Hudson City Bancorp profit plunges amid merger delay
Hudson City Bancorp’s first-quarter profit plunged by 86 percent from a year ago, a decline that the New Jersey-based bank blamed on a delay in its proposed merger with Buffalo-based M&T Bank.
Hudson City recorded profits of $5.9 million, compared with $42.5 million a year ago. The bank had suspended sales of securities during the first quarter, in anticipation of closing the deal with M&T on May 1. Instead, the process was delayed further, and Hudson City wasn’t able to resume securities sales by the end of the quarter.
The two banks pushed a deadline for completing the deal until Oct. 31, as they await federal regulators’ decision on whether to approve the merger.
“This has certainly been a challenging quarter for us,” Denis J. Salamone, Hudson City’s chairman and CEO, said in a statement. “The latest unexpected delay in the merger contributed to the first quarter’s weak earnings. We believe future earnings can be improved significantly in the short-term by a balance sheet restructuring and in the longer-term by execution of the other strategic initiatives. However, both of these actions are complicated by the pendency of the merger.”
Salamone said Hudson City remains committed to the merger.
Hudson City recorded earnings per share of 1 cent, compared with 9 cents a year ago. The bank’s board opted not to declare a dividend for the first quarter, in light of the weak results. Shares fell by 11 cents, or 1.16 percent, to $9.36 on Wednesday.
Delaware North pact ends
Delaware North has lost the concessions contract at Houston’s George Bush Intercontinental Airport and has notified Texas state officials of its intent to lay off its airport workers.
The Buffalo-based hospitality and food-service giant was replaced as the concessionaire at the airport, where it, a wholly owned subsidiary and a joint venture have held the food and beverage contract since 1998, according to the Houston Business Journal.
Delaware North told the Texas Workforce Commission that it will cut 333 jobs at the airport, with the cuts likely to begin when the company’s contract expires June 30.
The Houston City Council last month awarded $1.6 billion in 10-year contracts to WDFG North America, Paradies, Host International, SSP America Texas, Latrelle’s Galley and ATU Americas to provide food and beverage, specialty coffee, retail and duty-free items to the more than 53 million passengers who go through the city’s Bush and William P. Hobby airports each year.
On Monday, Delaware North won a five-year concessions contract for Qualcomm Stadium, home of the NFL’s San Diego Chargers.
Rand Capital posts increase
The value of Rand Capital Corp.’s investments inched up by less than 1 percent in the first quarter as the Buffalo venture capital firm pumped $2.7 million into two new investments and added to its stake in five other businesses.
The value of Rand’s investments in 31 businesses rose to $32.5 million, or $5.14 per share, at the end of March, up from $32.4 million, or $5.11 per share, at the end of December.
Rand finished the quarter with more than $7.9 million in cash. “Our portfolio companies are performing well, and we have the capital to support their growth,” said Rand President Allen F. “Pete” Grum.