TD Banknorth to Acquire Hudson United Bancorp for $1.9 billion

PORTLAND, ME – TD Banknorth Inc. and Hudson United Bancorp announced today that they have signed a definitive agreement for TD Banknorth to acquire Hudson United for approximately $1.9 billion in cash and TD Banknorth stock.

“This acquisition is consistent with our growth strategy and will significantly expand our franchise in both Connecticut and eastern New York while providing us with a presence in the fast-growing markets of New Jersey and Philadelphia,” said William J. Ryan, TD Banknorth’s Chairman, President and Chief Executive Officer. “We look forward to welcoming Hudson United into the TD Banknorth family and to offering Hudson United’s customers a broader array of products and services.”

On a pro forma basis, the transaction will create a regional financial services company with 590 branches, 751 ATMs and over $26 billion in deposits across 8 northeastern states.

Acquisition Details
Under the terms of the definitive agreement, Hudson United shareholders will have the right, subject to proration, to elect to receive cash and/or TD Banknorth common stock, in either case having a value equal to $21.07 plus the product of 0.7247 times the average closing price of the TD Banknorth common stock during a ten-trading day period ending on the fifth trading day prior to the closing date. Based on the closing price of the TD Banknorth common stock on July 11, 2005, the deal is valued at $42.78 per Hudson United share and the aggregate merger consideration consists of approximately 51% TD Banknorth common stock and 49% cash. It is anticipated that the common stock consideration received in the transaction will be tax-free to Hudson United shareholders.

The cash for the transaction will be financed through TD Banknorth’s sale of approximately 29.6 million shares of TD Banknorth common stock to TD Banknorth’s majority stockholder, TD Bank Financial Group (“TD”), at a price of $31.79 per share. On a pro forma basis, based on the number of TD Banknorth shares outstanding as of June 30, 2005, TD’s percentage ownership of TD Banknorth will decrease slightly after giving effect to the transaction. However, through TD Banknorth share repurchases or, subject to meeting regulatory requirements, open market purchases, TD has indicated its intent to at least maintain its ownership of TD Banknorth at the level prior to the acquisition of Hudson United or, as market conditions warrant, to potentially increase its position.

It is anticipated that the transaction will be accretive to TD Banknorth’s GAAP EPS by approximately $0.06 in 2007, the first full year of combined operations between the two companies. In 2006, it is anticipated that the transaction will be slightly dilutive to TD Banknorth’s GAAP EPS by approximately $0.01.

“We are excited about joining TD Banknorth,” said Kenneth Neilson, Hudson United’s Chairman, President and Chief Executive Officer. “This transaction rewards our shareholders while maintaining our focus on local community banking.”

Under the terms of the definitive agreement, two Hudson United directors will be added to the TD Banknorth Board of Directors.

“We are pleased to support Bill Ryan and his team in this strategic acquisition,” said Ed Clark, President and Chief Executive Office of TD Bank Financial Group. “This transaction delivers on our shared vision for growth and marks a significant milestone in TD Banknorth’s expansion strategy.”

The transaction is subject to approval by shareholders of Hudson United and TD Banknorth, as well as customary regulatory approvals, and is expected to close in the first quarter of 2006.

Lehman Brothers served as TD Banknorth’s financial advisor and Elias, Matz, Tiernan & Herrick, LLP served as TD Banknorth’s counsel. Keefe, Bruyette and Woods served as Hudson United’s financial advisor and Pitney Hardin LLP served as Hudson United’s counsel.