EXHIBIT 99.1
[TD Banknorth Inc. Logo]
News Release
Media Contact:
TD Banknorth Inc.
Jeffrey Nathanson
(207) 761-8517
jeffrey.nathanson@tdbanknorth.com
FOR IMMEDIATE RELEASE
January 10, 2006
TD BANKNORTH ANNOUNCES BALANCE SHEET RESTRUCTURING PROGRAM,
PRELIMINARY FOURTH QUARTER EARNINGS AND SHARE REPURCHASE PLAN
PORTLAND, Maine-January 10, 2006-TD Banknorth Inc. (NYSE:BNK) announced today
that its board of directors has approved a balance sheet restructuring program
which is to be implemented in connection with its pending acquisition of
Hudson United Bancorp. The program consists of the sale of approximately $2.6
billion of mortgage-backed securities with the proceeds to be reinvested in
shorter duration assets. The asset sales will reduce the earnings volatility
inherent in these interest-earning assets as a result of prepayments and call
features. TD Banknorth will incur a pre-tax loss of approximately $45 million
($29.3 million on an after-tax basis) in connection with this balance sheet
restructuring. In light of the decision to sell these investment securities,
the securities will be reflected as impaired at December 31, 2005 and the
related loss will be recorded in TD Banknorth's results in the fourth quarter
of 2005.
It is anticipated that an additional approximately $2.7 billion of investment
securities to be acquired from Hudson United will be sold soon after completion
of the acquisition with the proceeds used to repay an equal amount of
borrowings.
The Company anticipates that these actions will not have a material impact on
earnings per share on a going-forward basis. "In the current interest rate
environment, these actions will mitigate our interest rate risk going forward,"
said William J. Ryan, TD Banknorth Chairman, President and Chief Executive
Officer.
TD Banknorth also announced that exclusive of the effects of the balance sheet
restructuring, merger and consolidation costs, and the amortization of
identifiable intangible assets, its diluted earnings per share for the fourth
quarter of 2005 will be $0.62, or two cents less than the current
Thomson First Call consensus analysts' estimate (on a GAAP basis, diluted
earnings per share for the fourth quarter of 2005 will be $0.32). The primary
reason for this is the pressure on net interest margin currently being
experienced by TD Banknorth, like many other financial institutions. TD
Banknorth's net interest margin, on a fully taxable-equivalent basis, decreased
from 4.09% during the third quarter of 2005 to 3.96% during the fourth quarter
of 2005. Details concerning the Company's earnings for the quarter and
year ended December 31, 2005 will be released by the Company on January 23,
2006, as previously announced.
Finally, TD Banknorth announced that its board of directors has approved its
planned repurchase of up to 8.5 million shares of its common stock in the open
market in connection with the acquisition of Hudson United. It is anticipated
that share repurchases will commence on or about the acquisition date and
occur at such times and at such prices as management deems appropriate. The
acquisition of Hudson United is subject to the receipt of the approval of the
shareholders of Hudson United and TD Banknorth, which will consider the
transaction at meetings to be held on January 11, 2006, as well as the receipt
of all required regulatory approvals and is expected to close later in the
first quarter of 2006.
About TD Banknorth Inc.
TD Banknorth Inc. is a leading banking and financial services company
headquartered in Portland, Maine and a majority-owned subsidiary of TD Bank
Financial Group. At September 30, 2005, TD Banknorth had $31.8 billion of
total consolidated assets and provided financial services to over 1.3 million
households in the Northeast. TD Banknorth's banking subsidiary, TD Banknorth,
N.A., operates banking divisions in Maine, New Hampshire, Massachusetts,
Connecticut, Vermont and upstate New York. TD Banknorth and TD Banknorth, N.A.
also operate subsidiaries and divisions in insurance, wealth management,
merchant services, mortgage banking, government banking and other financial
services and offer investment products in association with PrimeVest Financial
Services, Inc. The TD Banknorth common stock trades on the New York Stock
Exchange under the symbol "BNK". For more information, visit
http://www.tdbanknorth.com.
Additional Information
These materials contain certain forward-looking statements with respect to the
financial condition, results of operations and business of TD Banknorth and TD
Banknorth's acquisition of Hudson United Bancorp. Words such as "expect",
"feel", "believe", "will", "may", "anticipate", "plan", "estimate", "intend",
"should" and similar expressions are intended to identify forward-looking
statements. Forward-looking statements are subject to various factors which
could cause actual results to differ materially from these estimates. These
factors include, but are not limited, to, changes in general economic
conditions, interest rates, deposit flows, loan demand, competition,
legislation or regulation and accounting principles, policies or guidelines,
as well as other economic, competitive, governmental, regulatory and
accounting and technological factors affecting TD Banknorth's operations.
In addition, acquisitions may result in large one-time charges to income, may
not produce revenue enhancements or cost savings at levels or within time
frames originally anticipated and may result in unforeseen integration
difficulties. Investors are encouraged to access TD Banknorth's periodic
reports filed with the Securities and Exchange Commission for financial and
business information regarding TD Banknorth, including information which could
affect TD Banknorth's forward-looking statements. TD Banknorth does not
undertake any obligation to update these forward-looking statements to reflect
events or circumstances that occur after the date on which such statements
were made.
These materials may be deemed to be solicitation material in respect of the
proposed merger of TD Banknorth and Hudson United Bancorp. In connection with
the proposed transaction, a registration statement on Form S-4 has been filed
with the SEC. Shareholders of TD Banknorth and shareholders
of Hudson United are encouraged to read the registration statement and any
other relevant documents filed with the SEC, including the joint proxy
statement/prospectus that is a part of the registration statement, because
they contain important information about the proposed merger. The final joint
proxy statement/prospectus was mailed to shareholders of TD Banknorth and
shareholders of Hudson United. Investors and security holders are able to
obtain the documents free of charge at the SEC's website, www.sec.gov, from
TD Banknorth, Two Portland Square, P.O. Box 9540, Portland, Maine 04112-9540,
Attention: Investor Relations, or from Hudson United, 1000 MacArthur Boulevard,
Mahwah, New Jersey 07430, Attention: Investor Relations.
TD Banknorth, Hudson United Bancorp and their respective directors and
executive officers and other members of management and employees may be deemed
to participate in the solicitation of proxies in respect of the proposed
transactions. Information regarding TD Banknorth's directors and executive
officers is available in TD Banknorth's proxy statement for its 2005 annual
meeting of shareholders, which was filed with the SEC on April 20, 2005, and
information regarding Hudson United's directors and executive officers is
available in Hudson United's proxy statement for its 2005 annual meeting of
shareholders, which was filed with the SEC on March 23, 2005. Additional
information regarding the interests of such potential participants are
included in the joint proxy statement/prospectus and the other relevant
documents filed with the SEC when they become available.
CONTACT: TD Banknorth Inc.
Jeffrey Nathanson, 207-761-8517
SOURCE: TD Banknorth Inc.
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