New Jersey's Hubco Inc. announced two mergers last week for a combined total of almost $30 million, including the company's first foray into credit card processing.
The announcements mark the ninth and 10th acquisitions in 4 1/2 years for the holding company, which has tripled in size since 1990.
Hubco, a $1.4 billion-asset company based in Union City, will buy Jefferson National Bank, a $100-million-asset bank in Passaic, N.J., for about $10 million in common stock. The deal is expected to close in the first quarter of 1995. The Passaic bank will be merged into Hubco's subsidiary, Hudson United Bank.
Hubco will gain four branches in Clifton and Passaic counties in addition to its current nine in Passaic. Hubco has a total of 45 branches in four northern counties of the Garden State.
No Jefferson branches will be closed, said Hubco president and chief executive Kenneth T. Neilson.
Earlier in the week, Hubco announced that it was buying Jersey City-based Shoppers Charge Accounts Co. for about $18.5 million in cash -- its first nonbank acquisition among the 10 deals.
Although Hubco has issued credit cards in the bank's name, the purchase of $53-million-asset Shoppers will give the company its first in-house credit card processing operation, allowing it to keep the accounts in its portfolio.
"This will be our entry into the market," said Mr. Neilson. "We think this offers some really unique opportunities."
The 50-year-old Shoppers is the 12th largest third-party retail credit card company in the country, serving 400 small businesses with 40,000 cardholders.
Hubco is trying to boost its fee income and net interest margin. For the first six months of 1994, Hubco reported a 5.05% net interest margin, consistent with the bank's average over the last five years.
"They've been a very active acquirer," said Elizabeth A. Summers, vice president of Ryan, Beck & Co. "We have a mature industry. The only way to grow revenue is to grow market share and the most efficient way to grow that is through acquisitions."
The announcements also follow the collapse in June of a merger-conversion agreement with Statewide Savings Bank, whose application was rejected by federal regulators because of a general wariness about such transactions.
That deal, which had been pending for more than a year, had kept Hubco management in limbo, but "now they're clearly back on the acquisition trail," Ms. Summers said.
And Hubco isn't finished yet. It's taking a look across the New York state border and in southern and western New Jersey, said Mr. Neilson.
"We will continue to watch for acquisition activities, but that hasn't taken our focus off our primary business," Mr. Neilson said. "We have been able to put together some very good financial result as a result of our increased market share and the way we do business."
Hubco reported net income for the first six months of $7.7 million. The company had a return on equity of 20.5% and a return on assets of 1.4%.
The company will pay a quarterly cash dividend of 15 cents per share on Dec. 1 to shareholders of record on Nov. 15. It also approved a 3-to-2 stock split payable Jan. 14 to stockholders of record on Jan. 3. Hubco Inc. At a GlanceHeadquarters: Union City, N.J.Founded: 1890CEO: Kenneth T. NeilsonAssets: $1.4 billionROA: 1.4%Latest acquistions: Jefferson National Bank, Passaic, N.J. Shoppers Charge Account Co., Jersey CitySource: Company reports
