MAHWAH, N.J.- Hudson United Bancorp has been viewed as a potential takeover target ever since its merger with Dime Bancorp of New York fell through last month.

But the top executive at $9.3 billion-asset Hudson United says the company will more likely buy than be bought - if it can boost its depressed stock price.

"We've never said we wouldn't consider offers if they come in - we would - but it's not our intent" to find a buyer, said Kenneth T. Neilson, chairman, president, and chief executive officer of the bank holding company.

After months of preparing to merge, Hudson and Dime Bancorp of New York mutually terminated their deal on April 28, in part because of an unsolicited offer for Dime by North Fork Bancorp of New York.

Since then several analysts have speculated that it was only a matter of time before Hudson United sold itself to a larger mid-Atlantic company.

But in an interview here last week Mr. Neilson said his company is far more disposed to making buyouts, but only when the stock is trading at a "premium valuation." Hudson's stock closed at $21.6875 Friday, well below its 52-week high of $35.063 in June.

To help boost his company's stock, Mr. Neilson has been meeting with analysts and investors "just to talk about our track record and our opportunities." He said he spends two or three days a week in such meetings and will continue to for the next few months.

Hudson also plans to begin a repurchase program in June, when restrictions relating to its purchase last year of JeffBanks Inc. and Southern Jersey Bancorp are lifted. That program, in addition to Hudson's strong earnings, should return its stock to premium trading levels and put Hudson back in the market for acquisitions, Mr. Neilson said.

"If our stock stays priced the way it is, we're going to be busy buying back as much of it as we can," he said. If it rebounds, "we'll be looking for other opportunities to expand our franchise."

Mr. Neilson has led the company since 1989. It has grown through acquisitions from a $500 million-asset banking company with 12 branches to one with about 200 branches in New Jersey, New York, Connecticut, and Pennsylvania.

Besides its rapid growth, Hudson United has had strong earnings. Its net income was $29.9 million in the first quarter, up $1.1 million. Its return on equity was 23.5% and it return on assets, 1.27%.

However, John M. Kline, an analyst at Sandler O'Neill & Partners in New York, said Hudson's stock is trading at about 8.2 times next year's earnings - against 10.6 for its peers. He added that the stock would need to reach $29 to be in line with its peer group.

Mr. Kline said he is glad Hudson is trying to develop a following, but added that the real key is keeping investors happy. "Getting out there and telling the story is good, but executing the story is even better," he said. He suggested that the company "take a breather" from acquisitions and "show the Street the true strength of its numbers."

Mr. Neilson said: "We've always been prepared for independence. In this decade we've done 31 mergers. We happen to have had one fall apart; it's not the end of the world for us."

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.