Hudson City to Expand Metropolitan New York Franchise With Acquisition of Sound Federal Bancorp
February 09 2006 - 9:00AM
PR Newswire (US)
PARAMUS, N.J., Feb. 9 /PRNewswire-FirstCall/ -- Hudson City
Bancorp, Inc. ("Hudson City") (NASDAQ:HCBK) and Sound Federal
Bancorp, Inc. ("Sound Federal") (NASDAQ:SFFS) announced today the
execution of a definitive agreement for Hudson City to acquire
Sound Federal for $20.75 per share in cash, representing an
aggregate transaction value of approximately $265 million. Sound
Federal, with $1.15 billion in assets and $970 million in deposits,
was founded in 1891 and has 14 branches in New York's Westchester,
Rockland, and Putnam Counties as well as Fairfield County,
Connecticut. This acquisition represents Hudson City's initial
entry into the high-income suburban counties served by Sound
Federal and further enhances the already attractive demographics of
Hudson City's footprint. The addition of Sound Federal's branch
network will complement Hudson City's organic growth plans of
adding 10 to 15 branch offices per year. Following the acquisition,
Hudson City will have branches in seven of the top 50 counties in
the United States as ranked by estimated 2005 median household
income. Upon completion of the acquisition, Hudson City would rank
as the 4th-largest thrift in the United States with over $29
billion in assets and 104 retail branches in New Jersey, New York,
and Connecticut. The definitive agreement has been approved by the
directors of both Hudson City and Sound Federal. The transaction is
subject to approval by shareholders of Sound Federal as well as
customary regulatory approvals, and is expected to close in the
early summer of 2006. The transaction is expected to be breakeven
to Hudson City's current year GAAP EPS and modestly accretive to
Hudson City's GAAP EPS in the first full year following closing.
"The acquisition of Sound Federal provides Hudson City a unique
opportunity to expand our retail banking franchise into desirable
markets similar to those within our existing branch footprint,"
said Ronald E. Hermance, Jr., Chairman, President and Chief
Executive Officer of Hudson City. "This strategic transaction
provides a foundation for continued growth within Sound Federal's
market area, complementing our ongoing organic expansion
initiatives and enhancing our company's overall growth potential.
In Sound Federal, we have found a partner with a similar
traditional thrift business model and that shares our focus on
providing its customers with superior value and service. We welcome
Sound Federal to the Hudson City family and look forward to
offering our broad array of products and services to Sound
Federal's customers." "We are excited about joining Hudson City, a
company that shares our strong commitment to its customers,
employees, shareholders and the community," said Bruno J. Gioffre,
Chairman of the Board of Directors of Sound Federal. "We are
pleased that we will be able to offer new deposit and lending
products to our customers with the same friendly, responsive
service that our customers have come to expect. Our employees will
be rewarded with new opportunities within a large and growing
organization that has a track record as an excellent employer. This
transaction also provides excellent value for our shareholders. I
am extremely proud of our fine organization and its 115 year
legacy, and Sound Federal looks forward to continuing our tradition
of customer and community service as part of Hudson City." Hudson
City intends to retain the existing Sound Federal branch locations
and customer service personnel. The members of Sound Federal's
board of directors will be asked to serve on a newly-created
advisory board that will maintain and develop customer
relationships within Sound Federal's market area. Lehman Brothers
served as Hudson City's financial advisor and Thacher Proffitt
& Wood LLP served as Hudson City's counsel. Keefe, Bruyette and
Woods served as Sound Federal's financial advisor and Luse Gorman
Pomerenk & Schick, P.C. served as Sound Federal's counsel.
Conference Call Hudson City will have a conference call regarding
this announcement at 11:00 a.m. Eastern time today, Thursday,
February 9. The conference call may be heard in listen-only mode by
calling 800-894-5910 (Domestic) or 785-424- 1052 (International).
The access code for both is 8057554. A copy of the investor
presentation for this conference call also will be available at
http://www.hcbk.com/. The call will be archived and will be
available by telephone replay for one week at 888-203-1112
(Domestic) or 719-457-0820 (International). The access code for
replay is 8057554. About Hudson City Hudson City Bancorp maintains
its corporate office in Paramus, New Jersey. Its wholly owned
subsidiary, Hudson City Savings Bank, is a well-established
community banking institution with a long-standing tradition of
service excellence. Hudson City is recognized as one of the most
efficient banks in the country, which enables it to deliver
significant values to customers in the form of competitive deposit
yields and mortgage rates, lower closing fees and a
straight-forward, streamlined mortgage process. Hudson City, the
largest savings bank headquartered in New Jersey, also serves
customers throughout metropolitan New York and Philadelphia.
Deposit accounts at Hudson City are FDIC-insured to the maximum
allowed by law. Forward-Looking Statements This release may contain
certain "forward looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995, and may be
identified by the use of such words as "may," "believe," "expect,"
"anticipate," "should," "plan," "estimate," "predict," "continue,"
and "potential" or the negative of these terms or other comparable
terminology. Examples of forward-looking statements include, but
are not limited to, statements about (i) the benefits of the merger
between Hudson City Bancorp and Sound Federal Bancorp, including
future financial and operating results, cost savings and accretion
to reported earnings that may be realized from the merger and (ii)
Hudson City's and Sound Federal's plans, objectives, expectations
and intentions and other statements contained in this release that
are not historical facts. The following factors, among others,
could cause actual results to differ materially from the
anticipated results or other expectations expressed in the
forward-looking statements: (1) the businesses of Hudson City and
Sound Federal may not be combined successfully, or such combination
may take longer to accomplish than expected; (2) the cost savings
from the merger may not be fully realized or may take longer to
realize than expected; (3) operating costs, customer loss and
business disruption following the merger, including adverse effects
on relationships with employees, may be greater than expected; (4)
governmental approvals of the merger may not be obtained, or
adverse regulatory conditions may be imposed in connection with
governmental approvals of the merger; (5) the stockholders of Sound
Federal may fail to approve the merger; (6) adverse governmental or
regulatory policies may be enacted; (7) the interest rate
environment may further compress margins and adversely affect net
interest income; (8) the risks associated with continued
diversification of assets and adverse changes to credit quality;
(9) difficulties associated with achieving expected future
financial results; (10) competition from other financial services
companies in Hudson City's and Sound Federal's markets; and (11)
the risk of an economic slowdown that would adversely affect credit
quality and loan originations. Additional factors that could cause
actual results to differ materially from those expressed in the
forward-looking statements are discussed in Hudson City's and Sound
Federal's reports (such as Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K) filed with
the Securities and Exchange Commission ("SEC") and available at the
SEC's Internet site (http://www.sec.gov/). Any or all of the
forward-looking statements in this release and in any other public
statements made by Hudson City may turn out to be wrong. They can
be affected by inaccurate assumptions Hudson City might make or by
known or unknown risks and uncertainties. Consequently, no
forward-looking statement can be guaranteed. Hudson City does not
intend to update any of the forward-looking statements after the
date of this release or to conform these statements to actual
events. Additional Information The proposed transaction will be
submitted to Sound Federal's stockholders for their consideration.
Sound Federal will file with the SEC a proxy statement to be
distributed to the stockholders of Sound Federal in connection with
their vote on the proposed transaction and other relevant documents
concerning the proposed transaction. Stockholders of Sound Federal
are urged to read the proxy statement and the other relevant
documents filed with the SEC when they become available, as well as
any amendments or supplements to those documents, because they will
contain important information. The proxy statement, as well as
other filings containing information about Hudson City and Sound
Federal, may be obtained free of charge at the SEC's website at
http://www.sec.gov/. Copies of the proxy statement and the SEC
filings that will be incorporated by reference in the proxy
statement may also be obtained free of charge by directing a
request to Sound Federal, Chief Financial Officer, 1311 Mamaroneck
Ave., White Plains, NY 10605, (914) 761- 3636. Participants in This
Transaction Hudson City and Sound Federal and their respective
directors and executive officers may be deemed participants in the
solicitation of proxies from Sound Federal's stockholders in
connection with this transaction. Information about the directors
and executive officers of Hudson City and Sound Federal and
information about other persons who may be deemed participants in
this transaction will be included in the proxy statement. You can
find information about Hudson City's executive officers and
directors in Hudson City's definitive proxy statement filed with
the SEC on April 20, 2005. You can find information about Sound
Federal's executive officers and directors in Sound Federal's
definitive proxy statement filed with the SEC on July 8, 2005. You
can obtain free copies of these documents from Hudson City by
directing a request to Hudson City, Investor Relations Officer,
West 80 Century Road, Paramus, NJ 07652, (201) 967-1900 or from
Sound Federal using the contact information above. DATASOURCE:
Hudson City Bancorp, Inc. CONTACT: Louis J. Beierle, First Vice
President, Investor Relations, Hudson City Bancorp, Inc.,
+1-201-967-8290, Web site: http://www.hcbk.com/
http://www.soundfed.com/
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