A merger between two of upstate New York's oldest savings banks would create the largest thrift company based in the state-capital region.

Hudson River Bancorp in Hudson announced Tuesday that it would acquire Cohoes (N.Y.) Bancorp for $87 million and rename itself Cohoes-Hudson Bancorp. The banking operations would be combined under the name Hudson River Bank and Trust, which would have $1.8 billion of assets and 38 branches. The merger is expected to close by the end of the year.

The price is 73% of Cohoes' book value, said Scott Valentin, an analyst at Friedman, Billings, Ramsey & Co. in Arlington, Va.

Hudson would exchange 1.185 of its shares for each Cohoes share. Though the deal is being touted as a merger of equals, Hudson shareholders would own 62% of Cohoes-Hudson.

Cohoes-Hudson would have branches in eight counties and deposit shares of more than 5% in three of them: 9.69% in Schenectady County, 7.79% in Rensselaer County, and 5.94% in Albany County.

There is little overlap, so only a branch or two would be closed, executives said. Overall, the company expects to trim costs by $3.6 million in its first year.

Carl A. Florio, president and chief executive of $1.1 billion-asset Hudson River, said the union is a natural fit. "Our proven retail strategy and our products and services should add significant value to Cohoes' extensive retail network," he said in a press statement.

In a conference call, Harry L. Robinson, president and chief executive officer of $704 million-asset Cohoes, said Cohoes-Hudson would enhance revenues by pursuing more commercial loans. "We have a tremendous opportunity for small business lending in this area," he said.

Mr. Robinson also said that the company would also look at acquisition opportunities along the Hudson River in New York and in Massachusetts and Connecticut.

The Cohoes-Hudson board would have six directors from each company. Mr. Robinson would be chairman for six years and CEO for three. Mr. Florio would start as president and succeed Mr. Robinson as CEO.

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