New Jersey's Hubco Inc. announced plans Thursday to acquire Poughkeepsie (N.Y.) Financial Corp. for $136 million in a stock deal valued at about 1.84 times book value.
The acquisition of $880 million-asset Poughkeepsie would boost Mahwah- based Hubco's assets to nearly $4 billion. More important, it gives Hubco entree to New York State-specifically the wealthy Hudson Valley region.
"This is a natural extension of our market," said Hubco chairman, president, and chief executive officer Kenneth T. Nielsen. Through its subsidiary banks, Lafayette American in Connecticut and Hudson United in New Jersey, Hubco operates 84 branches.
"We have similar attractive markets," Mr. Nielsen continued. "Both are in urban areas with many small businesses and in affluent suburban areas."
Poughkeepsie stockholders will get three-tenths of one share of Hubco common stock for each share they now own, as long as Hubco's stock price at the time the sale closes is at or above $33.33. Pending shareholder and regulatory approvals, the deal is expected to close in the first quarter. Hubco predicted the deal would add to earnings in the second quarter of 1998.
In New York Stock Exchange trading Thursday, shares of Hubco fell $1.06, to $34.312. In Nasdaq trading, shares of Poughkeepsie stock fell 63 cents, to $9.875, in heavy trading.
Poughkeepsie, which this month changed its subsidiary thrift's name to Bank of the Hudson, will retain its name and key management, including chairman and president Joseph B. Tockarshewsky. As a subsidiary of Hubco, it would be able to offer additional products such as trust services, cash management, and small-business loans.
The merger would give Hubco a foray into supermarket branching. Poughkeepsie operates 15 branches in five counties, nine of which are in supermarkets.
Analysts credited Mr. Tockarshewsky and his management team with resuscitating a struggling 165-year-old Poughkeepsie in the early 1990s. The institution, primarily a savings bank and real estate lender, fell victim to the early-'90s real estate crash, leaving it "close to death's door," according to one analyst.
But under Mr. Tockarshewsky, the company raised $20 million in a 1994 stock offering.
"They have created a very attractive franchise and done a solid job creating value for shareholders," said Frank J. Barkocy, managing director of Josephthal Lyon & Ross Inc., New York.
The deal is Hubco's third announced acquisition in less than a year. Its deals for Bank of Southington in Connecticut and Security National Bank in New Jersey are expected to close this quarter.