Company says a payment of $12.6 million to settle an Internal Revenue Service examination of its 1998 through 2002 federal income tax returns is less than the reserves it had set aside for the purpose.Mahwah”s Hudson United Bancorp (NYSE: HU) said Friday it will pay $12.6 million to settle an Internal Revenue Service examination of its 1998 through 2002 federal income tax returns.
In a press release, the company said the payment will be less than the reserves it had set aside for the purpose, resulting in a $12 million, or $0.27 per share, increase in second-quarter net income.
Hudson, which operates Hudson United Bank with 200 branches in New England, said the IRS examined its federal income tax returns from 1998 to 2002, a period during which it completed 16 merger and acquisition deals. The IRS also reviewed merger termination payments totaling $92 million received from Dime Bancorp in 2000 and 2002, the bank said.
Hudson United had planned to acquire Dime, but abandoned the purchase in April 2000 under pressure from Dime shareholders. Dime made the payment after it agreed to be acquired by Seattle-based Washington Mutual.
At the close of trading, the company”s shares were up $0.29 to $34.85.