Hudson United Bancorp Reports EPS of $0.73 Per Share for the Fourth Qu

    Business Editors

    MAHWAH, N.J.--(BUSINESS WIRE)--Jan. 25, 2005--Executive Overview--Hudson United Bancorp ("the Company") (NYSE: HU) today reported net income of $32.9 million, or $0.73 per diluted share, for the quarter ended December 31, 2004. This represents a 35.2% increase in diluted EPS compared to the EPS of $0.54 per diluted share that the Company reported in the fourth quarter of 2003. Fourth quarter results include certain items, including income taxes at the statutory rate. The Company realized net security losses including charges for impairment of securities of $7.5 million ($4.9 million after tax), contract modification and settlement charges of $4.7 million ($5.1 million after tax), gains on sales of a building and the merchant processing business of $8.8 million ($5.7 million after tax) and a zero provision for loan and lease losses.
    The Company is aware of eleven brokerage firms that have published preliminary EPS estimates for Hudson United for 2005. These eleven estimates range from a low of $3.00 per diluted share to a high of $3.12 per diluted share with a consensus estimate of $3.06. The Company expresses comfort with a 2005 earnings estimate of $3.00 to $3.10 per share. The eleven published EPS estimates for 2005 are based upon varying assumptions that the brokerage firms make about the Company. The Company is not expressing comfort with any of the varying assumptions that the brokerage firms make for any of these eleven published EPS estimates. The Company does not undertake any continuing obligation to update its comfort on published EPS estimates.
    The Company's return on average equity was 25.12% and return on average assets was 1.45% for the fourth quarter of 2004. The net interest margin was 3.82% for the fourth quarter of 2004.
    For the fourth quarter of 2003 the Company's return on average equity was 21.40%, its return on average assets was 1.21%. The net interest margin was 4.05%.
    The Company's fully diluted EPS of $2.85 per diluted share for the year ended December 31, 2004 represents a 14% increase in diluted EPS compared to the EPS of $2.50 per diluted share that the Company reported for the year 2003. The Company's return on average equity was 26.04% and return on average assets was 1.49% for the year 2004. The net interest margin was 4.00%.
    For the year ended December 31, 2003, the Company's return on average equity was 25.67% and return on average assets was 1.41%. The net interest margin was 4.12%.
    "We are pleased to report a 14% increase in diluted earnings per share for the year of 2004." said Kenneth T. Neilson, Chairman, President and CEO. "We continue to show a steady trend of growth in commercial loans, commercial mortgage and credit card receivables. The growth in these higher yielding assets allowed us to achieve the double digit growth rate in earnings."

    Results of Operations for Quarter End and Year to Dated December 31, 2004

    Net interest income for the fourth quarter of 2004 was $79.6 million and the net interest margin was 3.82%. Net interest income for the fourth quarter of 2003 was $75.1 million and the net interest margin was 4.05%. Net interest income increased by $4.5 million in the fourth quarter of 2004 compared to the comparable fourth quarter of 2003. The increase in net interest income in the fourth quarter of 2004 compared to the fourth quarter in 2003 was due primarily to an increase in average earning assets. Net interest margin was reduced by the sale of certain higher yielding investment securities, an increase in the investment portfolio and increased borrowings.
    Net interest income for the year ended 2004 was $315.7 million and the net interest margin was 4.00%. Net interest income for the year ended 2003 was $299.3 million and the net interest margin was 4.12%. Net interest income increased by $16.4 million in 2004 compared to 2003. The increase in net interest income in 2004 compared to the comparable period in 2003 was due primarily to lower interest expense on deposits. This was offset in part by yields on new loans being originated in a lower interest rate environment. Interest income on securities increased in 2004 compared to 2003 due to an increase in the average volume being partially offset by a decline in average yield.
    The provision for loan and lease losses was zero for the fourth quarter of 2004 and $5.5 million for the fourth quarter of 2003. The decrease in 2004 over 2003 was primarily due to a 50 basis point sustained reduction in the net loan losses for the Company's consumer loan portfolio and lower levels of nonperforming loans and lower net charge-offs in 2004 as compared to 2003. Net charge offs for the fourth quarter of 2004 were $5.5 million compared to $5.3 million for the fourth quarter of 2003.
    The provision for loan and lease losses was $14.9 million for the year ended 2004 and $26.0 million for the comparable period of 2003. The decrease in 2004 over 2003 was due to lower levels of nonperforming loans, lower charge-offs and the above mentioned reduction in net loan losses for the Company's consumer loan portfolio Net charge offs for the year ended 2004 were $21.2 million compared to $25.1 million for the year ended 2003.
    Noninterest income was $37.3 million in the fourth quarter of 2004 and $41.1 million in the fourth quarter of 2003. Noninterest income for the fourth quarter of 2004 decreased by $3.8 million, or 9.2%, compared to the fourth quarter of 2003. The decrease in noninterest income in the fourth quarter of 2004 compared to 2003 was due mainly to net security losses resulting from impairment charges. As of December 31, 2004, certain securities were assessed as having additional impairments of $9.6 million that were other than temporary. The increase in other income results from the sale of a building and the merchant services business totaling $8.8 million.
    Noninterest income was $156.3 million in the year ended 2004 and $133.0 million in the year ended 2003. Noninterest income for the year ended 2004 increased by $23.3 million, or 17.5%, compared to the year ended 2003. The increase in noninterest income in 2004 compared to 2003 was due mainly to a full year of normal income associated with the Company's landfill gas operations and the one time cash settlement related to bankruptcy claims in the amount of $4.7 million in the second quarter of 2004. Increases in credit card income and loan fees were offset in part by decreases in retail service fees and reduced trading asset gains.
    Noninterest expense was $71.5 million for the fourth quarter of 2004 compared to $79.6 million for the fourth quarter of 2003. The decrease in noninterest expense in the fourth quarter of 2004 compared to the fourth quarter of 2003 is due mainly to the CBC correspondent bank settlement charges and related expense of exiting the correspondent banking business included in the fourth quarter of 2003.
    Noninterest expense was $283.7 million for the year ended 2004 compared to $256.3 million for the year ended 2003. The increase in noninterest expense in the year of 2004 compared to the year of 2003 was due to contract modification and settlement charges, severance, retirement and early vesting of certain benefits together with, the Company's third quarter modification of its data processing and item processing contracts, expense from landfill gas investments, which were owned for the full year 2004.
    The Company's pretax income for the fourth quarter of 2004 was $45.5 million, an increase of $14.4 million, or 46.4%, compared to the fourth quarter of 2003. The Company's provision for income taxes was $12.6 million for the quarter ended December 31, 2004 compared to $6.6 million for the fourth quarter of 2003.
    The Company's pretax income for the year ended 2004 was $173.4 million, an increase of $23.4 million, or 15.6%, compared to the year ended 2003. The Company's provision for income taxes was $45.3 million for the year ended 2004. The Company's provision for income taxes for the year ended 2003 was $37.7 million.

    Nonperforming Loans and Leases, and Asset Quality

    Nonperforming loans and leases totaled $12.3 million at December 31, 2004. This was a decrease of $0.9 million, or 7.3%, compared to $13.2 million of nonperforming loans and leases as of December 31, 2003. Nonperforming loans and leases were 0.25% of total loans and leases at December 31, 2004, compared to 0.28% at December 31, 2003.
    Nonperforming assets were $27.9 million at December 31, 2004, up from $14.2 million at December 31, 2003. Nonperforming assets as a percent of loans, leases and foreclosed property was 0.58% at December 31, 2004 and 0.30% at December 31, 2003. Nonperforming assets at December 31, 2004 include a property with a carrying value of $13.3 million under a letter of intent to sell scheduled to close during the first quarter of 2005.
    The Allowance for loan and lease losses totaled $60.8 million at December 31, 2004 compared to $67.8 at December 31, 2003. It represented 496% of nonperforming loans and leases at December 31, 2004, compared to 513% at December 31, 2003. The Allowance as a percentage of total loans and leases was 1.26% at December 31, 2004 and 1.46% at December 31, 2003.

    Other Balance Sheet Data

    Loan and lease categories consisting of commercial and financial, commercial real estate, consumer, and credit card loans totaled $4.7 billion at December 31, 2004, compared to $4.5 billion at December 31, 2003. These four loan and lease categories are the areas of loans that the Company emphasizes. This is because they generally have more attractive yields, interest rate sensitivity, and maturity characteristics than single family first mortgage loans. These four loan and lease categories represented approximately 97% of loans and leases at December 31, 2004, compared to 96% at December 31, 2003. The loan to deposit ratio at December 31, 2004 and December 31, 2003 was approximately 76% and 75%, respectively.
    Residential mortgage loans, which are not an area of emphasis for the Company, were $126.8 million as of December 31, 2004, compared to $167.9 million at December 31, 2003.
    Total investment securities were $3.5 billion at December 31, 2004, compared to $2.7 billion at December 31, 2003. Investment securities increased in 2004 over prior periods due primarily to planned purchases associated with the growth of shareholders equity. Total assets were $9.1 billion at December 31, 2004, compared to $8.1 billion at December 31, 2003.
    Deposits other than time deposits were $4.5 billion at December 31, 2004 and $4.3 billion at December 31, 2003. Total deposits were $6.3 billion at December 31, 2004 and $6.2 billion at December 31, 2003.
    Total stockholders' equity was $531.7 million and book value per common share was $11.82 at December 31, 2004. All regulatory capital ratios exceed those necessary to be considered a well-capitalized institution.

    Share Repurchases and Cash Dividends

    The Company did not repurchase any shares in the fourth quarter of 2004. The Company repurchased a total of 14,980 shares in the year of 2004, at an average price of $37.48 per share. The total cash allocated for these repurchases was $0.6 million.
    Total shares outstanding at December 31, 2004 were 44.9 million shares, compared to 44.8 million shares at December 31, 2003.
    The Company paid cash dividends of $0.35 per share in the fourth quarter of 2004. Total cash dividends paid in the fourth quarter was $15.7 million. Dividends paid in 2004 year to date were $1.36 per share. Total cash dividends paid in 2004 year to date were $61.1 million.
    The Company is the multi-state bank holding company for the Bank, which has 204 offices in New Jersey, New York, Connecticut and Pennsylvania.
    This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are not historical facts and include expressions about management's confidence and strategies and management's expectations about new and existing programs and products, relationships, opportunities, technology and market conditions. These statements may be identified by such forward-looking terminology as "expect", "look", "believe", "anticipate", "consider", "may", "will", or similar statements or variations of such terms. Such forward- looking statements involve certain risks and uncertainties. Actual results may differ materially from the results discussed in these forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, unexpected changes in interest rates, deterioration in economic conditions, declines in deposit or a decline in loan volume trends, decline in levels of loan quality, change in the trends in loan loss provisions, the unexpected unavailability of tax credits, especially in the Company's Section 29 credits, and the unanticipated effects of legal, tax and regulatory provisions applicable to the Company including compliance with the regulatory order from the FDIC which the Company is under. The Company assumes no obligation for updating any such forward-looking statements at any time. Important information on other material factors or supplemental factors that could cause the Company's financial results to differ from the forward-looking statements also is included in the Company's public reports filed with the SEC, including in our Form 10-K for the year ending December 31, 2003.

HUDSON UNITED BANCORP AND SUBSIDIARIES --------------------------------------------- CONSOLIDATED BALANCE SHEETS

Dec. 31, Dec. 31, (in thousands) 2004 2003 ---------------------------------------------- ----------- ---------- ASSETS Cash and due from banks $ 161,878 $ 272,636 Interest bearing due from banks 99,028 41,358 ---------- ---------- TOTAL CASH AND CASH EQUIVALENTS $ 260,906 $ 313,994

Investment securities available for sale, at market value $2,166,627 $2,706,185 ($1,491,084 and $1,813,247 in market value pledged at December 31, 2004 and December 31, 2003 respectively) Investment securities held to maturity,at cost; $1,364,900 market value $1,372,228 $ - ($1,201,730 ,at cost pledged, at December 31, 2004)

Trading Assets, market value $ 1,477 $ -

Loans and leases: Commercial and financial $2,190,359 $2,137,499 Commercial real estate mortgages 1,113,604 993,937 Consumer 995,766 1,033,693 Credit card 400,700 326,713 ---------- ---------- Sub-total $4,700,429 $4,491,842 Residential mortgages 126,775 167,913 ---------- ---------- TOTAL LOANS AND LEASES $4,827,204 $4,659,755 Less: Allowance for loan and lease losses (60,799) (67,846) ---------- ---------- NET LOANS AND LEASES $4,766,405 $4,591,909

Premises and equipment, net 121,037 125,168 Core deposit and other intangibles, net of amortization 20,104 22,664 Goodwill 83,561 81,068 Investment in separate account bank owned life insurance 150,073 144,126 Other assets 136,644 115,544 ---------- ---------- TOTAL ASSETS $9,079,062 $8,100,658 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Deposits: Noninterest bearing $1,355,624 $1,328,586 NOW, money market, and savings 3,129,355 3,009,821 Time deposits 1,859,219 1,904,952 ---------- ---------- TOTAL DEPOSITS $6,344,198 $6,243,359 Repurchase agreements 842,893 532,485 Other borrowings 879,530 388,734 ---------- ---------- TOTAL BORROWINGS 1,722,423 921,219 Other liabilities 255,607 238,117

Subordinated debt 225,184 239,773 ---------- ---------- TOTAL LIABILITIES 8,547,412 7,642,468 Stockholders' Equity: Common stock, no par value $ 92,788 $ 92,788 Additional paid-in capital 310,102 311,310 Retained earnings 304,000 237,046 Treasury stock, at cost (170,183) (176,505) Effect of stock compensation plans (1,359) (3,899) Accumulated other comprehensive income (loss) (3,698) (2,550) ---------- ---------- TOTAL STOCKHOLDERS' EQUITY $ 531,650 $ 458,190 ---------- ---------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $9,079,062 $8,100,658 ========== ==========

HUDSON UNITED BANCORP AND SUBSIDIARIES -------------------------------------------------- CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended Dec. 31, ------------------- (in thousands, except share data) 2004 2003 --------------------------------------------------------------------- INTEREST AND FEE INCOME: Loans and leases $72,142 $65,962 Investment securities 37,302 29,705 Other 284 373 --------- -------- TOTAL INTEREST AND FEE INCOME $109,728 $96,040 --------- -------- INTEREST EXPENSE: Deposits $14,826 $11,830 Borrowings 8,718 3,000 Subordinated and other debt 6,541 6,106 --------- -------- TOTAL INTEREST EXPENSE $30,085 $20,936 --------- -------- NET INTEREST INCOME $79,643 $75,104

PROVISION FOR LOAN AND LEASE LOSSES, PORTFOLIO LOANS - 5,500 --------- -------- NET INTEREST INCOME AFTER PROVISION FOR LOAN AND LEASE LOSSES $79,643 $69,604 --------- -------- NONINTEREST INCOME: Retail service fees $6,794 $9,639 Credit card fee income 9,444 9,197 Loan Fees 5,821 3,321 ATM and debit card fees 1,717 1,735 Separate bank owned life insurance income 1,459 2,154 Trust income 792 702 Income from Landfill Investments 4,116 4,453 Other income 13,389 5,084 Securities gains (losses) (7,490) 4,784 Trading asset gains 1,279 - --------- -------- TOTAL NONINTEREST INCOME $37,321 $41,069 --------- -------- NONINTEREST EXPENSE: Salaries and benefits $31,200 $29,765 Occupancy expense 7,873 7,527 Equipment expense 3,467 4,649 Outside services - data processing 7,181 7,554 Outside services - other 8,116 6,055 Amortization of intangibles 1,222 1,152 Marketing expense 1,815 1,130 Deposit and other insurance 494 575 Telephone expense 1,297 1,374 CBC correspondent bank settlement and related expense 183 7,421 Expense from Landfill Investments 4,741 6,001 Other 3,874 6,392 --------- -------- TOTAL NONINTEREST EXPENSE $71,463 $79,595 --------- -------- INCOME BEFORE INCOME TAXES $45,501 $31,078 PROVISION FOR INCOME TAXES 12,597 6,596 --------- -------- NET INCOME $32,904 $24,482 ========= ========

NET INCOME PER COMMON SHARE: Basic $0.73 $0.55 Diluted $0.73 $0.54

WEIGHTED AVERAGE SHARES OUTSTANDING: Basic 44,921 44,798 Diluted 45,110 44,974

HUDSON UNITED BANCORP AND SUBSIDIARIES ------------------------------------------------ CONSOLIDATED STATEMENTS OF INCOME

Year to Date Dec. 31, --------------------- (in thousands, except share data) 2004 2003 ------------------------------------------------- --------- ---------- INTEREST AND FEE INCOME: Loans and leases $274,251 $ 271,691 Investment securities 138,802 120,456 Other 1,381 1,982 -------- ---------- TOTAL INTEREST AND FEE INCOME $414,434 $ 394,129 -------- ---------- INTEREST EXPENSE: Deposits $ 50,606 $ 57,419 Borrowings 23,045 12,705 Subordinated and other debt 25,131 24,747 -------- ---------- TOTAL INTEREST EXPENSE $ 98,782 $ 94,871 -------- ---------- NET INTEREST INCOME $315,652 $ 299,258

PROVISION FOR LOAN AND LEASE LOSSES, PORTFOLIO LOANS 14,850 26,000 -------- ---------- NET INTEREST INCOME AFTER PROVISION FOR LOAN AND LEASE LOSSES $300,802 $ 273,258 -------- ---------- NONINTEREST INCOME: Retail service fees $ 30,628 $ 37,812 Credit card fee income 31,553 28,672 Loan Fees 19,075 13,079 ATM and debit card fees 6,947 7,330 Separate bank owned life insurance income 5,947 6,968 Trust income 3,141 2,599 Income from Landfill Investments 26,052 11,169 Other income 22,818 18,854 Impairment on mortgage related servicing assets - (2,004) Securities (losses) gains 8,887 5,117 Trading asset gain 1,279 3,449 -------- ---------- TOTAL NONINTEREST INCOME $156,327 $ 133,045 -------- ---------- NONINTEREST EXPENSE: Salaries and benefits $115,733 $ 101,790 Occupancy expense 30,968 30,266 Equipment expense 16,404 18,533 Outside services - data processing 33,255 29,654 Outside services - other 27,296 23,725 Amortization of intangibles 4,911 4,340 Marketing expense 6,888 3,295 Deposit and other insurance 2,419 2,233 Telephone expense 5,536 5,850 Expense from Landfill Investments 23,308 14,948 CBC Correspondent bank settlement and related expense 2,662 7,421 Other 14,326 14,240 -------- ---------- TOTAL NONINTEREST EXPENSE $283,706 $ 256,295 -------- ---------- INCOME BEFORE INCOME TAXES $173,423 $ 150,008 PROVISION FOR INCOME TAXES 45,340 37,687 -------- ---------- NET INCOME $128,083 $ 112,321 ======== ==========

NET INCOME PER COMMON SHARE: Basic $ 2.86 $ 2.51 Diluted $ 2.85 $ 2.50

WEIGHTED AVERAGE SHARES OUTSTANDING: Basic 44,717 44,737 Diluted 44,944 44,897

Supplemental Information ------------------------- Hudson United Bancorp ($ in thousands) 1Q04 2Q04 3Q04 4Q04 Y-T-D ---------- ---------- ---------- ---------- --------- End of Period ---------------- Total Securities 2,667,362 3,506,055 3,301,000 3,540,332 NA Total Assets 7,972,645 8,958,718 8,825,227 9,079,062 NA Total Deposits 6,242,598 6,128,993 6,290,439 6,344,198 NA Total Stockholders' Equity 492,751 478,170 516,925 531,650 NA Shares Outstanding 44,826 44,948 44,954 44,983 NA

Average Balance Sheet ---------------- Commercial/ Consumer Loans 4,442,326 4,503,975 4,624,471 4,652,794 4,556,823 Residential Real Estate Mortgage 162,044 149,086 137,692 128,324 143,745 Total Loans and Leases 4,604,370 4,653,061 4,762,163 4,781,118 4,700,568 Other Earning Assets 2,851,895 3,199,375 3,489,497 3,622,694 3,292,315 Total Earning Assets 7,456,265 7,852,436 8,251,660 8,403,812 7,992,883 Total Assets 8,071,442 8,436,611 8,852,794 9,013,565 8,594,921 Noninterest Bearing Deposits 1,254,798 1,314,739 1,334,238 1,356,682 1,315,280 Interest Bearing Deposits 4,921,224 4,830,107 4,955,853 4,935,262 4,910,803 Common Equity 470,068 478,972 496,533 521,195 491,786

Loan Portfolio Composition --------------------------- Commercial and Financial 2,126,354 2,208,139 2,231,299 2,190,359 NA Commercial Real Estate Mortgage 989,182 1,041,677 1,089,828 1,113,604 NA Consumer 1,032,885 1,049,631 1,027,347 995,766 NA Credit Card 296,680 323,763 344,320 400,700 NA Sub-total 4,445,101 4,623,210 4,692,794 4,700,429 NA Residential Real Estate Mortgage 156,981 140,571 132,671 126,775 NA Total Loans and Leases 4,602,082 4,763,781 4,825,465 4,827,204 NA Allowance for Losses 67,839 66,048 66,289 60,799 NA Net Loans and Leases 4,534,243 4,697,733 4,759,176 4,766,405 NA

End of Period ---------------- Nonaccruing Loans 14,211 12,286 12,519 12,257 NA Forclosed Property 769 2,144 2,111 15,618 NA Total Nonperforming Assets 14,980 14,430 14,630 27,875 NA 90 Days Past Due & Accruing 13,989 13,516 15,934 14,439 NA Net Charge Offs 5,607 5,846 4,259 5,490 NA Intangible Assets 100,781 99,557 99,334 103,665 NA

($ in thousands) 1Q03 2Q03 3Q03 4Q03 Y-T-D ---------- ---------- ---------- ---------- --------- End of Period ---------------- Total Securities 2,938,287 2,955,047 2,937,860 2,706,185 NA Total Assets 7,809,894 7,984,039 7,975,364 8,100,658 NA Total Deposits 6,184,103 6,231,529 6,268,791 6,243,359 NA Total Stockholders' Equity 428,077 454,252 457,720 458,190 NA Total Shares Outstanding 44,546 44,758 44,793 44,799 NA

Average Balance Sheet --------------------- Commercial/ Consumer Loans 4,009,151 4,046,966 4,129,256 4,263,574 4,112,982 Residential Real Estate Mortgage 257,472 234,447 210,162 180,689 220,453 Total Loans and Leases 4,266,623 4,281,413 4,339,418 4,444,263 4,333,435 Other Earning Assets 2,816,650 3,138,072 3,173,428 3,002,802 3,033,633 Total Earning Assets 7,083,273 7,419,485 7,512,846 7,447,065 7,367,068 Total Assets 7,681,301 7,976,962 8,081,105 8,045,908 7,945,700 Noninterest Bearing Deposits 1,242,933 1,265,760 1,292,808 1,295,963 1,274,562 Interest Bearing Deposits 4,881,873 4,860,333 4,941,595 4,836,357 4,880,084 Common Equity 427,279 440,576 428,020 453,886 437,487

Loan Portfolio Composition --------------------------- Commercial and Financial 1,761,415 1,806,113 1,854,680 2,137,499 NA Commercial Real Estate Mortgage 923,710 931,368 957,421 993,937 NA Consumer 1,028,953 1,037,039 1,034,092 1,033,693 NA Credit Card 306,526 322,088 332,826 326,713 NA Sub-total 4,020,604 4,096,608 4,179,019 4,491,842 NA Residential Real Estate Mortgage 242,286 227,512 195,483 167,913 NA Total Loans and Leases 4,262,890 4,324,120 4,374,502 4,659,755 NA Allowance for Losses 71,888 67,151 67,664 67,846 NA Net Loans and Leases 4,191,002 4,256,969 4,306,838 4,591,909 NA

End of Period ---------------- Nonaccruing Loans 15,240 14,660 15,961 13,217 NA Restructured Loans 0 0 0 0 NA Other Real Estate 1,044 1,200 1,108 977 NA Total Nonperforming Assets 16,284 15,860 17,069 14,194 NA 90 Days Past Due & Accruing 20,499 19,044 20,432 16,683 NA Net Charge Offs 7,040 6,805 5,890 5,318 NA Intangible Assets 99,101 98,495 97,418 103,732 NA

Supplemental Information ------------------------ Hudson United Bancorp ($ in thousands) 1Q04 2Q04 3Q04 4Q04 Y-T-D --------- --------- --------- --------- --------- Condensed Income Statement --------------------- Interest Income 98,145 100,229 106,332 109,728 414,434 Interest Expense 20,254 22,132 26,311 30,085 98,782 Net Interest Income 77,891 78,097 80,021 79,643 315,652 Provision for Possible Loan and Lease Losses 5,600 4,750 4,500 0 14,850 Income from Landfill Investments 5,162 10,453 6,321 4,116 26,052 Total Non interest Income 35,563 39,092 44,351 37,321 156,327 Amortization of Intangibles Expense 1,244 1,223 1,222 1,222 4,911 Expense from Landfill Investments 5,882 7,497 5,188 4,741 23,308 Total Non interest Expense 66,569 69,790 75,884 71,463 283,706 Pre-tax Income 41,285 42,649 43,988 45,501 173,423 Provision for Income Taxes 10,303 10,990 11,450 12,597 45,340 Net Income 30,982 31,659 32,538 32,904 128,083 Fully-taxable Equivalent Adjustment 946 934 922 957 3,759

Performance --------------------- Return on Average Assets 1.54% 1.51% 1.46% 1.45% 1.49% Return on Average Equity 26.51% 26.58% 26.07% 25.12% 26.04% Basic Earnings Per Share $ 0.69 $ 0.71 $ 0.73 $ 0.73 $ 2.86 Diluted Earnings Per Share $ 0.69 $ 0.70 $ 0.72 $ 0.73 $ 2.85 Weighted Average Shares - Basic 44,808 44,651 44,700 44,921 44,717 Weighted Average Shares - Diluted 45,003 44,920 44,952 45,110 44,944 Net Interest Margin 4.25% 4.05% 3.90% 3.82% 4.00%

Capital Information --------------------- Tier 1 Leverage Ratio(1) 6.86% 6.76% 6.75% 6.69% NA Tier 1 Risk-Based Capital (1) 9.63% 9.31% 9.77% 9.58% NA Total Risk-Based Capital (1) 14.56% 13.91% 14.26% 13.85% NA Common Equity $492,751 $478,170 $516,925 $531,650 NA Common Shares Outstanding 44,826 44,948 44,954 44,983 NA Book Value Per Share (Common) $ 10.99 $ 10.64 $ 11.50 $ 11.82 NA

($ in thousands) 1Q03 2Q03 3Q03 4Q03 Y-T-D --------- --------- --------- --------- --------- Condensed Income Statement --------------------- Interest Income 102,410 101,365 94,314 96,040 394,129 Interest Expense 27,206 25,167 21,562 20,936 94,871 Net Interest Income 75,204 76,198 72,752 75,104 299,258 Provision for Possible Loan and Lease Losses 7,000 7,000 6,500 5,500 26,000 Income from Landfill Investments (2) - 2,404 4,312 4,453 11,169 Total Noninterest Income 26,883 29,606 35,487 41,069 133,045 Net Revenue 102,087 105,804 108,239 116,173 432,303 OREO Expense 188 65 198 94 545 Amortization of Intangibles Expense 1,056 1,055 1,077 1,152 4,340 Expense from Landfill Investments (2) - 3,598 5,349 6,001 14,948 Total Noninterest Expense 54,657 58,999 63,044 79,595 256,295 Pre-tax Income 40,430 39,805 38,695 31,078 150,008 Provision for Income Taxes 12,129 10,670 8,292 6,596 37,687 Net Income 28,301 29,135 30,403 24,482 112,321 Fully-taxable Equivalent Adjustment 1,020 1,046 1,072 956 4,094

Performance --------------------- Return on Average Assets 1.49% 1.46% 1.49% 1.21% 1.41% Return on Average Equity 26.86% 26.52% 28.18% 21.40% 25.67% Basic Earnings Per Share $ 0.63 $ 0.65 $ 0.68 $ 0.55 $ 2.51 Diluted Earnings Per Share $ 0.63 $ 0.65 $ 0.68 $ 0.55 $ 2.50 Weighted Average Shares - Basic 44,756 44,614 44,777 44,798 44,737 Weighted Average Shares - Diluted 44,966 44,829 44,994 44,974 44,892 Net Interest Margin 4.36% 4.18% 3.90% 4.05% 4.12%

Capital Information --------------------- Tier 1 Leverage Ratio 5.83% 5.87% 6.04% 6.36% NA Tier 1 Risk-Based Capital 8.14% 8.37% 8.72% 8.72% NA Total Risk-Based Capital 13.48% 13.58% 13.93% 13.67% NA Common Equity 428,077 454,252 457,720 458,190 NA Common Shares Outstanding 44,546 44,758 44,793 44,799 NA Book Value Per Share (Common) $ 9.61 $ 10.15 $ 10.22 $ 10.23 NA

(1) Capital ratios are preliminary numbers (2) Amounts have been reallocated in Q2 and Q3 to conform to current presentation

--30--KT/na*

CONTACT: Hudson United Bancorp Kenneth T. Neilson, 201-236-2631 James W. Nall, 201-236-2769

KEYWORD: CONNECTICUT PENNSYLVANIA NEW YORK NEW JERSEY INDUSTRY KEYWORD: BANKING EARNINGS DIVIDEND SOURCE: Hudson United Bancorp

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