan said in a prepared statement. “We look forward to welcoming Hudson United into the TD Banknorth family and to offering Hudson United’s customers a broader array of products and services.”
If the bank had tried to fulfill its goal through de novo branches, it would have taken a very long time, Ryan said during the conference call.
“That gives us a market presence that increases from No. 8 in Connecticut to No. 6,” he said.
The acquisition increases TD Bank-north’s assets in Connecticut by $1.6 billion to about $4 billion, increases its market share to 5.12 percent and will bring its total number of branches to 86. On a pro forma basis, the transaction will create a regional financial services company with 590 branches, 751 ATMs and more than $26 billion in deposits across eight Northeastern states, according to TD Banknorth.
Because the acquisition will create a bank with a strong reach across the entire state, it will create more competition for Connecticut’s regional banks than it will for its community banks, Carusone said.
“It’s more of a poke in the eye for Webster and People’s,” he said.
Hudson United was the fifth-largest bank in Connecticut, but had been losing market share in the state for awhile, Carusone said. The bank was getting itself ready to be sold for some time – a move that was probably smart, especially in Connecticut, he said.
“They have been powdering their nose and preening themselves as a potential [acquisition] for some time,” he said.
Hudson United Bank’s chairman is happy to be joining TD Banknorth, he said.
“We are excited about joining TD Bank-north,” said Kenneth Neilson, Hudson United’s chairman, president and chief executive officer, in a prepared statement. “This transaction rewards our shareholders while maintaining our focus on local community banking.”
The acquisition was especially smart for TD Banknorth, which had been trying to establish its competitive effectiveness in Connecticut for a while, and will position them well in Fairfield County, Carusone said.
The bank anticipates that the transaction will be accredited to TD Banknorth by about 6 cents in 2007, the first full year of combined operations between the two companies. In 2006, it is anticipated that the transaction will be slightly dilutive to TD Banknorth’s GAAP EPS (generally accepted accounting principles-earnings per share) by approximately 1 cent.
Under the terms of the definitive agreement, two Hudson United directors will be added to the TD Banknorth board of directors.
“We are pleased to support Bill Ryan and his team in this strategic acquisition,” said Ed Clark, president and chief executive officer of TD Bank Financial Group, in a prepared statement. “This transaction delivers on our shared vision for growth and marks a significant milestone in TD Bank-north’s expansion strategy.”
