-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MtRhYG/L0iG1HQ/8QXhXs4RX4FAWzaVoOB66NjfvEMiPB26DRkgWo+SA/drwRr6x +IMwEMGBclrIY8b9+K4mDQ== /in/edgar/work/20000802/0000927089-00-000242/0000927089-00-000242.txt : 20000921 0000927089-00-000242.hdr.sgml : 20000921 ACCESSION NUMBER: 0000927089-00-000242 CONFORMED SUBMISSION TYPE: 425 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20000802 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: COHOES BANCORP INC CENTRAL INDEX KEY: 0001070321 STANDARD INDUSTRIAL CLASSIFICATION: [6036 ] IRS NUMBER: 141807865 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 425 SEC ACT: SEC FILE NUMBER: 000-25027 FILM NUMBER: 684685 BUSINESS ADDRESS: STREET 1: 75 REMSEN STREET CITY: COHOES STATE: NY ZIP: 12047 BUSINESS PHONE: 5182336500 MAIL ADDRESS: STREET 1: 75 REMSEN STREET CITY: COHOES STATE: NY ZIP: 12047 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: HUDSON RIVER BANCORP INC CENTRAL INDEX KEY: 0001057007 STANDARD INDUSTRIAL CLASSIFICATION: [6036 ] IRS NUMBER: 141803212 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 425 BUSINESS ADDRESS: STREET 1: ONE HUDSON CITY CENTRE CITY: HUDSON STATE: NY ZIP: 12534 BUSINESS PHONE: 5188284600 MAIL ADDRESS: STREET 1: ONE HUDSON CITY CENTRE CITY: HUDSON STATE: NY ZIP: 12534 425 1 0001.txt RULE 425 FILING ================================================================================ HUDSON RIVER BANCORP, INC. & COHOES BANCORP, INC. Updated Synopsis of Merger August 2000 ================================================================================ These investment materials may contain forward- looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risk and uncertainty. It should be noted that a variety of factors could cause the combined company's actual results and experience to differ materially from the anticipated results or expectations expressed in the combined company's forward-looking statements. The risks and uncertainties that may affect the operations, performance, development, growth projections and results of the combined company's business include, but are not limited to, the growth of the economy, interest rate movements, timely development by the combined company of technology enhancements for its products and operating systems, the impact of competitive products, services and pricing, customer based requirements, Congressional legislation, acquisition cost savings and revenue enhancements and similar matters. Readers of this report are cautioned not to place undue reliance on forward-looking statements which are subject to influence by the named risk factors and unanticipated future events. Actual results, accordingly, may differ materially from management expectations. Cohoes and Hudson River do not undertake, and specifically disclaim, any obligation to publicly release the results of any revisions which may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. Hudson River has filed a Registration Statement on Form S-4 concerning the merger with the United States Securities and Exchange Commission which includes the joint merger proxy statement/prospectus being provided to shareholders. In addition, Hudson River and Cohoes each intend to file a Solicitation/ Recommendation statement with the United States Securities and Exchange Commission in response to any Tender Offer Statements to be filed by TrustCo Bank Corp NY or Ambanc Holding Co., Inc. WE URGE INVESTORS TO READ THESE DOCUMENTS BECAUSE THEY CONTAIN IMPORTANT INFORMATION. Investors are currently able to obtain the Form S-4 Registration Statement and will be able to obtain the Solicitation/ Recommendation Statement of each company when filed, free of charge at the SEC's website, www.sec.gov. In addition, documents filed with the SEC by Cohoes are available free of charge from the Secretary of Cohoes at 75 Remsen Street, Cohoes, New York 12047, telephone (518) 233-6500. Documents filed with the SEC by Hudson River are available free of charge from the Secretary of Hudson River at One Hudson City Centre, Hudson, New York 12534, telephone (518) 828-4600. Cohoes and Hudson River and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies to approve the Merger. INFORMATION ABOUT THE PARTICIPANTS MAY BE OBTAINED THROUGH THE SEC'S WEBSITE FROM THE S-4 REGISTRATION STATEMENT FILED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION ON JUNE 26, 2000, as amended. [GRAPHIC OMITTED: Map of the counties in which Hudson River Bancorp, Inc. and Cohoes Bancorp, Inc. operate (Warren, Saratoga, Schenectady, Albany, Renssalaer, Greene, Columbia and Dutchess) showing approximately where in each county branch offices of Cohoes Savings Bank or Hudson River Bank & Trust Company exist.] DESCRIPTION OF HUDSON RIVER (HRBT) ================================================================================ - - Headquartered in Hudson, NY, the company provides full-service banking, as well as investment management, trust and commercial services through its subsidiary, Hudson River Bank & Trust Company. The company operates 18 branch offices. - - A summary of Hudson River's balance sheet and earnings performance as of June 30, 2000 is as follows: (in thousands) Total Assets $1,156,187 Loans, net 822,501 Securities 246,805 Deposits 745,032 Total Equity 200,098 Equity to Assets 17.31% LTM Earnings $ 10,108 LTM EPS $ .71 LTM ROE 4.96% DESCRIPTION OF COHOES BANCORP (COHB) ================================================================================ - - Unitary holding company headquartered in Cohoes, NY. Its principal subsidiary, Cohoes Savings Bank, operates 21 banking locations throughout the NY upstate region. - - A summary of Cohoes' balance sheet and earnings performance as of June 30, 2000 is as follows: (in thousands) Total Assets $727,327 Loans, net 600,413 Securities 95,203 Deposits 494,875 Total Equity 121,504 Equity to Assets 16.71% LTM Earnings $ 6,077 LTM EPS $ 0.76 LTM ROE 4.77% TRANSACTION DESCRIPTION - TERM SHEET ================================================================================ Exchange Ratio: Fixed exchange ratio of 1.185 shares of HRBT for each COHB share. Value: At deal announcement, the COHB shareholders would have received $11.04, based on HRBT's closing stock price of $9.31 on 4/24/00. The aggregate offer would have been approximately $87.3 million. As of 7/31/00, COHB shareholders would receive $14.22, based on HRBT's closing price of $12.00 for an aggregate deal value of $113.1 million. Ownership Profile: HRBT 62% / COHB 38% TRANSACTION DESCRIPTION - TERM SHEET ================================================================================ Management: Chairman & CEO: Robinson for first 36 mos. President: Florio On the third anniversary, CEO position shared between Robinson and Florio, for a six month transition. Then Florio is sole CEO and Robinson continues as chairman. Board of Directors Representation: 6 HRBT members / 6 COHB members Accounting/ Stock Percentage: Purchase Accounting; 100% Stock Stock Purchase Option: Reciprocal standard 19.9% Agreements TRANSACTION BENEFITS ================================================================================ STRATEGIC: - Creates a dominant franchise with assets of approximately $1.9 billion and a $293 million market capitalization based on recent market prices - Expands core market area and creates critical mass in upstate New York with a strong local presence - Enhances ability to compete and widens product range through a broadened customer base with similar demographics - Provides an additional platform for further growth TRANSACTION BENEFITS ================================================================================ FINANCIAL: - Significantly accretive to earnings - Strong capital position - Purchase accounting provides flexibility to maintain stock repurchases - Increases liquidity - Identified cost savings of approximately $3.6 million. After working together as a team, we fully expect cost saves to now exceed $5.5 million, a 53% increase from our original estimates. - Revenue enhancements and/or deployment of excess capital/ incremental cash will further enhance financial benefits STRONG NY MARKET SHARE ================================================================================ Deposit Data & Market Share Information is as of June 30, 1999 Source: SNL Securities, L.P. County Institution Total Deposits ($millions) Market Share % - ----------- --------------- --------------------- -------------- Albany HRBT $ 38 .62% COHB 321 5.32 ------ ----- Pro Forma 359 5.94 Columbia HRBT 457 59.22 Dutchess HRBT 24 .84 Greene COHB 1 .17 Rensselaer HRBT 63 4.08 COHB 57 3.71 ------ ----- Pro Forma 119 7.79 Saratoga COHB 48 2.87 Schenectady HRBT 176 8.51 COHB 24 1.18 ------ ----- Pro Forma 200 9.69 Warren COHB 7 .71 STRONG BALANCE SHEET COMPOSITION ================================================================================ Estimated June 30, 2000 Pro Forma Balance Sheet ($ in millions) Estimated HRBT COHB Pro Forma ----------- ---------- ----------- Assets $1,156 $727 $1,883 Net Loans 823 600 1,423 Investments 247 95 342 Deposits 745 495 1,240 Borrowings 182 96 278 Tangible Capital 189 122 311 STRONG BALANCE SHEET COMPOSITION ================================================================================ Estimated June 30, 2000 Pro Forma Balance Sheet ($ in millions) Estimated HRBT COHB Pro Forma ----------- ---------- ----------- App. Market Capitalization $ 183 $ 110 $ 293 Nonperforming Loans $ 13 $ 4 $ 17 Borrowings/Assets 15.74% 13.20% 14.76% Tangible Capital/Assets 16.35% 16.70% 16.52% LLR/Loans 2.43% 0.83% 1.78% LLR/Nonperforming Loans 158% 124% 146% ATTRACTIVE EPS ACCRETION ================================================================================ ($ in millions, except for per share data) Est. 2002 ------------- HRBT Estimated Net Income ($ .87)(1) $11.8 COHB Estimated Net Income ($1.00)(1) 6.9 ----- Total Estimated Net Income 18.7 After-Tax Cost Savings ($3.6 Pre-Tax) 2.3 After-Tax Earnings on Incremental Cash/ Capital 0 Revenue Enhancements 0 Purchase Accounting Adjustments (2) 2.0 ----- Pro Forma Net Income $23.0 ===== Estimated Pro Forma FD Shares 23.3 ----- Pro Forma EPS $0.98 ===== HRBT EPS Accretion 13% COHB EPS Accretion 16% (1) Based on management expectations. (2) Includes amortization of negative goodwill generated in transaction plus any balance sheet mark to markets. COST SAVING ANALYSIS ================================================================================ Non Interest Expense: - -------------------------------- (In Thousands) 3/31 6/30 ------ ------ Salary & Benefits $1,669 $2,968 Occupancy Expense 104 304 ESOP Expense 616 616 Other Operating Expenses 1,212 1,612 ------ ------ Total $3,601 $5,500 Estimated Pre-tax Merger and Restructuring Charges of $6mm Note: Full phase-in expected in 2001. REVENUE ENHANCEMENT OPPORTUNITIES ================================================================================ - - Incremental earnings potential through ability to leverage excess capital - - Trust services - - Expansion of small business lending - - Cash management services - - Expanded legal lending limit TIMING OF TRANSACTION ================================================================================ - - Transition teams for both banks have been formed and are working on merger-related issues - - COHB & HRBT Shareholder votes both occur on August 17, 2000 - - Transaction expected to close in early 4th Quarter, 2000 - - Transaction must close by February 28, 2001 ================================================================================ Proposal of TrustCo Bank Corp NY ================================================================================ PEER GROUP ANALYSIS: TRST - A More Than Fully Valued Currency ================================================================================
LTM Dividend Assets Tang Eq/ Loans/ --------- Efficiency Market Net Int. ------------ Finc'l Company State Ticker ($M) Assets Assets ROAA ROAE Ratio Cap ($M) Margin Payout Yield Date ----- ------ ------ -------- ------ --------- ---------- -------- -------- ------------ ------ 1 BSB Bancorp, Inc. NY BSBN 2,230.9 6.98 78.72 0.82 11.34 43.68 214.1 4.13 55.87 4.91 Mar-00 2 Harleysville National Corporation PA HNB 1,683.3 7.74 64.73 1.45 17.56 51.56 214.7 4.37 38.22 3.77 Mar-00 3 Main Street Bancorp, Inc. PA MBN 1,544.9 5.06 45.57 0.21 3.84 70.90 92.9 3.36 186.67 6.54 Jun-00 4 National Penn Bancshares, Inc. PA NPBC 2,309.8 6.32 69.48 1.28 19.07 58.02 364.6 4.27 49.10 4.03 Jun-00 5 Oriental Financial Group, Inc. PR OFG 1,751.8 7.43 33.48 1.84 24.89 44.04 243.2 3.41 28.04 4.59 Mar-00 6 Sandy Springs Bancorp, Inc. MD SASR 1,691.6 5.49 52.76 1.15 16.49 57.73 195.6 4.06 41.49 3.73 Jun-00 7 United National Bancorp NJ UNBJ 2,146.4 5.01 59.46 1.19 19.98 58.26 281.3 3.99 50.24 4.85 Jun-00 8 NBT Bancorp, Inc. NY NBTB 2,101.3 7.94 63.85 0.95 11.18 56.21 198.0 4.45 62.79 6.18 Jun-00 9 U.S.B. Holding Co., Inc. NY UBH 1,790.0 5.72 56.49 1.17 19.86 47.94 235.5 3.75 24.57 2.50 Jun-00 Average: 1,916.7 6.41 58.28 1.12 16.02 54.26 226.7 3.98 59.67 4.57 Median: 1,790.0 6.32 59.46 1.17 17.56 56.21 214.7 4.06 49.10 4.59 TrustCo Bank Corp of NY NY TRST 2,367.1 7.44 57.31 1.69 23.45 37.23 668.1 4.41 80.48 4.85 Jun-00
Peer group includes Mid Atlantic Banks with $1.5 billion - $2.5 billion in assets and a tangible captial ratio between 5% and 8% Pricing as of 7/28/00 Source: SNL Securities, L.P. PEER GROUP ANALYSIS: TRST - A More Than Fully Valued Currency ================================================================================
Price To Average Weekly % owned by YTD ------------------------------- Daily Volume/ -------------------- Price Finc'l Company State Ticker Book TangBook Qtr EPS LTM EPS Volume Shares Out Insiders Institution Change Date ----- ------ ----- -------- ------- ------- ------- ---------- -------- ----------- ------ ------ 1 BSB Bancorp, Inc. NY BSBN 133.08 134.40 9.32 11.66 20,520 1.00 11.02 39.97 5.84 Mar-00 2 Harleysville National Corporation PA HNB 179.17 180.47 9.42 9.39 5,160 0.29 5.92 13.16 (8.65) Mar-00 3 Main Street Bancorp, Inc. PA MBN 114.63 114.63 NM 29.58 19,060 0.91 10.52 5.93 (13.29) Jun-00 4 National Penn Bancshares, Inc. PA NPBC 232.73 241.49 12.89 12.81 6,320 0.18 9.50 12.31 (20.90) Jun-00 5 Oriental Financial Group, Inc. PR OFG 173.02 173.02 10.33 8.88 8,940 0.35 26.02 6.87 (40.79) Mar-00 6 Sandy Springs Bancorp, Inc. MD SASR 184.97 223.31 11.61 10.87 4,800 0.25 5.34 5.48 (20.60) Jun-00 7 United National Bancorp NJ UNBJ 221.77 235.71 11.78 11.70 10,300 0.34 6.60 21.14 (25.63) Jun-00 8 NBT Bancorp, Inc. NY NBTB 121.55 121.95 15.72 9.99 40,000 1.08 7.59 18.28 (29.03) Jun-00 9 U.S.B. Holding Co., Inc. NY UBH 207.33 208.7 12.18 12.39 2,240 0.07 35.16 3.70 (15.59) Jun-00 Average: 174.25 181.52 11.66 13.03 13,038 0.50 13.07 14.09 (18.74) Median: 179.17 180.47 11.70 11.66 8,940 0.34 9.50 12.31 (20.60) TrustCo Bank Corp of NY NY TRST 375.00 375.00 16.45 17.12 36,640* 0.34 13.00 20.03 (6.60) Jun-00
Peer group includes Mid Atlantic Banks with $1.5 billion - $2.5 billion in assets and a tangible captial ratio between 5% and 8% Pricing as of 7/28/00 Source: SNL Securities, L.P. An average of 7,250 shares repurchased are estimated to be related to the DRIP program TrustCo Bank Corp NY Total Shareholder Return Comparison ================================================================================
Total Shareholder Return - Price To Holding Period Percentage* Assets ------------------ --------------------------------------- Company Ticker ($M) Qtr EPS* TangBook* 3 Year 5 Year 10 Year ------ ------ -------- --------- ----------- ------------ -------------- TrustCo Bank Corp of NY TRST 2,367.1 16.28 375.00 20.6 21.4 23.2 BSB Bancorp, Inc. BSBN 2,230.9 8.35 134.40 (4.1) 12.5 20.7 Commerce Bancorp, Inc. CBH 7,464.1 20.98 405.29 22.4 33.5 28.8 Harleysville National Corporation HNBC 1,683.3 10.45 180.47 5.5 10.3 14.8 M&T Bank Corporation MTN 21,746.1 12.87 291.42 11.1 22.5 23.4 National Penn Bancshares, Inc. NPBC 2,309.8 12.42 241.49 5.5 12.5 12.5 NBT Bancorp, Inc. NBTB 2,101.3 16.18 121.95 (12.0) 5.7 10.2 North Fork Bancorporation, Inc. NFB 14,682.7 7.94 279.00 5.0 23.6 16.9 Sandy Springs Bancorp, Inc. SASR 1,691.6 12.18 223.31 5.8 9.5 31.2 Summit Bancorp SUB 38,985.1 8.13 178.83 16.8 7.4 12.5 United National Bancorp UNBJ 2,146.4 10.58 235.71 7.8 12.9 15.5 Average: 9,504.1 12.02 229.19 6.4 15.0 18.7 Median: 2,270.3 11.38 229.51 5.7 12.5 16.2
Note: Analysis assumes all dividends are reinvested in security Pricing as of 7/28/00 Analysis review date: Month ending June 30, 2000 Sources: Bloomberg and SNL Securities, L.P. Analyst View TRST Stock as Fully-Valued ================================================================================ Last 2000 2001 EPS Firm Name Recommendation Confirmed EPS Est. EPS Est. Growth - -------------------------- -------------- --------- -------- -------- ------ First Albany Corp. Neutral 02/07/00 0.76 N/A 10.0% Corinthian Partners Market Perform 02/09/00 0.78 0.85 10.3% Sandler O'Neill & Partners Market Perform 07/03/00 0.78 0.85 N/A Average: $0.77 $0.85 10.2% Median: $0.78 $0.85 10.2% High: $0.78 $0.85 10.3% Low: $0.76 $0.85 10.0% Lack of Acquisition Expertise Presents High Level of Execution Risk ================================================================================ Acquisition Asset Size (000) Share Buyback --------------- ---------------- --------------------------------- 1991 Home and City Savings Bank $864.8 as needed for retail DRIP program 1992 none as needed for retail DRIP program 1993 none as needed for retail DRIP program 1994 none as needed for retail DRIP program 1995 none as needed for retail DRIP program 1996 none as needed for retail DRIP program 1997 none as needed for retail DRIP program 1998 none as needed for retail DRIP program 1999 none as needed for retail DRIP program 2000 Landmark Financial Corp $ 26.4 as needed for retail DRIP program Valuation at Extremely High Levels ================================================================================ - - On a GAAP Earnings basis, TRST trades at a 7 multiple premium to a peer group of regional banks with assets between $1.5 billion and $3.0 billion - - TRST is also fully valued on a cash earnings basis, trading at a 6-7 multiple premium to regional peer group - - On a tangible book value basis, TRST (nearly 4 times book) trades at a 2 multiple premium to regional peers (2 times book) - - The dividend discount valuation suggests that TRST is overvalued given its premium valuation and earnings growth prospects Why the TRST Stock Price will be Under Pressure ================================================================================ - - Deal initially dilutive to TRST EPS - - 56% cost savings (of 12/31/99 non-interest expense) announced in Registration Statement carries substantial integration risk - - Cost savings implies substantial branch closings. Resulting reduced customer service will create customer retention issues and disruption to core franchise - - TrustCo assumes no customer/revenue runoff in pro forma projections Why COHB/HRBT Makes Sense ================================================================================ 1. Accretive to EPS 2. Merger rationale predicated on growth 3. Minimal disruption to customers and core franchise 4. Moderate dividend payout ratio with substantial potential for dividend growth 5. Excess captial provides for tremendous growth opportunities and share repurchases 6. Minimal integration risk/branch overlap 7. "Friendly" merger with similar cultures/philosophies 8. Definitive Agreements in place and all strategic/cultural issues in place 9. Creates $2 billion franchise and a "double dip" opportunity Why TrustCo Offer Does Not Make Sense ================================================================================ 1. Initially dilutive to TRST EPS by 6% 2. Substantial book value dilution to both COHB and HRBT shareholders 3. Predicated on cost savings 4. Substantial disruption to customers/core franchise 5. High dividend payout with low potential for growth 6. Growth constrained by lack of capital 7. High integration risk/revenue runoff 8. "Hostile" merger with culture clash 9. 11 conditions and terms specified as a condition for merger 10. Fully valued TRST currency trading at takeout value makes "double dip" opportunity unlikely Why the TRST tender will never occur and how shareholders could lose ================================================================================ - - Tender of enough shares of COHB/HRBT stock so that, after completion of the offer, TRST owns at least a majority of the shares of COHB stock (on a fully diluted basis) - - Stockholders of COHB/HRBT not having approved the merger of COHB/HRBT - - Requires valid termination of the proposed COHB/HRBT merger agreement - - Requires valid termination of the HRBT/COHB option agreement - - Requires execution of a definitive merger agreement between TRST and COHB or HRBT - - Receipt of all required regulatory approvals - - Effectiveness of registration statement filed by TRST - - TRST being satisfied that the provisions of Section 203 of the Delaware General Corporation Law do not apply to TRST offer and the proposed TRST/COHB or TRST/HRBT merger - - Approval by TRST stockholders of the issuance of TRST stock for either offer - - Receipt of an opinion that the tender offer and subsequent merger constitute a tax-free reorganization - - Absence of any prospective material adverse change in the sole judgment of TRST Why Ambanc Offer Does Not Make Sense ================================================================================ - - Lack of public filing makes deal or pro forma data difficult to ascertain - - AHCI offer ($16.50 in cash) represents deal value of $129.3 million - - As of March 31, 2000 AHCI had assets of $721 million and tangible equity of $68.1 million - - AHCI "core franchise" (thrift only) estimated at approximately $500 million - - Pro forma AHCI/COHB franchise estimated to have a tangible capital ratio of approximately 4% post merger, which presents significant hurdles to regulatory approvals. Further, it appears AHCI is assuming HRBT walks away from its option for no compensation. - - 4.0% post-merger tangible capital ratio would constrain growth opportunities for AHCI - - AHCI 1998 purchase of AFSALA Bancorp is largest acquisition implemented by AHCI - - COHB/HRBT management estimates that AHCI would have to raise proceeds via sale of availble for sale securities at a substantial loss - - AHCI over the past several years has been seeking to be acquired. COHB had preliminary discussion but passed after the completion of due diligence. COHB's last offer in June 2000 was rejected by AHCI. -----END PRIVACY-ENHANCED MESSAGE-----