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EXHIBIT 20.1
[POUGHKEEPSIE FINANCIAL CORP. NEWS RELEASE LETTERHEAD]
Joseph B. Tockarshewsky Robert J. Hughes
Chairman, President & Executive Vice President
Chief Executive Officer & Chief Financial Officer
(914) 431-6211 (914) 431-6386
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Poughkeepsie Financial Corp. and HUBCO, Inc.
Sign a Definitive Agreement
Poughkeepsie, NY, October 23, 1997. -- Poughkeepsie Financial Corp.
(NASDAQ: PKPS) and HUBCO, Inc. (NASDAQ: HUBC) today announced the signing of a
definitive merger agreement. Under the terms of the agreement each share of
Poughkeepsie Financial Common Stock will be exchanged for .30 shares of HUBCO
Common Stock, as long as the median closing price for HUBCO Common Stock during
a pre-closing period is at or above $33.33. Based upon HUBCO's October 22,
1997 closing price of $35.375 for HUBCO Common Stock, .30 shares of HUBCO
Common Stock would have a value of $10.61. This $10.61 value equates to $136
million, or 184% of Poughkeepsie Financial's book value, and 30 times
Poughkeepsie Financial's annualized six months' earnings, and represents a
deposit premium of 10.25%. If the median HUBCO price during the pre-closing
period is below $33.33 but above $31.25, each share of Poughkeepsie Financial
Common Stock would be exchanged for shares of HUBCO Common Stock with value of
$10.00. If HUBCO's median pre-closing price is $31.25 or below, a maximum
exchange ratio of .32 would apply. In addition, the agreement provides that
Poughkeepsie Financial will be able to increase its quarterly cash dividends to
an amount substantially equivalent to HUBCO's cash dividend as adjusted for the
exchange ratio.
In connection with the execution of the merger agreement,
Poughkeepsie Financial has issued an option to HUBCO which, under certain
defined circumstances, would enable HUBCO to purchase up to 2,000,000 shares of
Poughkeepsie Financial Common Stock. The transaction, which is expected to
close in the first quarter of 1998, is expected to be treated as a tax free
exchange to holders of Poughkeepsie Financial stock and be accounted for as a
pooling of interests.
This will be HUBCO's twentieth acquisition in seven years and
represents HUBCO's first entry into New York State. Poughkeepsie Financial has
offices in Rockland, Orange and
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Dutchess Counties of New York. Rockland County is contiguous to Bergen County,
New Jersey where HUBCO's headquarters is located.
"This merger expands HUBCO's market into New York State and is
another step in developing a chain of competitive community banking
institutions which provide local services to their customers and communities
while achieving efficiencies through technology, centralized processing and
strong incentive programs," stated Kenneth T. Neilson, HUBCO's Chairman,
President and Chief Executive Officer.
Joseph B. Tockarshewsky, Chairman, President and Chief Executive
Officer of Poughkeepsie Financial, stated, "The directors and management are
proud of the value that this merger creates for our stockholders. The
resources and strength of HUBCO will provide Bank of the Hudson with the
ability to continue its longstanding commitment of excellence in products and
service to the communities of the Hudson Valley."
Poughkeepsie Financial Corp. is the holding company for Bank of
the Hudson, an $880 million asset institution headquartered in Poughkeepsie,
New York, formerly known as Poughkeepsie Savings Bank, FSB. The Bank
celebrated its 165th anniversary last year. It operates fifteen branches in
three counties of New York. The Bank of the Hudson name will be maintained by
HUBCO as its New York subsidiary, and Joseph B. Tockarshewsky will remain the
Chairman and CEO of Bank of the Hudson.
Consummation of the merger is subject to approval by bank
regulatory authorities and the shareholders of Poughkeepsie Financial Corp., as
well as other customary conditions.
HUBCO, Inc. is a $3 billion bank holding company which currently
owns commercial banks in New Jersey and Connecticut. HUBCO's principal
subsidiaries are Hudson United Bank, a $1.7 billion asset institution with 57
banking offices in New Jersey and Lafayette American Bank, a $1.3 billion asset
institution with 27 banking offices in Connecticut. Acquisitions of The Bank
of Southington in Connecticut and Security National Bank in New Jersey are in
process and are anticipated to close this quarter. HUBCO, Inc. offers a full
array of innovative products and services for the retail and commercial market
including imaged checking accounts, 24 hour telephone banking, loans by phone,
international services, alternative investments, insurance products, trust
services and a wide variety of deposit and loan products.
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