SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549

                                    FORM 10-K

    /X/ ANNUAL REPORT  PURSUANT TO SECTION 13  OR  15(d)
        OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE  REQUIRED]
        For the fiscal  year ended  December 31, 2000

                                       OR

    / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
        OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

          For the transition period from _____________ to _____________

                         Commission file number 1-08660

                              Hudson United Bancorp
 -------------------------------------------------------------------------------
             (Exact name of registrant as specified in its Charter)

      New Jersey                                     22-2405746
---------------------------------         --------------------------------------
(State or other jurisdiction             (I.R.S. Employer Identification No.)
of Incorporation or organization)

                              1000 MacArthur Blvd.
                               Mahwah, New Jersey               07430
                            ------------------------            -----
                 (Address of principal executive offices)     (Zip Code)

        Registrant's telephone number, including area code:(201)236-2600

           SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

                                      None

           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                           Common Stock, no par value
                           --------------------------
                                (Title of Class)

       Indicate by check mark whether the  registrant  (l) has filed all reports
       required  to be filed by Section 13 or 15(d) of the  Securities  Exchange
       Act of 1934 during the  preceding 12 months (or for such  shorter  period
       that the registrant was required to file such reports),  and (2) has been
       subject to such filing requirements for the past 90 days.   YES X      NO

       Indicate by check mark if  disclosure of  delinquent  filers  pursuant to
       Item  405 of  Regulation  S-K is not  contained  herein,  and will not be
       contained,  to the best of registrant's knowledge, in definitive proxy or
       information statements incorporated by reference in Part III of this Form
       10-K or any amendment to this Form 10-K. [X]

       The aggregate market value of the voting stock held by  non-affiliates of
       the Registrant, as of March 10, 2001 was $ TBD.

       The  number  of  shares  of  Registrant's  common  stock,  no par  value,
       outstanding as of March 10, 2001 was TBD.


<PAGE>


                              Hudson United Bancorp

                             Form 10-K Annual Report
                   For The Fiscal Year Ended December 31, 2000

                                     PART I

ITEM 1. BUSINESS
        --------

        (a) General Development of Business

Hudson United Bancorp ("HUB" or "Registrant" or the "Company") is a bank holding
company  registered  under the Bank Holding Company Act of 1956, as amended (the
"Bank Holding  Company  Act").  The Company was organized  under the laws of New
Jersey in 1982 by Hudson  United  Bank  ("Hudson  United" or the "Bank") for the
purpose of  creating a bank  holding  company  for Hudson  United.  The  Company
directly owns Hudson United,  HUBCO Capital Trust I, HUBCO Capital Trust II, JBI
Capital Trust I, Jefferson  Delaware  Inc., and AMFDCM,  Inc. In March 1999, the
former  Lafayette  American  Bank and Bank of the Hudson were merged into Hudson
United. In addition,  the shareholders of the Company on April 21, 1999 approved
an  amendment  to the  certificate  of  incorporation  to change the name of the
Company  from HUBCO,  Inc.  to Hudson  United  Bancorp.  The Company is also the
indirect owner, through Hudson United, of 13 subsidiaries.

Recent Change in Asset Size and Acquisition Activity of the Company
-------------------------------------------------------------------

The  Company's  total  assets at  December  31,  2000 were $6.8  billion,  which
represented  a  significant  reduction  in its total assets from the prior year,
which were $9.7 billion at December 31, 1999.

The  reduction  in total  assets  during the year ended  December  31,  2000 was
primarily  the result of the  Company's  decision to  implement a balance  sheet
deleveraging strategy,  under which the Company sold a significant amount of its
lower yielding investment  securities  portfolio and used the proceeds from such
sale to  reduce  its  borrowings.  The  Company  implemented  this  deleveraging
strategy to attempt to increase the  Company's  net interest  margin,  return on
assets,  return  on equity  and  earnings  per share  while  also  reducing  the
Company's exposure to changes in interest rates (See Management's Discussion and
Analysis).

The  reduction  in total  assets  during  2000 was also due in part to runoff in
certain loan portfolios and deposit  categories,  primarily related to runoff in
loans and deposits of institutions  acquired in the year ended December 31, 1999
and in prior  years.  The Company did not  complete  any  acquisitions  in 2000,
whereas it had been a frequent acquirer in 1999 and in prior years.

Proposed Merger with Dime Bancorp, Inc. ("Dime") which was Terminated in 2000
-----------------------------------------------------------------------------

HUB entered  into a merger  agreement  in 1999 with Dime,  a New York City based
financial  institution,  under which HUB and Dime were to merge with Dime as the
surviving  corporation in the merger  changing its name to Dime United  Bancorp,
Inc. ("Dime United").  Dime shareholders would have owned 56% of the outstanding
Dime United stock and HUB  shareholders  would have owned 44% of the outstanding
Dime United stock following the merger. The proposed merger with Dime would have
been the largest business combination in HUB's corporate history.

The closing of the proposed  merger was  initially  delayed,  and the merger was
eventually  terminated  in  2000,  following  the  announcement  by  North  Fork
Bancorporation of a hostile,  unsolicited  acquisition bid for Dime. The initial
delay and the eventual  termination  of the merger had a negative  impact on the
Company's growth and profitability.

Dime agreed to pay the Company a minimum merger  termination  fee of $15 million
on or before October 28, 2001. Dime also agreed to pay additional amounts to the
Company on or before October 28, 2001, in excess of the minimum termination fee,
up to a maximum  amount of $92  million in the event that Dime enters in certain
transactions  with  third  parties  involving  a sale by  Dime of a  substantial
portion of its assets,  a significant  subsidiary or Dime itself.  Management of
the Company  believes  that it is unlikely  that it will  receive  from Dime any
amounts in excess of the minimum  termination  fee payable.  HUB  recognized the
minimum  termination  fee payable from Dime as revenue when the proposed  merger
was  terminated  in 2000,  which revenue  recognized  was less than the expenses
incurred by the Company in the terminated merger.

<PAGE>

Acquisition Activity by the Company
-----------------------------------

The Company did not complete any acquisitions in 2000.

The Company  completed six  acquisitions in 1999,  however,  and had completed a
total of 31  acquisitions  from October 1990 to December  1999.  The Company had
increased  its total assets over this period from $550 million to $9.7  billion,
and had increased  its branch  network over this period from 15 branches to over
200 branches, primarily as a result of acquisitions.

On March 26,  1999,  the Company  completed  its  assumption  of $151 million of
deposit  liabilities  and  purchase  of a  retail  branch  office  in  Hartford,
Connecticut from First International Bank.

On May 20, 1999, the Company  acquired Little Falls Bancorp,  Inc. ("LFB") which
had  assets of  approximately  $341  million  and  operated  six  offices in the
Hunterdon and Passaic counties of New Jersey.

On October 22, 1999, the Company acquired the assets of Lyon Credit Corporation,
a $350 million asset finance company and subsidiary of Credit Lyonnais Americas.

On December 1, 1999, the Company completed its purchase of loans  (approximately
$148  million)  and other  financial  assets,  as well as  assumed  the  deposit
liabilities  (approximately $112 million) of Advest Bank and Trust. In addition,
a strategic partnership with Advest, Inc. was consummated on October 1, 1999, in
which Hudson United Bank became the exclusive  provider of banking  products and
services to the clients of Advest, Inc.

The above  acquisitions  in 1999 were accounted for under the purchase method of
accounting.

On November 30, 1999, the Company  completed its acquisition of JeffBanks,  Inc.
("Jeff"),  a  $1.8  billion  bank  holding  company  with  32  branches  located
throughout  the greater  Philadelphia  area of  Pennsylvania  and  Southern  New
Jersey.

On December 1, 1999, the Company  completed its  acquisition of Southern  Jersey
Bancorp ("SJB"),  a $425 million asset  institution with 17 branches in Southern
New Jersey.

The Jeff and SJB acquisitions in the year ended December 31, 1999 were accounted
for under the poolings-of-interests method of accounting.



<PAGE>


Summary of Acquisitions
-----------------------

The following chart summarizes the acquisitions  undertaken by the Company since
October 1990. The amounts shown as "Purchase  Price"  represent either cash paid
or the  market  value of  securities  issued by  Hudson  United  Bancorp  to the
shareholders or owners of the acquired entity:

<TABLE>
<CAPTION>

                                                                PURCHASE        DEPOSITS           LOANS
                                                                    PRICE       ASSUMED PURCHASED         BRANCHES
INSTITUTION                                                   (IN MILLIONS)    (IN MILLIONS)     (IN MILLIONS)     ACQUIRED
---------------------------------------------------------------------------------------------------------------------------
<S>                                                             <C>                  <C>               <C>             <C>
Mountain Ridge State Bank                                       $     0.3            $  47             $  12           1
Meadowlands National Bank                                             0.4               36                22           3
Center Savings and Loan                                               0.1               90                79           1
Irving Federal Savings and Loan                                       0.1              160                62           5
Broadway Bank and Trust                                               3.4              346                10           8
Pilgrim State Bank                                                    6.0              123                47           6
Polifly Federal Savings and Loan                                      6.2              105                 1           4
Washington Savings Bank                                              40.5              238               169           8
Shoppers Charge Accounts                                             16.3                -                56           -
Jefferson National Bank                                               9.7               85                42           4
Urban National Bank                                                  38.2              204                90           9
Growth Financial Corp                                                25.6              110               102           3
CrossLand Federal Savings Branches                                    3.0               60                 1           3
Lafayette American Bank & Trust                                     120.0              647               548          19
Hometown Bancorporation, Inc.                                        31.6              162                99           2
UST Bank, CT                                                         13.7               95                70           4
Westport Bancorp, Inc.                                               67.8              259               183           7
The Bank of Southington                                              26.7              122                85           2
Security National Bank & Trust                                       11.0               77                48           4
Poughkeepsie Financial                                              136.0              611               648          16
MSB Bancorp                                                         115.0              686               375          16
First Union Branches                                                 32.0              320                 1          23
Community Financial                                                  29.6              137                87           8
Dime Financial                                                      201.0              817               374          11
IBS Financial                                                       227.0              560               218          10
FNB Branch Purchase                                                   9.1              151                 -           1
Little Falls Bancorp, Inc.                                           55.0              234               153           6
Lyon Credit Corporation                                            not disclosed         -               350           -
Advest Bank & Trust Assets/Liabilities                                2.0              112               148           -
JeffBanks, Inc.                                                     371.0            1,380             1,429          32
Southern Jersey Bancorp                                              54.0              382               213          17

</TABLE>

The Company believes that its profitability  and its financial  condition may be
significantly  impacted by its acquisition  strategy and by the  consummation of
its acquisitions.

The Company intends to continue to seek  opportunities to acquire other banks or
financial  services  companies,  and to acquire  specific  loans or other assets
and/or  to assume  deposit  or other  liabilities  of other  banks or  financial
services  companies.  There  can  be no  assurance  that  the  Company  will  be
successful in making additional  acquisitions or, if additional acquisitions are
made, that these acquisitions will enhance the profitability of the Company.

Stock Repurchases by the Company in 2000
----------------------------------------

On  November  8,  1993,  the  Company's  Board  of  Directors  approved  a stock
repurchase  plan  and  authorized  management  to  repurchase  up to  10% of its
outstanding  common stock per year.  There is no assurance that the Company will
purchase the full amount  authorized in any year. The acquired  shares are to be
held in  treasury  and to be used for stock  option and other  employee  benefit
plans,  stock  dividends or in  connection  with the issuance of common stock in
pending or future acquisitions.

The Board of Directors  authorized an increase in the Company's stock repurchase
program in the year ended December 31, 2000,  following the previously mentioned
implementation  of the  deleveraging  strategy and the  termination  of the Dime
merger.  The  Company  repurchased  9.4  million  shares  of its own stock at an
aggregate cost of $193.3 million in 2000, which represented a much larger volume
of stock repurchases in that year than the Company had ever previously done. The
Company  repurchased 3.7 million shares of its own stock at an aggregate cost of
$121.4 million in 1999.

<PAGE>

Other Subsidiaries
------------------

The Company is the indirect owner or has been the indirect owner, through Hudson
United,  of other  subsidiaries  involved in data processing;  owning investment
securities and real estate assets; and in certain other activities.

In 1983, HUB formed a directly owned subsidiary  called HUB Financial  Services,
Inc., which was a wholly owned data processing subsidiary. In 1995, HUB sold 50%
of the stock in HUB  Financial  Services,  Inc. to United  National  Bank, a New
Jersey based institution.  HUB simultaneously made a capital contribution of the
remaining  50% to Hudson  United  Bank.  Simultaneously  with the sale of 50% to
United  National Bank, the name of HUB Financial  Services,  Inc. was changed to
United Financial  Services,  Inc.("UFS").  UFS ceased to provide data processing
and imaged check processing  services to both of its owner banks through October
1999. The Company  currently  outsources  such services to an independent  third
party provider of such data processing and other services. UFS is in the process
of dissolution.

In 1997,  Hudson  United  established  a directly  owned  subsidiary  called HUB
Mortgage Investments,  Inc. At December 31, 2000, $790 million of mortgage loans
and $83 million in mortgage-related  investment securities of Hudson United were
being managed by this subsidy, which operates as a real estate investment trust.

In 1987,  Hendrick  Hudson Corp. was  established.  As of December 31, 2000, $24
million of Hudson  United's  investment  portfolio is being  managed by Hendrick
Hudson Corp. of New Jersey.

In 1998, three additional investment companies were established:  NJ Investments
of Delaware,  Inc., LAB Investment Corp. of Delaware, Inc., and BOTH Investments
of Delaware,  Inc. In 1999, in conjunction with the merger of Lafayette American
Bank  and Bank of the  Hudson  into  Hudson  United,  LAB  Investment  Corp.  of
Delaware,  Inc.  and BOTH  Investments  of  Delaware,  Inc.  were merged into NJ
Investments  of Delaware,  Inc. As of December 31, 2000,  $323 million of Hudson
United's  investment  portfolio was being managed by NJ Investments of Delaware,
Inc.

In 1995,  the  Company  established  a  directly  owned  subsidiary  called  HUB
Investment  Services,  Inc.  This wholly  owned  subsidiary  provided  brokerage
services  through an agreement  with BFP  Financial  Partners,  Inc.  which is a
subsidiary  of Legg Mason,  Inc.  In August  1997,  the  Company  made a capital
contribution  of this  subsidiary  to Hudson  United.  In February of 1998,  the
agreement with BFP Financial Partners, Inc. was terminated.

Hudson United owns eight real estate  holding  companies  that engage in various
aspects of the real estate  business.  They are: Fair Street  Associates,  Inc.,
Markgard Realty, Inc., Plural Realty of Chappaqua, Inc., Riverdale Timber Ridge,
Inc., Plural Realty, Inc. Posabk, Inc., PSB Associates and PSB Building Corp.

Employee Relations
------------------

Hudson  United Bank enjoys a good  relationship  with its  employees  and is not
party to any collective bargaining agreements.

Regulatory Matters
------------------

The banking  industry is highly  regulated.  Statutory and  regulatory  controls
increase a bank holding  company's  cost of doing business and limit the options
of its management to deploy assets and maximize income.  Proposals to change the
laws and regulations governing the banking industry are frequently introduced in
Congress,  in the state  legislatures  and before the  various  bank  regulatory
agencies.  The  likelihood and timing of any changes and the impact such changes
might have on HUB cannot be determined at this time. The following discussion is
not  intended  to be a  complete  list of all the  activities  regulated  by the
banking laws or of the impact of such laws and  regulations on HUB or its banks.
It is intended only to briefly summarize some material provisions.

Capital Adequacy Guidelines and Deposit Insurance
-------------------------------------------------

The Federal Deposit  Insurance  Corporation  Improvement Act of 1991 ("FDICIA"),
required each federal banking agency to revise its risk-based  capital standards
to ensure that those  standards  take  adequate  account of interest  rate risk,
concentration  of credit risk and the risks of  non-traditional  activities.  In
addition,  pursuant  to FDICIA,  each  federal  banking  agency has  promulgated
regulations,  specifying  the levels at which a bank would be  considered  "well
capitalized",  "adequately  capitalized",   "undercapitalized",   "significantly
undercapitalized",  or  "critically  undercapitalized",   and  to  take  certain
mandatory and  discretionary  supervisory  actions based on the capital level of
the institution.

The regulations implementing these provisions of FDICIA provide that a bank will
be classified as "well  capitalized"  if it (i) has a total  risk-based  capital
ratio of at least 10.0 percent, (ii) has a Tier 1 risk-based capital ratio of at
least 6.0  percent,  (iii) has a Tier 1 leverage  ratio of at least 5.0 percent,
and  (iv)  meets  certain  other  requirements.  A bank  will be  classified  as
"adequately  capitalized" if it (i) has a total  risk-based  capital ratio of at
least 8.0 percent,  (ii) has a Tier 1 risk-based  capital  ratio of at least 4.0
percent,  (iii) has a Tier 1 leverage ratio of (a) at least 4.0 percent,  or (b)
at  least  3.0  percent  if the  institution  was  rated  1 in its  most  recent
examination, and (iv) does not meet the definition of "well capitalized". A bank
will be  classified  as  "undercapitalized"  if it (i)  has a  total  risk-based
capital  ratio of less than 8.0 percent,  (ii) has a Tier 1  risk-based  capital
ratio of less than 4.0 percent, or (iii) has a Tier 1 leverage ratio of (a) less
than 4.0 percent, or (b) less than 3.0 percent if the institution was rated 1 in
its  most  recent  examination.  A bank  will be  classified  as  "significantly
undercapitalized"  if it (i) has a total  risk-based  capital ratio of less than
6.0  percent,  (ii)  has a Tier 1  risk-based  capital  ratio  of less  than 3.0
percent,  or (iii)  has a Tier 1  leverage  ratio of less than 3.0  percent.  An
institution  will be classified  as  "critically  undercapitalized"  if it has a
tangible equity to total assets ratio that is equal to or less than 2.0 percent.
An insured depository  institution may be deemed to be in a lower capitalization
category if it receives an unsatisfactory examination.

As of December 31, 2000, the Bank's capital ratios exceed the requirements to be
considered a well capitalized institution under the FDIC regulations.

Bank holding  companies must comply with the Federal Reserve Board's  risk-based
capital guidelines. Under the guidelines, risk weighted assets are calculated by
assigning assets and certain  off-balance  sheet items to broad risk categories.
The total  dollar value of each  category is then  weighted by the level of risk
associated with that category. A minimum risk-based capital to risk based assets
ratio of 8.00% must be  attained.  At least one half of an  institution's  total
risk-based  capital must consist of Tier 1 capital,  and the balance may consist
of Tier 2, or supplemental  capital. Tier 1 capital consists primarily of common
stockholders'  equity along with  preferred or convertible  preferred  stock and
qualifying trust preferred securities,  minus goodwill.  Tier 2 capital consists
of an institution's  allowance for loan and lease losses, subject to limitation,
hybrid capital instruments and certain subordinated debt. The allowance for loan
and lease  losses which is  considered  Tier 2 capital is limited to 1.25% of an
institution's risk-based assets. As of December 31, 2000, HUB's total risk-based
capital ratio was 11.1%, consisting of a Tier 1 ratio of 7.6% and a Tier 2 ratio
of 3.5%. Both ratios exceed the requirements under these regulations.

In  addition,  the Federal  Reserve  Board has  promulgated  a leverage  capital
standard,  with which bank holding companies must comply. Bank holding companies
must  maintain a minimum Tier 1 capital to total  assets  ratio of 3%.  However,
institutions  which are not among the most  highly  rated by federal  regulators
must  maintain a ratio  100-to-200  basis  points  above the 3%  minimum.  As of
December  31,  2000,  HUB had a  leverage  capital  ratio of 5.96%.  HUB and its
subsidiary  bank  is  subject  to  various   regulatory   capital   requirements
administered  by  federal  banking  agencies.  Failure to meet  minimum  capital
requirements   can   initiate   certain   mandatory--and   possibly   additional
discretionary  actions by regulators  that, if  undertaken,  could have a direct
material effect on HUB's financial statements. Under capital adequacy guidelines
and  the  regulatory  framework  for  prompt  corrective  action,  HUB  and  its
subsidiary bank must meet specific capital guidelines that involve  quantitative
measures  of  assets,  liabilities,   and  certain  off-balance-sheet  items  as
calculated  under   regulatory   accounting   practices.   Capital  amounts  and
classifications  are also subject to qualitative  judgments by the regulators as
to  components,  risk  weightings,  and  other  factors.  Quantitative  measures
established by regulation to ensure capital  adequacy  require banks to maintain
minimum  amounts  and  ratios  of total and Tier 1 capital  (as  defined  in the
regulations)  to risk  weighted  assets (as  defined)  and of Tier 1 capital (as
defined) to average assets (as defined). Management believes, as of December 31,
2000, that HUB and its subsidiary bank meet all capital adequacy requirements to
which they are subject.

Hudson United is a member of the Bank  Insurance  Fund ("BIF") of the FDIC.  The
FDIC also maintains  another insurance fund, the Savings  Association  Insurance
Fund ("SAIF"),  which primarily covers savings and loan association deposits but
also covers  deposits  that are  acquired by a  BIF-insured  institution  from a
savings and loan association ("Oakar deposits").

The  Economic  Growth and  Regulatory  Reduction  Act of 1996 (the  "1996  Act")
included the Deposit  Insurance  Funds Act of 1996 (the "Funds Act") under which
the FDIC was required to impose a special assessment on SAIF assessable deposits
to recapitalize the SAIF. Under the Funds Act, the FDIC also charged assessments
for  SAIF  and BIF  deposits  in a 5 to 1  ratio  to pay  Financing  Corporation
("FICO") bonds until January 1, 2000, at which time the assessment became equal.
During  2000,  a rate of  approximately  2.06 basis  points  was  charged on all
deposits.   The  1996  Act  instituted  a  number  of  other  regulatory  relief
provisions.

<PAGE>

Restrictions on Dividend Payments, Loans, or Advances
-----------------------------------------------------

The holders of HUB's common stock are entitled to receive  dividends,  when, and
if declared by the Board of  Directors  of HUB out of funds  legally  available,
subject to the  preferential  dividend rights of any preferred stock that may be
outstanding from time to time.

The only statutory limitation is that such dividends may not be paid when HUB is
insolvent. Because funds for the payment of dividends by HUB come primarily from
the earnings of HUB's bank subsidiary,  as a practical  matter,  restrictions on
the ability of Hudson United to pay dividends act as  restrictions on the amount
of funds available for the payment of dividends by HUB.

Certain  restrictions  exist  regarding the ability of Hudson United to transfer
funds to HUB in the form of cash dividends,  loans or advances. New Jersey state
banking  regulations  allow for the payment of dividends in any amount  provided
that capital stock will be unimpaired and there remains an additional  amount of
paid-in  capital of not less than 50 percent of the capital stock amount.  As of
December 31, 2000 the maximum  amount  available  for  distribution  to HUB from
Hudson United was $525.9 million, subject to regulatory capital limitations.

HUB is also  subject to Federal  Reserve  Bank  ("FRB")  policies  which may, in
certain  circumstances,  limit its ability to pay  dividends.  The FRB  policies
require,  among other  things,  that a bank holding  company  maintain a minimum
capital  base.  The FRB would most likely seek to prohibit any dividend  payment
which would reduce a holding company's capital below these minimum amounts.

Under Federal Reserve regulations, Hudson United is limited as to the amounts it
may loan to its  affiliates,  including  HUB.  All such loans are required to be
collateralized by specific obligations.

Holding Company Supervision
---------------------------

Under the Bank Holding  Company Act, HUB may not acquire  directly or indirectly
more than 5 percent of the voting shares of, or substantially  all of the assets
of, any bank without the prior approval of the Federal Reserve Board.

In general,  the  Federal  Reserve  Board,  under its  regulations  and the Bank
Holding  Company Act,  regulates the  activities  of bank holding  companies and
non-bank  subsidiaries  of banks.  The  regulation  of the  activities of banks,
including bank subsidiaries of bank holding  companies,  generally has been left
to the authority of the supervisory  government agency,  which for Hudson United
is the  FDIC  and the New  Jersey  Department  of  Banking  and  Insurance  (the
"NJDOBI").

Interstate Banking Authority
----------------------------

The Riegle-Neale  Interstate  Banking and Branching  Efficiency Act of 1994 (the
"Interstate  Banking  and  Branching  Act")  enables a bank  holding  company to
acquire banks in states other than its home state regardless of applicable state
law.

The Interstate  Banking and Branching Act also authorizes  banks to merge across
state lines, thereby creating interstate branches.  Under the legislation,  each
state had the  opportunity to "opt out" of this provision,  thereby  prohibiting
interstate  branching  in such  states.  Furthermore,  a state may "opt in" with
respect to de novo branching,  thereby permitting a bank to open new branches in
a state in which  the bank  does not  already  have a  branch.  Without  de novo
branching,  an  out-of-state  bank can  enter  the state  only by  acquiring  an
existing  bank. The vast majority of states have allowed  interstate  banking by
merger but have not authorized de novo branching.

Recent Legislation
------------------

The Gramm-Leach-Bliley Financial Modernization Act of 1999 became effective in
early 2000.  The Modernization Act:

o    allows bank holding  companies  meeting  management,  capital and Community
     Reinvestment  Act Standards to engage in a  substantially  broader range of
     nonbanking  activities than  previously  permissible,  including  insurance
     underwriting  and making  merchant  banking  investments  in commercial and
     financial companies; if a bank holding company elects to become a financial
     holding  company,  it files a  certification,  effective  in 30  days,  and
     thereafter  may  engage in certain  financial  activities  without  further
     approvals;

o    allows insurers and other financial service companies to acquire banks;

o    removes various restrictions previously applied to bank holding company
     ownership of securities firms and mutual fund advisory companies; and

o    establishes  the overall  regulatory  structure  applicable to bank holding
     companies that also engage in insurance and securities operations.

The Modernization Act also modified other financial laws, including laws related
to financial privacy and community reinvestment.

Additional  proposals to change the laws and  regulations  governing the banking
and financial  services industry are frequently  introduced in Congress,  in the
state  legislatures  and  before  the  various  bank  regulatory  agencies.  The
likelihood and timing of any such changes and the impact such changes might have
on HUB cannot be determined at this time.

Cross Guarantee Provisions and Source of Strength Doctrine
----------------------------------------------------------

Under the Financial  Institutions  Reform,  Recovery and Enforcement Act of 1989
("FIRREA"),  a depository institution insured by the FDIC can be held liable for
any loss  incurred  by, or  reasonably  expected to be incurred  by, the FDIC in
connection with (I) the default of a commonly controlled FDIC-insured depository
institution  in  danger  of  default.  "Default"  is  defined  generally  as the
appointment of a conservatory  or receiver and "in danger of default" is defined
generally as the  existence of certain  conditions,  including a failure to meet
minimum capital requirements,  indicative that a "default" is likely to occur in
the absence of  regulatory  assistance.  These  provisions  have  commonly  been
referred to as FIRREA's "cross guarantee" provisions.  Further, under FIRREA the
failure to meet capital  guidelines  could  subject a banking  institution  to a
variety of enforcement  remedies  available to federal  regulatory  authorities,
including the termination of deposit insurance by the FDIC.

According to Federal Reserve Board policy,  bank holding  companies are expected
to act as a source of financial  strength to each  subsidiary bank and to commit
resources to support each such subsidiary. This support may be required at times
when  a  bank  holding  company  may  not  be  able  to  provide  such  support.
Furthermore, in the event of a loss suffered or anticipated by the FDIC - either
as a result of default of a bank  subsidiary  of the  Company or related to FDIC
assistance  provided  to the  subsidiary  in danger of  default - the other bank
subsidiaries  of the  Company may be assessed  for the FDIC's  loss,  subject to
certain exceptions.

                  (b) Industry Segments

                  The Registrant has one industry segment -- commercial banking.

                  (c) Narrative Description of Business

HUB exists  primarily  to hold the stock of its  subsidiaries.  At December  31,
2000,  HUB had six  directly-owned  subsidiaries  including  Hudson  United.  In
addition,   HUB,   through   Hudson  United,   indirectly   owns  13  additional
subsidiaries. The historical growth of, and regulations affecting, each of HUB's
direct and  indirect  subsidiaries  is  described  in Item 1(a) above,  which is
incorporated herein by reference.

HUB is a legal entity separate from its subsidiaries. The stock of Hudson United
is HUB's principal asset. Dividends from Hudson United are the primary source of
income  for  HUB.  As  explained  above  in  Item  1(a),  legal  and  regulatory
limitations  are imposed on the amount of dividends that may be paid by the Bank
to HUB.

At December 31, 2000, HUB, through its subsidiaries,  had total deposits of $5.8
billion,  total loans of $5.3  billion  and total  assets of $6.8  billion.  HUB
ranked 3rd among  commercial banks and bank holding  companies  headquartered in
New Jersey in terms of asset size at December 31, 2000.

Hudson  United  is a full  service  commercial  bank  and  offers  the  services
generally performed by commercial banks of similar size and character, including
imaged checking,  savings, and time deposit accounts, 24-hour telephone banking,
internet banking, trust services,  cash management services, safe deposit boxes,
insurance,  stock,  bond, and mutual fund sales,  secured and unsecured personal
and  commercial  loans,  residential  and  commercial  real  estate  loans,  and
international  services  including  import and export  needs,  foreign  currency
purchases and letters of credit.  The Bank's  deposit  accounts are  competitive
with those of other banks and include  money  market  accounts  and a variety of
interest-bearing  transaction  accounts. In the lending area, the Bank primarily
engages in commercial lending, real estate lending,  consumer lending and credit
card programs.

Hudson United offers a variety of trust services.  At December 31, 2000,  Hudson
United's  Trust  Department  had  approximately  $758.1  million of assets under
management or in its custodial control.

There are numerous  commercial banks  headquartered in New Jersey,  Connecticut,
Pennsylvania  and New York,  which  compete in the market areas  serviced by the
Company.  In  addition,  large  out-of-state  banks  compete for the business of
residents and businesses  located in the Company's  primary market.  A number of
other  depository  institutions  compete  for the  business of  individuals  and
commercial  enterprises  including savings banks, savings and loan associations,
brokerage houses,  financial subsidiaries of other industries and credit unions.
Other financial institutions,  such as mutual funds, consumer finance companies,
factoring companies, and insurance companies,  also compete with the Company for
both loans and deposits.  Competition for depositors'  funds,  for  creditworthy
loan customers and for trust business is intense.  Despite  intense  competition
with institutions commanding greater financial resources, the Bank has been able
to attract deposits and extend loans.

Hudson  United has focused on becoming an integral  part of the  communities  it
serves. Officers and employees are incented to meet the needs of their customers
and to meet the needs of the local communities served.

The Company had 1,899 full-time equivalent employees as of December 31, 2000.

                  (d) Financial Information about foreign and
                      ---------------------------------------
                           domestic operations and export sales.
                           ------------------------------------

                           Not Applicable

                  (e) Executive Officers of the Registrant

The following table sets forth certain  information as to each executive officer
of the Company who is not a director.

<TABLE>
<CAPTION>

Name, Age and                                    Officer of
Position with                                   the Company
the Company                                        Since                     Principal Position
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                  <C>                     <C>

John F. McIlwain, 62                                 1991                    Executive Vice President and
                                                                             Chief Credit Officer

Thomas R. Nelson, 56                                 1994                    Executive Vice President;
                                                                             President, Shoppers Charge Accounts Co.

D. Lynn Van Borkulo-Nuzzo, 51                        1988                    Executive Vice President and
                                                                             Corporate Secretary

Thomas J. Shara, 43                                  1994                    Executive Vice President and
                                                                             Senior Loan Officer

Susan M. Staudmyer, 43                               1998                    Executive Vice President,
                                                                             Retail Banking

William R. Coda, 43                                  2000                    Executive Vice President,
                                                                             Human Resources and
                                                                             Professional Development

James Mayo, 61                                       2000                    Executive Vice President,
                                                                             Operations and Technology

William A. Houlihan, 45                              2001                    Executive Vice President, and
                                                                             Chief Financial Officer

</TABLE>

<PAGE>



                  (f)  Statistical Disclosure Required Pursuant to
                      Securities Exchange Act, Industry Guide 3

The  statistical  disclosures for a bank holding  company  required  pursuant to
Industry  Guide 3 are  contained on the  following  pages of this Report on Form
10K.


<PAGE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS
         -----------------------------------

         Statements Regarding Forward-Looking Information

This form 10-K,  both in the  Management  Discussion & Analysis  and  elsewhere,
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.  These include,  but are not limited to, changes in interest
rates,  changes in economic  conditions,  deposit and loan growth, and loan loss
provisions; changes in relationships with customers, failure to realize expected
cost  savings or  revenue  enhancements  from  changes  in  business  models and
acquisitions,  and the effects of legal and regulatory  provisions applicable to
the Company and its competitors.  Actual results may differ  materially from the
results discussed in these  forward-looking  statements.  The Company assumes no
obligation for updating any such forward-looking statements at this time.

         Recent Change in Asset Size and Acquisition Activity of the Company

The  Company  had total  assets  at  December  31,  2000 of $6.8  billion  which
represented  a  significant  reduction  in its total assets from the prior year,
which were $9.7 billion at December 31, 1999.

The  reduction  in total  assets  during the year ended  December  31,  2000 was
primarily  the result of the  Company's  decision to  implement a balance  sheet
deleveraging strategy,  under which the Company sold a significant amount of its
lower yielding investment  securities  portfolio and used the proceeds from such
sale to  reduce  its  borrowings.  The  Company  implemented  this  deleveraging
strategy  to attempt to increase  the  Company's  net margin,  return on assets,
return on equity and  earnings  per share  while  also  reducing  the  Company's
exposure to changes in interest rates.

The  reduction  in total  assets  during  2000 was also due in part to runoff in
certain loan portfolios and deposit  categories,  primarily related to runoff in
loans and deposits of institutions  acquired in the year ended December 31, 1999
and in prior  years.  The Company did not  complete  any  acquisitions  in 2000,
whereas it had been a frequent acquirer in prior years.

         Proposed Merger with Dime Bancorp,  Inc.  ("Dime") which was Terminated
         in 2000

HUB entered  into a merger  agreement  in 1999 with Dime,  a New York City based
financial  institution,  under which HUB and Dime were to merge with Dime as the
surviving  corporation in the merger  changing its name to Dime United  Bancorp,
Inc. ("Dime United").  Dime shareholders would have owned 56% of the outstanding
Dime United stock and HUB  shareholders  would have owned 44% of the outstanding
Dime United stock following the merger. The proposed merger with Dime would have
been the largest business combination in HUB's coporate history.

The closing of the proposed  merger was  initially  delayed,  and the merger was
eventually  terminated  in  2000,  following  the  announcement  by  North  Fork
Bancorporation of a hostile,  unsolicited  acquisition bid for Dime. The initial
delay and the eventual  termination  of the merger had a negative  impact on the
Company's growth and profitability.

Dime agreed to pay the Company a minimum merger  termination  fee of $15 million
on or before October 28, 2001. Dime also agreed to pay additional amounts to the
Company on or before October 28, 2001, in excess of the minimum termination fee,
up to a maximum amount of $92 million in the event that Dime enters into certain
transactions  with  third  parties  involving  a sale by  Dime of a  substantial
portion of its assets, a significant subsidiary, Dime itself, or the acquisition
of a certain  percentage of Dime's  outstanding common stock. HUB recognized the
minimum  termination  fee payable from Dime as revenue when the proposed  merger
was terminated in 2000, which revenue was less than the expenses incurred by the
Company in the terminated merger.

         Acquisition Summary

The Company began its acquisition  program in the fall of 1990. Since that time,
the Company has  completed 31  acquisitions.  Through  these  acquisitions,  the
Company  has grown from a $550  million  asset  banking  company to a  community
banking  franchise.  The  acquisition  program  has  been  utilized  to  achieve
efficiencies and to distribute the cost of new products and technologies  over a
larger asset base.  It is the  Company's  philosophy  that  acquisitions  should
become  accretive to earnings  within a short time frame,  generally  within one
year. The financial  results of certain of these  acquisitions  are difficult to
measure other than on an as-reported  basis each quarter because stock for stock
acquisitions  accounted  for  using  the   pooling-of-interests   method  change
historical results from those actually reported by the Company.

No acquisitions were announced or completed by the Company in 2000.

The Company consummated six acquisitions in 1999. On March 26, 1999, the Company
completed its purchase of $151 million in deposits and a retail branch office in
Hartford,  Connecticut  from First  International  Bank.

On May 20, 1999, the Company acquired Little Falls Bancorp, Inc. ("LFB"),  which
had  assets of  approximately  $341  million  and  operated  six  offices in the
Hunterdon and Passaic  counties of New Jersey.

On October 22, 1999, the Company acquired the assets of Lyon Credit Corporation,
a $350 million asset finance company and subsidiary of Credit Lyonnais Americas.

On December 1, 1999, the Company acquired the loans (approximately $148 million)
and  other  financial  assets,  as  well  as  assumed  the  deposit  liabilities
(approximately $112 million) of Advest Bank and Trust. In addition,  a strategic
partnership  with Advest,  Inc.  was  consummated  on October 1, 1999,  in which
Hudson  United  Bank  became the  exclusive  provider  of banking  products  and
services to the clients of Advest,  Inc. That  agreement was  terminated in 2000
due to Advest's recent acquisition by a third party.

The above 1999  acquisitions  were  accounted  for under the purchase  method of
accounting  and, as such,  the assets and  earnings of the  acquired  entity are
included in the Company's consolidated results only from the date of acquisition
and thereafter.

<PAGE>

On November 30, 1999, the Company  completed its acquisition of JeffBanks,  Inc.
("Jeff"),  a  $1.8  billion  bank  holding  company  with  32  branches  located
throughout the greater Philadelphia area of Pennsylvania and Southern Jersey.

On December 1, 1999, the Company  completed its  acquisition of Southern  Jersey
Bancorp ("SJB"),  a $425 million asset  institution with 17 branches in Southern
New  Jersey.

The Jeff and SJB acquisitions were accounted for using the  pooling-of-interests
accounting  method and,  accordingly,  the  statements  for periods prior to the
acquisitions have been restated to include these  institutions and their results
of operations.

         Special Charges Summary

In 2000,  1999  and  1998,  the  Company  incurred  one-time  charges  ("special
charges") as detailed below. Further details relative to the special charges are
discussed in the "Noninterest  Income" and "Noninterest  Expenses" sections that
follow.

<PAGE>

<TABLE>
<CAPTION>

                                  Years Ended December 31,
                                  ------------------------
 Special Charges
 (In Thousands)                   2000       1999      1998
 -------------------------------------------------------------
<S>                              <C>       <C>       <C>
 Merger related and
   restructuring charges         $15,004   $32,031   $ 69,086
 Nonrecurring Operating
   Charges                         7,000       --         --
 Writedown of assets held
   for sale                          --         --     23,303
 Investment Security losses       63,619     5,162        663
 Special provision for loan
   losses                            --     33,000        --
                               ---------------------------------
Total special charges pre-tax    $85,623  $ 70,193   $ 93,052
                                 =======   =======    =======

Total special charges after-tax  $58,472  $ 47,854   $ 63,634
                                 =======   =======     ======

</TABLE>

         Results of Operations for the Years
         Ended December 31, 2000,  1999 and 1998

The Company  reported net income of $49.8 million and fully diluted earnings per
share of $0.92 in 2000.  Excluding  special  charges,  operating  earnings  were
$108.3  million and fully  diluted  earnings per share were $2.00 for 2000.  The
Company had net income of $69.3 million and fully diluted  earnings per share of
$1.18 in 1999. Excluding special charges, operating earnings were $117.2 million
and fully  diluted  earnings  per share were $2.00 in 1999.  The Company had net
income of $26.8 million and fully  diluted  earnings per share of $0.44 in 1998.
Excluding  special  charges,  operating  earnings  were $90.4  million and fully
diluted  earnings  per share were $1.49 for 1998.

Return on average assets was 0.61% for 2000, 0.75% for 1999, and 0.31% for 1998.
Excluding  special  charges,  return on average assets was 1.32% for 2000, 1.27%
for 1999 and 1.04% for 1998.  Return on  average  equity  was  10.72%  for 2000,
11.95% for 1999 and 4.14% for 1998. Excluding special charges, return on average
equity was 23.30% for 2000, 20.20% for 1999 and 13.97% for 1998.

The  financial  results in years in which  acquisitions  occur are  difficult to
measure other than on an as-reported  basis because  acquisitions  accounted for
under the  pooling-of-interests  method  change  historical  results  from those
actually  reported by the Company.  On an as-reported  basis,  excluding special
charges,  the  return on average  assets was 1.32% for 2000,  1.41% for 1999 and
1.46% for 1998 and return on average equity was 23.30% for 2000, 23.26% for 1999
and 21.94% for 1998.


<PAGE>

<TABLE>
<CAPTION>

         Average Balances, Net Interest Income, Yields, and Rates
                                                                   Years Ended December 31,
---------------------------------------------------------------------------------------------------------------------------------
For the Years Ending                    2000                               1999                               1998
                           --------------------------------  ---------------------------------  ---------------------------------
                             Average               Yield/      Average               Yield/       Average               Yield/
                             Balance    Interest    Rate       Balance   Interest     Rate        Balance   Interest     Rate
                           --------------------------------  ---------------------------------  ---------------------------------
<S>                        <C>         <C>         <C>        <C>        <C>          <C>        <C>        <C>          <C>
Assets
------
Interest-bearing
  deposits with banks     $        -   $      -       -     $   17,441  $  1,132      6.49%    $   34,475  $  1,864      5.41%
Federal funds sold             1,170        111    6.31%        76,672     4,980      6.50%       202,794    10,809      5.33%
Securities-taxable         2,098,809    133,921    6.38%     3,328,654   204,937      6.16%     2,873,677   183,632      6.39%
Securities-tax exempt(1)      36,217      2,643    7.30%        85,184     7,249      8.51%       112,716     9,448      8.38%
Loans (2)                  5,470,763    475,672    8.69%     5,136,467   432,041      8.41%     4,923,410   424,359      8.62%
                          ----------   --------    -----    ----------  --------      -----    ----------  --------      -----
Total Earning Assets      $7,607,559   $612,347    8.10%    $8,644,418  $650,339      7.52%    $8,147,072  $630,112      7.73%



Cash and due from banks      243,729                           273,926                            251,799
Allowance for loan losses    (97,500)                          (79,095)                           (84,605)
Premises and equipment       129,502                           115,924                            112,609
Other assets                 324,094                           292,968                            294,697
                          ----------                        ----------                        -----------
Total Assets              $8,207,384                        $9,248,141                        $ 8,721,572
------------              ==========                        ==========                        ===========

Liabilities and Stockholders' Equity
------------------------------------
 Interest-bearing
   transaction accounts   $1,029,708   $ 23,035    2.24%    $1,199,059  $ 24,125      2.01%   $  1,365,426 $ 32,070       2.35%
 Savings accounts          1,504,151     38,506    2.56%     1,405,688    28,184      2.00%      1,328,052   31,121       2.34%
 Time deposits             2,192,996    112,290    5.12%     2,821,338   138,426      4.91%      3,106,134  165,144       5.32%
                           ---------   --------    -----    ----------  --------      -----   ------------ --------       -----
 Total Interest-Bearing
   Deposits                $4,726,855  $173,831    3.68%    $5,426,085  $190,735      3.52%   $5,799,612   $228,335       3.94%
 Borrowings                 1,575,481    93,564    5.94%     1,722,512    88,902      5.16%      859,372     47,907       5.57%
 Long-term debt               253,882    21,188    8.35%       257,218    21,873      8.50%      235,886     20,231       8.58%
                           ----------  --------    -----    ----------  --------      -----   ----------   --------       ------
 Total Interest-Bearing
   Liabilities             $6,556,218  $288,583    4.40%    $7,405,815  $301,510      4.07%   $6,894,870   $296,473       4.30%
 Demand deposits            1,174,655                        1,170,135                         1,079,508
 Other liabilities             11,651                           91,953                           100,343
 Stockholders' equity         464,860                          580,238                           646,851
                           ----------                        ---------                        ----------
   Total Liabilities and
   Stockholders' Equity    $8,207,384                       $9,248,141                        $ 8,721,572
   ---------------------   ==========                       ==========                        ===========
 Net Interest Income                   $323,764                         $348,829                           $333,639
 -------------------                   ========                         ========                           ========
 Net Interest Margin (3)                           4.26%                              4.04%                              4.10%
 -----------------------                           =====                              =====                              =====


</TABLE>

(1) The tax equivalent  adjustments  for the years ended December 31, 2000, 1999
    and 1998 were $925, $2,245 and $3,289, respectively,  and are based on a tax
    rate of 35.00% and an assumed cost of funds 3.73%.

(2) The tax equivalent  adjustments  for the years ended December 31, 2000, 1999
    and 1998 were $3,113,  $3,518 and $1,500,  respectively,  and are based on a
    tax rate of 35.00%. Average loan balances include nonaccrual loans and loans
    held for resale.

(3) Represents tax equivalent  net interest  income divided by  interest-earning
    assets.

<PAGE>


The following table presents the relative contribution of changes in volumes and
changes in rates to changes in net  interest  income for the periods  indicated.
The change in interest income and interest expense  attributable to the combined
impact of both volume and rate has been allocated  proportionately to the change
due to volume and the change due to rate (in thousands):

<TABLE>
<CAPTION>

Changes in Taxable Equivalent Net Interest Income-Rate/Volume Analysis

                                          Increase/(Decrease)                  Increase/(Decrease)
                                    --------------------------------   -------------------------------------
For the Years Ending December 31,           2000 over 1999                        1999 over 1998
                                    --------------------------------   -------------------------------------
                                     Volume       Rate       Total         Volume         Rate      Total
---------------------------------------------------------------------  -------------------------------------
<S>                                <C>         <C>        <C>            <C>          <C>        <C>
Loans                              $ 29,050    $14,581    $ 43,631        $18,079     $ 10,397)  $  7,682
Securities-taxable                  (78,355)     7,339     (71,016)        28,211       (6,906)    21,305
Securities-tax exempt                (3,575)    (1,031)     (4,606)        (2,341)         142     (2,199)
Federal funds sold                   (4,869)         0      (4,869)        (7,810)        1,81     (5,829)
Interest bearing deposits            (1,131)         0      (1,131)        (1,052)         320       (732)
                                   ----------------------------------  -------------------------------------
Total interest income              $(58,880)   $20,889    $(37,991)       $35,087     $(14,860)  $ 20,227
                                   ----------------------------------  -------------------------------------

Interest bearing transaction         (3,793)     2,703      (1,090)        (3,650)      (4,295)    (7,945)
accounts
Savings                               2,521      7,801      10,322          1,744       (4,681)    (2,937)
Time deposits                       (32,171)     6,035     (26,136)       (14,507)     (12,211)   (26,718)
Short-term borrowings                (8,734)    13,396       4,662         44,794       (3,799)    40,995
Long-term debt                         (279)      (405)       (684)         1,815         (173)     1,642
                                    ---------------------------------  -------------------------------------
Total interest expense              $(42,456)  $29,530    $(12,926)       $30,196    $ (25,159)   $ 5,037
                                    ---------------------------------  -------------------------------------
Net Interest Income                 $(16,424) $ (8,641)   $(25,065)       $ 4,891      $10,299   $ 15,190
                                    =================================  =====================================

</TABLE>

<PAGE>


Net Interest Income

Net interest  income is the  difference  between the interest  earned on earning
assets and the interest  paid on interest  bearing  liabilities.  The  principal
earning  assets  are the  loan  portfolio,  comprised  of  commercial  loans  to
businesses,  mortgage loans to businesses and individuals,  consumer loans (such
as car loans, home equity loans, etc.) and credit card loans; and the investment
securities  portfolio.  The securities  portfolio is invested  primarily in U.S.
Government Agency securities,  U.S. Government Agency mortgage-backed securities
and  mortgage-related  securities.  Deposits and borrowings not required to fund
loans and other  assets  are  invested  primarily  in U.S.  Government  and U.S.
Government Agency  securities.  The principal  interest bearing  liabilities are
deposit accounts and borrowings.

Net  interest  income is  affected by a number of factors  including  the level,
pricing,  and  maturity  of  earning  assets and  interest-bearing  liabilities,
interest rate fluctuations,  asset quality and the amount of noninterest-bearing
deposits and capital. In the following discussion,  interest income is presented
on a fully taxable-equivalent  basis ("FTE"). Fully taxable-equivalent  interest
income restates  reported  interest income on tax-exempt loans and securities as
if such interest were taxed at the statutory Federal income tax rate of 35%.

Net  interest  income on a FTE basis was $323.8  million  for 2000  compared  to
$348.8  million  for 1999 and  $333.6  million  for 1998.  The  decrease  in net
interest income in 2000 compared to 1999 was due to a $1.04 billion  decrease in
average  interest-earning  assets,  partially  offset by an  increase in the net
interest  margin of 22 basis  points.  The decrease in average  interest-earning
assets was mainly due to a lower average  volume of investment  securities.  The
improvement  in net interest  income in 1999  compared to 1998 was due to a $497
million increase in average  interest-earning  assets, partially offset by a six
basis point decline in the net interest margin.

Net Interest Margin

Net interest  margin is computed by dividing net interest  income on a FTE basis
by average  interest-earning assets. The Company's net interest margin was 4.26%
in 2000 compared to 4.04% in 1999 and 4.10% in 1998. The 22 basis point increase
in net interest margin in 2000 from 1999 was due mainly to an improvement in the
asset  mix,  caused by an  increase  in average  loans and a  decrease  in lower
yielding investment securities,  offset in part by higher interest rates paid on
deposits and  borrowings.  The six basis point decline in net interest margin in
1999 from 1998 was  primarily  due to an increase in lower  yielding  investment
securities.

Noninterest Income

Noninterest income,  excluding security gains and losses and loss on assets held
for sale was $89.7  million for 2000 and $89.9  million for 1999.  The amount in
1999 was an increase of 26.8% over the $70.9 million  reported in 1998. In 2000,
deposit account service fees had grown 7% which was offset by declines in credit
card and non-deposit  related fee income. The increase for 1999 compared to 1998
was due to growth in Shoppers  Charge fees (the  Company's  private label credit
card  department)  and mortgage  department  and increased  sales of alternative
investment products. Noninterest income, excluding security gains and losses and
loss on assets held for sale, as a percentage of total net revenue (net interest
income plus non interest  income  excluding  gains and losses on securities  and
assets held for sale) was 22% in 2000, 21% in 1999 and 18% in 1998.  Included in
noninterest  income for 2000 is a $63.6 million pre-tax special charge,  related
to the  Company's  balance  sheet  deleveraging  program.

Noninterest Expenses

Noninterest expense,  excluding special charges,  decreased to $228.0 million in
2000 from $239.3  million in 1999.  The decline in expense was due  primarily to
cost savings related to the JeffBanks and Southern Jersey Bancorp  acquisitions.
The increase in expenses to $239.3  million in 1999 from $232.4  million in 1998
was due to the higher cost of supporting the Company's expanding business lines.

Salary and benefit expense was $89.9 million in 2000, $102.7 million in 1999 and
$107.2  million in 1998.  The  decline  in 2000  compared  to 1999,  and in 1999
compared  to  1998,  was due to  efficiencies  realized  in  staff  and  support
functions and consolidation of benefit plans.

Equipment expense was $20.4 million in 2000 as compared to $14.7 million in 1999
and $11.3  million in 1998.  The higher  expense in 2000 when  compared  to 1999
resulted from improvements in the Company's technological infastructure.

Outside  services expense was $43.9 million in 2000 as compared to $48.8 million
in 1999 and $34.8 million in 1998.  The decrease in 2000 from 1999 resulted from
a $4.5 million  decrease in professional  fees. The increase in 1999 compared to
1998 reflected higher expenses incurred to support business expansion, primarily
related to Shoppers Charge.

Amortization  of  intangibles  expense  increased to $16.2  million in 2000 from
$14.9  million  in 1999 and  from  $12.1  million  in 1998.  The  increases  are
attributable to the additional  goodwill  established for the  acquisitions  and
branch purchases described previously.

Merger related and restructuring costs were $15.0 million and other nonrecurring
operating  charges were $7.0 million in 2000.  Merger related and  restructuring
costs include the  approximate  amounts of $4.8 million for the  recognition  of
severance  benefits  and  consulting  agreements,  $2.0  million  for  stay  pay
obligations to current employees, $2.0 million for payments and reserves for the
settlements of pre-existing litigation at acquired institutions and $4.2 million
for the  recognition of  obligations  for which the bank will not receive future
benefits.  The balance of the expenses are comprised of building  writedowns and
miscellaneous  expenses  including  search  fees,  advisor  expenses,  and other
miscellaneous  items.  The nonrecurring  operating  charges include $3.7 million
related to the change to a new  outsource  service  provider,  $2.0  million for
planned  branch   consolidation,   and  $1.3  million  for  the  recognition  of
obligations for which the Bank will not recover future benefits.

Merger related and  restructuring  costs were $32.0 million in 1999. These costs
include  $12.6  million  for  payout  and  accruals  for  employment  contracts,
severance and other employee  related costs,  $3.9 million for branch  closings,
fixed asset  disposition  and other  occupancy  related costs,  $5.6 million for
technical  support for system conversion and early termination of system related
contracts,  $1.8 million for legal and accounting  professional  services,  $4.1
million for  financial  advisor  costs,  $2.0 million  provision  for other real
estate owned and $2.0 million for other merger related expenses.

Merger  related and  restructuring  costs were $69.1  million in 1998.  The 1998
costs include $29.5  million for payout and accruals for  employment  contracts,
severance and other employee  related costs,  $13.2 million for branch closings,
fixed asset  disposition,  and other occupancy related costs,  $13.6 million for
professional services, and $12.8 million for other merger related expenses.

Federal Income Taxes

The income tax provision for Federal and state taxes was approximately 35.0% for
2000,  36.0% for 1999 and 38.8% for 1998.  The lower  effective tax rate in 2000
and  1999  when  compared  to 1998 was due  primarily  to  higher  nondeductible
merger-related expenses in 1998.

Financial Condition

Total  assets at December  31,  2000 were $6.8  billion,  a decrease  from total
assets at December 31, 1999 of $9.7  billion.  This  overall  decrease in assets
resulted  primarily from a $2.4 billion decrease in investment  securities and a
$402 million decrease in loans. The decrease in investment  securities  resulted
from the  implementation  of the  deleveraging  strategy.  The decrease in loans
related primarily to runoff in loans of institutions  acquired in 1999 and prior
years.

Total liabilities at December 31, 2000 were $6.4 billion,  a decrease from total
liabilities at December 31, 1999 of $8.9 billion. This overall decrease resulted
primarily from a $2.0 billion decrease in borrowings and a $700 million decrease
in deposits.  The decrease in borrowings  related to the deleveraging  strategy.
The decrease in deposits related primarily to runoff in certificates of deposits
and other deposit accounts of institutions acquired in 1999 and in prior years.

Total  Stockholders'  Equity was $368.5 million at December 31, 2000, a decrease
of $150.7  million from  Stockholders'  Equity of $519.2 million at December 31,
1999. The decline in  Stockholders'  Equity of $150.7 million  resulted from the
Company's  repurchase in treasury  shares of $193.3  million and payment of cash
dividends of $49.4 million,  which were partially  offset by net income of $49.8
million and an increase in equity of $35.8 million resulting from a reduction in
the  unrealized  loss  on  the  Company's  available  for  sale  (AFS)  security
portfolio.

Securities Held to Maturity and Securities Available for Sale

The securities portfolio serves as a source of liquidity,  earnings, and a means
of managing  interest  rate risk.  Consequently,  the  securities  portfolio  is
managed over time in response to changes in market  conditions  and loan demand.
The  securities  portfolio  comprised  14% of the total assets of the Company at
December  31, 2000 and 35% of the total  assets of the  Company at December  31,
1999.

The Company's  securities  portfolio consists  primarily of U.S.  government and
agency  securities  as  well  as  U.S.  government  agency  mortgage-backed  and
mortgage-related securities.


<PAGE>

     The following  tables  summarize the  composition  of the  portfolios as of
     December 31, 2000 and 1999 (in thousands):

<TABLE>
<CAPTION>

                                         2000                                                1999
                    ------------------------------------------------  ---------------------------------------------------
                                  Gross    Unrealized  Estimated                     Gross   Unrealized     Estimated
                    Amortized     -------------------    Market        Amortized     ------------------      Market
                      Cost        Gains     (Losses)     Value           Cost        Gains     (Losses)       Value
-------------------------------------------------------------------------------------------------------------------------
<S>                   <C>           <C>        <C>       <C>          <C>             <C>      <C>           <C>
Available for Sale
   Portfolio
   ---------
U.S. Government      $  31,839      $  37    $   (48)    $  31,828    $   87,332    $   196    $  (303)      $   87,225
U.S. Government
   Agencies              3,500          -          -         3,500       350,040         85     (7,595)         342,530
Mortgage-backed
   securities          241,356        320     (3,642)      238,034     2,167,606      1,431    (48,880)       2,120,157
States and
   Political             1,516         41          -         1,557         3,118         12        (10)           3,120
   subdivisions
Other debt               3,754          -       (193)        3,561        47,128          4     (1,813)          45,319
   securities
Federal Home Loan
    Bank stock         105,924          -          -       105,924       125,405          -           -         125,405
Other equity            43,092        279     (5,048)       38,323        88,421      1,932     (9,807)          80,546
   securities
                   ------------------------------------------------- ----------------------------------------------------
                     $ 430,981      $ 677    $(8,931)    $ 422,727    $2,869,050    $ 3,660    $(68,408)     $2,804,302
                   ================================================= ====================================================

<CAPTION>

                                         2000                                               1999
                     ----------------------------------------------   -------------------------------------------------
                                   Gross   Unrealized   Estimated                     Gross    Unrealized   Estimated
                      Amortized    ------------------     Market       Amortized      -------------------    Market
                        Cost       Gains     (Losses)     Value           Cost        Gains     (Losses)      Value
-----------------------------------------------------------------------------------------------------------------------
<S>                   <C>           <C>        <C>       <C>          <C>             <C>      <C>           <C>
Held to Maturity
   Portfolio
   ---------
U.S. Government      $  24,199      $   -     $  (69)   $ 24,130       $  24,195   $       -   $   (253)   $  23,942
U.S. Government
   Agencies             38,229        488        (45)     38,672          45,960         201       (636)      45,525
Mortgage-backed
   securities          406,518        543     (7,845)    399,216         467,540         220    (19,967)     447,793
States and
   Political            51,246        187        (41)     51,392          24,500          26       (575)      23,951
   subdivisions
Other debt                   -          -          -           -              29           -          -           29
   securities        ----------------------------------------------   -------------------------------------------------
                     $ 520,192    $ 1,218   $ (8,000)   $513,410       $ 562,224   $     447   $(21,431)   $ 541,240
                     ==============================================   =================================================

</TABLE>

<PAGE>

<TABLE>
<CAPTION>
         Loan Portfolio Distribution of Loans by Category
                  As of December 31,
-------------------------------------------------------
 (Dollars in             2000        1999        1998
thousands)           ----------------------------------
<S>                  <C>         <C>         <C>
Loans secured by
  real estate:

  Residential
   mortgage loans    $1,433,697  $1,639,578  $1,739,054

  Mortgages held
   for sale                   -       9,073      14,600

  Residential home
   equity loans         338,164     357,941     230,587

  Commercial
   mortgage loans       920,397   1,024,844     978,040
                    -----------------------------------
                    $ 2,692,258 $ 3,031,436  $2,962,281
                    -----------------------------------
Commercial and
  industrial loans:
  Secured by
   real estate          280,544     275,411     233,536
  Other               1,610,627   1,490,837   1,004,149
                    -----------------------------------
                    $ 1,891,171 $ 1,766,248  $1,237,685
                    -----------------------------------
Credit cards        $   158,922 $   209,863  $  107,331
Other loans to
  individuals           535,172     672,034     578,346
                    -----------------------------------
Total Loan
  Portfolio         $ 5,277,523 $ 5,679,581  $4,885,643
                    ===================================

</TABLE>

Total loans  decreased by $403.3  million to $5.27  billion at December 31, 2000
from $5.68 billion at December 31, 1999.  Residential  and  commercial  mortgage
loans, and secured and unsecured  individual  loans decreased,  while commercial
and  industrial  loans  increased.  The decrease in  residential  mortgage loans
accounted  for over 50% of the  overall  decrease in the loan  portfolio.  These
loans were $1.43 billion at December 31, 2000 and represented 27% of total loans
compared to 29% of total loans at December 31, 1999.  The Company  continued its
strategy of reducing its percentage of lower yielding residential mortgage loans
arising from the thrift institutions acquired in 1998. Commercial mortgage loans
decreased by $104.4 million to 920.3 million at December 31, 2000.  Home equity,
credit  card and  loans to  individuals  decreased  by $207.6  million  to $1.17
billion at December 31, 2000.  Commercial and industrial  loans increased $124.9
million to $1.9 billion at year-end 1999.


<PAGE>

         Asset Quality

The Company's  principal earning assets are its loans,  which are made primarily
to businesses and individuals  located in New Jersey, New York,  Connecticut and
Pennsylvania, the areas in which the Company's branches are located. Inherent in
the lending  business is the risk of  deterioration  in a borrower's  ability to
repay loans under  existing loan  agreements.  Other risk  elements  include the
amount of nonaccrual and past-due loans, the amount of potential  problem loans,
industry or geographic loan  concentrations,  and the level of OREO that must be
managed and disposed of.

Nonaccruing  loans include  commercial loans and commercial  mortgage loans past
due for payment 90-days or more or deemed uncollectable. Residential real estate
loans are generally  placed on nonaccrual  status after 180 days of delinquency.
Consumer  loans are charged off after 120 days and credit card loans are charged
off after 180 days.  Any loan may be put on  nonaccrual  status  earlier  if the
Company has concern about the future  collectability  of the loan or its ability
to return to current status.

Nonaccrual real estate  mortgage loans are principally  loans in the foreclosure
process   secured  by  real  estate,   including   single  family   residential,
multi-family,  and commercial properties.  Nonaccruing consumer credit loans are
loans to  individuals.  Excluding the credit card  receivables,  these loans are
principally secured by automobiles or real estate.

Renegotiated  loans are loans which were  renegotiated as to the term or rate or
both to assist the borrower after the borrower has suffered  adverse  effects in
financial  condition.  Terms are  designed to fit the ability of the borrower to
repay and the  Company's  objective of obtaining  repayment.  The Company has no
loans which are considered renegotiated as of December 31, 2000.

OREO consists of properties on which the Bank has foreclosed or has taken a deed
in lieu of the loan obligation. OREO properties are carried at the lower of cost
or fair value at all times, net of estimated costs to sell. The cost to maintain
the  properties  during  ownership  and any  further  declines in fair value are
charged to current  earnings.  The Company has been  successful  in disposing of
OREO properties,  including those acquired in acquisitions. OREO, including OREO
classified  in "Assets  Held for Sale" on the  balance  sheet,  amounted to $4.3
million at December  31,  2000,  $3.9  million at December  31,  1999,  and $8.2
million at December 31, 1998. The overall decline in 2000 from 1998 reflects the
Company's continuing efforts to dispose of OREO properties.


<PAGE>


         Nonperforming Assets

Nonperforming  assets were $62.2  million at December 31, 2000 compared to $53.1
at December 31, 1999 and $60.0  million at December  31,  1998.  The increase at
December  31,  2000 from  December  31,  1999 was mainly due to an  increase  in
non-performing  commercial and industrial loans. The decline at December 1, 1999
from December 31, 1998 was mainly the result of the Company's  continuing effort
to reduce the level of  nonperforming  assets.

The amount of  interest  income on  nonperforming  loans  which  would have been
recorded  had these  loans  continued  to perform  under  their  original  terms
amounted to $4.5  million in 2000,  $3.2  million in 1999,  and $8.0  million in
1998. The amount of interest income recorded on such loans for each of the years
was $0.6 million in 2000,  $0.4 million in 1999,  and $0.7 million in 1998.  The
Company has no outstanding  commitments to advance additional funds to borrowers
whose loans are in a nonperforming status.

Measures to control and reduce the level of nonperforming  loans are continuing.
Efforts are made to identify  slow paying loans and  collection  procedures  are
instituted. After identification,  steps are taken to understand the problems of
the borrower  and to work with the borrower  toward  resolving  the problem,  if
practicable. Continuing collection efforts are a priority for the Company.


<PAGE>


The following table summarizes the Company's  nonperforming  assets at the dates
indicated (in thousands):

<TABLE>
<CAPTION>

                                                                              December 31,
Nonperforming Assets (including assets held for sale)               2000          1999           1998
-----------------------------------------------------------------------------------------------------------
<S>                                                                <C>           <C>            <C>
Nonaccrual Loans                                                   $ 57,898      $ 46,352       $ 46,178
Renegotiated Loans                                                        -         2,751          5,632
                                                               --------------------------------------------
   Total Nonperforming Loans                                       $ 57,898       $49,103       $ 51,810
Other Real Estate Owned                                               4,318         3,948          8,151
                                                               --------------------------------------------
   Total Nonperforming Assets                                      $ 62,216       $53,051       $ 59,961
                                                               ============================================
Ratios:
   Nonaccrual Loans to Total Loans                                     1.10%         0.82%          0.95%
   Nonperforming Assets to Total Assets                                0.91          0.55           0.67
   Allowance for Loan Losses to Nonaccrual Loans                        164           213            165
   Allowance for Loan Losses to Nonperforming Loans                     164           201            147

</TABLE>

<PAGE>


The following  table shows the loans past due 90 days or more and still accruing
and applicable asset quality ratios:

<TABLE>
<CAPTION>

                                                 As of December 31,
                                         -------------------------------
                  (Dollars in thousands)      2000      1999      1998
                  ------------------------------------------------------
                  <S>                      <C>       <C>       <C>
                  Commercial & industrial  $ 4,293   $ 3,004   $ 3,048
                  Real estate mortgages     13,080    13,085     9,739
                  Consumer credit            4,034     3,011     4,263
                  Credit card                8,371     4,139     4,211
                                         -------------------------------
                    Total Loans
                    Past-Due 90-Days or
                    More and Still
                    Accruing              $ 29,778  $ 23,239  $ 21,261
                                         ===============================
                    As a percent of
                    Total Loans              0.56%     0.41%     0.44%
                    As a percent of
                    Total Assets             0.44%     0.24%     0.24%

</TABLE>

<PAGE>


         Allowance for Possible Loan Losses

The  provision for possible loan losses was $24.0 million for 2000 compared with
$52.2 million in 1999 and $35.6 million in 1998.  The decrease in 2000 from 1999
was due to a $33.0 million  special  provision taken in 1999 to conform the loan
reserve policies of Jeff and SJB to that of the Company. The decreased provision
in 1999 when compared to 1998 (excluding the special provision of $33 million in
1999) was primarily due to higher  provisions  taken to cover loans arising from
acquired companies.

The  determination  of the adequacy of the  Allowance  for Possible  Loan Losses
("the Allowance") and the periodic provisioning for estimated losses included in
the consolidated  financial statements is the responsibility of management.  The
evaluation  process is undertaken on a monthly basis.  The methodology  employed
for  assessing  the  adequacy of the  Allowance  consists of the  following  two
criteria:

1.   The  establishment  of  reserve  amounts  for all  specifically  identified
     criticized loans, including those arising from business combinations,  that
     have been designated as requiring  attention by management's  internal loan
     review program.

2.   The  establishment  of reserves for pools of homogenous  types of loans not
     subject to specific  review,  including 1-4 family  residential  mortgages,
     consumer loans, and credit card accounts, based upon historical loss rates.

An allocation of the allowance for the  non-criticized  loans in each  portfolio
and for all off-balance  sheet exposures is determined based upon the historical
average loss experience of those portfolios.

Consideration  is also given to the changed  risk profile  brought  about by the
aforementioned business combinations, customer knowledge, the results of ongoing
credit quality monitoring processes, the adequacy and expertise of the Company's
lending staff,  underwriting policies,  loss histories,  delinquency trends, the
cyclical  nature of economic and business  conditions and the  concentration  of
real estate related loans located in the Northeastern part of the United States.
Since many of the loans depend upon the sufficiency of collateral as a secondary
source of repayment,  any adverse trend in the real estate  markets could affect
underlying  values  available to protect the Company from loss.  Other  evidence
used to determine the amount of the Allowance and its components are as follows:

- regulatory and other examinations

- the amount and trend of criticized loans

- actual losses

- peer comparisons with other financial institutions

- economic data  associated with the real estate market in the Company's area of
  operations

- opportunities  to dispose of marginally  performing  loans for cash
  considerations

Based upon the process employed and giving  recognition to all attendant factors
associated  with the loan  portfolio,  management  considers  the  Allowance for
Possible  Loan Losses to be adequate at December  31, 2000.

The Allowance as a percentage of total loans  outstanding  was 1.80% at December
31,  2000,  1.74% at  December  31,  1999 and 1.56% at December  31,  1998.  The
Allowance as a percentage of nonperforming  loans was 164% at December 31, 2000,
201% at December 31, 1999 and 147% at December 31, 1998.


<PAGE>


The  following is a summary of the activity in the  allowance  for possible loan
losses, by loan category, for the years indicated (in thousands):

<TABLE>
<CAPTION>

         Allowance for Possible Loan Losses
                                                                   Years Ending December 31,
                                                  -------------------------------------------------------------
                                                              2000                1999                1998
                                                  -------------------------------------------------------------
  <S>                                                    <C>                 <C>                 <C>
  Amount of Loans Outstanding at End of Year             $ 5,277,523         $ 5,679,581         $ 4,885,643
                                                  =============================================================
  Daily Average Amount of Loans Outstanding              $ 5,470,763         $ 5,136,467         $ 4,923,410
                                                  =============================================================
  Allowance for Possible Loan Losses
  ----------------------------------
  Balance at beginning of year                             $  98,749           $  76,043           $  85,230
  Loans charged off:
      Real estate mortgages                                    2,847              13,657              11,207
      Commercial and Industrial                                8,778              10,388              10,034
      Consumer Credit                                         23,781              24,012              22,083
      Other                                                        -                   -                   -
      Writedown of assets held for sale (1)                        -                   -               9,521
                                                  -------------------------------------------------------------
                                                  -------------------------------------------------------------
         Total loans charged off                            $ 35,406           $  48,057           $  52,845
                                                  -------------------------------------------------------------
  Recoveries:
      Real estate mortgages                                      772               1,902                 988
      Commercial and Industrial                                1,822               1,962               1,629
      Consumer Credit                                          5,243               6,065               3,437
      Other                                                        -                   -                  47
                                                  -------------------------------------------------------------
         Total recoveries                                   $  7,837           $   9,929           $   6,101
                                                  -------------------------------------------------------------
         Net loans charged off                              $ 27,569           $  38,128           $  46,744
                                                  -------------------------------------------------------------
  Provision for possible loan losses                        $ 24,000           $  52,200           $  35,607
  Allowance of acquired companies                                  -               8,634               1,950
                                                  -------------------------------------------------------------
  Balance at end of year                                    $ 95,180           $  98,749           $  76,043
                                                  =============================================================
  Provision for possible loan losses as a
    percentage of average loans outstanding                     0.44%               1.02%               0.72%
  Net charge offs as a percentage of average
    loans outstanding                                           0.50%               0.74%               0.95%
  Allowance for possible loan losses as a
      percentage of loans outstanding at year end               1.80%               1.74%               1.56%

</TABLE>

(1) The  writedown of assets held for sale  pertains to the planned  disposal of
    $54 million of nonaccrual loans and OREO properties.


<PAGE>

The  following is the  allocation  of the  allowance for possible loan losses by
loan category (in thousands):

<TABLE>
<CAPTION>

Allocation of the Allowance for Possible Loan Losses
----------------------------------------------------

                                                    As of December 31,
                            --------------------------------------------------------------------
                                    2000                    1999                  1998
                            --------------------------------------------------------------------
                                       Category               Category               Category
                                       Percent                Percent                Percent
                                       of                     of                     of
                            Allowance  Loans(%)    Allowance  Loans(%)    Allowance  Loans(%)
------------------------------------------------------------------------------------------------
<S>                          <C>           <C>     <C>            <C>     <C>            <C>
Real estate mortgages        $23,245       44.4    $ 25,484       46.5    $ 23,868       60.6
Commercial and industrial     42,355       36.2      43,974       31.8      18,493       25.3
Consumer Credit               28,278       19.4      24,895       21.7      20,650       14.1
Unallocated                    1,302                  4,396                 13,032
                            --------------------------------------------------------------------
Total                        $95,180      100.0    $ 98,749      100.0    $ 76,043      100.0
                            ====================================================================

</TABLE>


<PAGE>


         Deposits

As of December 31, 2000,  Hudson had 99 branch offices in New Jersey,  36 branch
offices  in New York  State,  42 branch  offices in  Connecticut,  and 25 branch
offices  in  Pennsylvania,  for a total of 202  branches.

The  following  table  summarizes  the deposit base at the dates  indicated  (in
thousands):

<TABLE>
<CAPTION>
                                       December 31,
                           2000            1999            1998
                        ------------------------------------------
 <S>                    <C>        <C>        <C>
 Noninterest-
 bearing deposits       $1,162,677      $1,231,478      $1,214,521
 NOW/MMDA deposits       1,080,641       1,145,398       1,249,772
 Savings deposits        1,441,073       1,528,033       1,367,117
 Time deposits           2,128,876       2,550,436       2,941,826
                         ------------------------------------------
 Total Deposits         $5,813,267      $6,455,345      $6,773,236
                         ==========================================

</TABLE>


Although  total  deposits  declined at December 31, 2000 from December 31, 1999,
there was a favorable  change in the mix, as noninterest  bearing and lower cost
deposits  declined by $220 million while higher cost time  deposits  declined by
$422 million.

Approximately  20%  of the  Company's  deposits  were  in  non-interest  bearing
accounts,  43% in NOW, MMDA and savings accounts, and 37% in time deposits as of
December 31, 2000.

         Liquidity

Liquidity is a measure of the Company's ability to meet the needs of depositors,
borrowers,  and  creditors at a reasonable  cost and without  adverse  financial
consequences.  The Company has several liquidity measurements that are evaluated
on a frequent  basis.  The Company has adequate  sources of liquidity  including
Securities  Available for Sale,  Federal funds lines,  and the ability to borrow
funds from the Federal Home Loan Bank and Federal Reserve discount  window.  The
management of balance sheet volumes,  mixes, and maturities  enables the Company
to maintain adequate levels of liquidity.

         Capital

Capital  adequacy is a measure of the amount of capital  needed to support asset
growth,  absorb  unanticipated  losses,  and provide safety for depositors.  The
regulators establish minimum capital ratio guidelines for the banking industry.

The following table sets forth the regulatory  minimum capital ratio guidelines,
the capital ratio  guidelines  an  institution  must meet to be considered  well
capitalized and the current capital ratios of the Company.

<TABLE>
<CAPTION>

                      Regulatory        Well
                        Minimum       Capitalized       Company
                        Capital         Capital         Capital
                        Ratios          Ratios          Ratios
                        ------          ------          ------
<S>                         <C>             <C>          <C>
Tier 1 Leverage Ratio       4%              5%            6.0%
Tier 1 Risk-Based
   Capital Ratio            4%              6%            7.6%
Total Risk-Based Capital    8%             10%           11.1%

</TABLE>

<PAGE>

At December 31,  2000,  1999,  and 1998,  the Company  exceeded  all  regulatory
capital  guidelines  including  those for a  well-capitalized  institution  (See
Footnote 23 to the Consolidated Financial Statements).

On September 3, 1998,  the Company paid a 3% stock  dividend and  increased  its
regular  quarterly cash dividend to $0.25 per common share. On December 1, 1999,
the Company paid a 3% stock dividend and  maintained its regular  quarterly cash
dividend at $0.25 per common share.  On December 1, 2000, the Company paid a 10%
stock dividend and  maintained its regular  quarterly cash dividend at $0.25 per
common share.  The dividend payout ratio,  based on cash dividends per share and
diluted  earnings per share, was 101% for 2000 compared to 75% for 1999 and 175%
in 1998.  The higher  ratios in 2000 and 1998 when  compared to 1999 were due to
lower net income  resulting  from the  higher  special  charges in those  years.
Excluding special charges,  the payout ratio would have been 47% in 2000, 44% in
1999 and 52% in 1998.

In January 1994, the Company issued $25.0 million aggregate  principal amount of
subordinated  debentures  which  mature in 2004 and bear  interest  at 7.75% per
annum payable semi-annually.

In March 1996, the Company issued $23.0 million  aggregate  principal  amount of
subordinated  debentures  which  mature in 2006 and bear  interest  at 8.75% per
annum  payable  semi-annually.  These notes are  redeemable at the option of the
Company,  in whole or in part,  at any time after April 1, 2001, at their stated
principal amount plus accrued interest, if any.

In September  1996, the Company issued $75.0 million of  subordinated  debt. The
subordinated  debentures bear interest at 8.20% per annum payable  semi-annually
and mature in 2006.

Proceeds  of the  above  issuances  were  used for  general  corporate  purposes
including  providing  Tier I capital to the  subsidiary  bank. The debt has been
structured  to  comply  with the  Federal  Reserve  Bank  rules  regarding  debt
qualifying as Tier 2 capital at the Company.

In January  1997,  the Company  placed $50.0  million in  aggregate  liquidation
amount of 8.98% Capital  Securities due February 2027, using HUBCO Capital Trust
I, a statutory  business  trust  formed under the laws of the State of Delaware.
The sole  asset of the  trust,  which is the  obligor  on the  Series B  Capital
Securities,  is $51.5  million  principal  amount of 8.98%  Junior  Subordinated
Debentures due 2027 of the Company.  The 8.98% Capital securities are redeemable
by the  company  on or after  February  1,  2007,  or  earlier  in the event the
deduction of related interest for federal income taxes is prohibited,  treatment
as Tier 1 capital is no longer permitted or certain other contingencies arise.

In February  1997,  the Company  placed $25.0  million in aggregate  liquidation
amount of 9.25% Capital  Securities due March 2027, using JBI Capital Trust I, a
statutory  business  trust formed  under the laws of the State of Delaware.  The
sole  asset  of  the  trust,  which  is the  obligor  on the  Series  B  Capital
Securities,  is $25.3  million  principal  amount of 9.25%  Junior  Subordinated
Debentures  due 2027 of the Company.  The 9.25% Trust  preferred  securities are
callable by the Company on or after March 31, 2002,  or earlier in the event the
deduction of related interest for federal income taxes is prohibited,  treatment
as Tier I capital is no longer permitted or certain other contingencies arise.

In June 1998, the Company placed $50.0 million in aggregate  liquidation  amount
of 7.65%  Capital  Securities  due June 2028,  using HUBCO  Capital  Trust II, a
statutory  business  trust formed  under the laws of the State of Delaware.  The
sole  assets  of the  trust,  which  is the  obligor  on the  Series  B  Capital
Securities,  is $51.5  million  principal  amount of 7.65%  Junior  Subordinated
Debentures due 2028 of the Company.  The 7.65% Capital securities are redeemable
by the company on or after June 15, 2008,  or earlier in the event the deduction
of related interest for federal income taxes is prohibited,  treatment as Tier 1
capital is no longer permitted or certain other contingencies arise.

The  three  issues  of  capital  securities  have  preference  over  the  common
securities under certain  circumstances  with respect to cash  distributions and
amounts  payable on  liquidation  and are  guaranteed  by the  Company.  The net
proceeds of the offerings are being used for general  corporate  purposes and to
increase  capital  levels of the  Company  and its  subsidiaries.  Except  for a
minimal  amount,  the  securities  qualify as Tier I capital  under the  capital
guidelines of the Federal Reserve.

At the end of the reporting period,  there were no known uncertainties that will
have or that are  reasonably  likely to have a material  effect on the Company's
liquidity or capital resources.

<PAGE>

         Liquidity and interest rate sensitivity management

The primary  objectives  of  asset/liability  management  are to provide for the
safety of depositor and investor funds, assure adequate  liquidity,  maintain an
appropriate    balance   between    interest-sensitive    earning   assets   and
interest-sensitive  liabilities and enhance earnings.  Interest rate sensitivity
management ensures that the Company maintains  acceptable levels of net interest
income  throughout a range of interest rate  environments.  The Company seeks to
maintain  its  interest  rate  risk  within  a range  that it  believes  is both
manageable and prudent, given its capital and income generating capacity.

Liquidity risk is the risk to earnings or capital that would arise from a bank's
inability  to meet  its  obligations  when  they  come  due,  without  incurring
unacceptable  losses.  Liquidity  management is a planning  process that ensures
that the Company has ample funds to satisfy operational needs, projected deposit
outflows,  repayment of borrowing and loan  obligations and the projected credit
needs of its customer base. The Company uses several  measurements in monitoring
its  liquidity  position.  In  addition,  the Company has a number of  borrowing
facilities with banks,  primary broker  dealers,  the Federal Home Loan Bank and
Federal  Reserve that are or can be used as sources of liquidity  without having
to sell assets to raise cash.  At December 31,  2000,  the  Company's  liquidity
ratios exceed all minimum standards set forth by internal policies.

The Company has an asset/liability management committee, which manages the risks
associated with the volatility of interest rates and the resulting impact on net
interest income, net income and capital. The management of interest rate risk at
the  Company  is  performed   by:  (i)  analyzing  the  maturity  and  repricing
relationships  between interest earning assets and interest bearing  liabilities
at specific points in time (`GAP') and (ii) "income  simulation  analysis" which
analyzes the effects of interest rate changes on net interest income, net income
and capital over  specific  periods of time and  captures the dynamic  impact of
interest rate changes on the Company's mix of assets and liabilities.

The  following  table  presents  the GAP position of the Company at December 31,
2000.  In preparing  this table,  management  has  anticipated  prepayments  for
mortgage-backed securities and mortgage-related securities according to standard
industry  prepayment  assumptions  in effect at  year-end.  Total loans  include
adjustable rate loans,  which are placed according to repricing  periods.  Fixed
rate  residential  mortgages  are  assumed  to prepay at rates  consistent  with
historical  average housing  turnover rates.  Money market deposits and interest
bearing  demand  accounts have been included in the due within 90 days category.
Assets  with  daily  floating  rates  are  included  in the due  within  90 days
category.  Assets  and  liabilities  are  included  in the table  based on their
maturities,  expected cash repayments or period of first  repricing,  subject to
the foregoing  assumptions.

In analyzing its GAP  position,  although all time periods are  considered,  the
Company emphasizes the next twelve-month period. An institution is considered to
be  liability  sensitive,   or  having  a  negative  GAP,  when  the  amount  of
interest-bearing  liabilities  maturing or repricing  within a given time period
exceeds the amount of its  interest-earning  assets also  repricing  within that
time period.  Conversely, an institution is considered to be asset sensitive, or
having a  positive  GAP,  when the  amount of its  interest-bearing  liabilities
maturing or  repricing  is less than the amount of its  interest-earning  assets
also maturing or repricing during the same period.  Theoretically,  in a falling
interest  rate  environment,  a negative GAP should result in an increase in net
interest  income,  and in a rising interest rate  environment  this negative GAP
should adversely  affect net interest  income.  The converse would be true for a
positive GAP.

However,  shortcomings are inherent in a simplified GAP analysis that may result
in changes in interest rates affecting net interest income more or less than the
GAP  analysis  would  indicate.   For  example,   although  certain  assets  and
liabilities may have similar maturities or periods to repricing,  they may react
in different degrees to changes in market interest rates. Furthermore, repricing
characteristics of certain assets and liabilities may vary substantially  within
a given time period. In the event of a change in interest rates,  prepayment and
early withdrawal levels could also deviate  significantly  from those assumed in
calculating GAP. Also, GAP does not permit analysis of how changes in the mix of
various assets and liabilities and growth rate  assumptions  impact net interest
income.


<PAGE>

The  following  table shows the Gap position of the Company at December 31, 2000
(in thousands):

<TABLE>
<CAPTION>

         GAP Analysis
                                          Due Within    Due Between
                                           One Year       One and       Due Over   Noninterest
                                            or Less      Five Years    Five Years    Bearing       Total
-------------------------------------------------------------------------------------------------------------
<S>                                      <C>            <C>           <C>          <C>         <C>
ASSETS

Fed Funds Sold                           $    18,755    $         -    $       -    $       -   $   18,755
Securities                                   419,870        316,048      215,256      (8,255)      942,919
Total Loans                                2,505,895      1,995,546      731,692       44,390    5,277,523
Noninterest Bearing Assets                         -              -            -      578,029      578,029
                                         --------------------------------------------------------------------
Total Assets                             $ 2,944,520    $ 2,311,594    $ 946,948    $ 614,164   $6,817,226
Percent of Total Assets                        43.19%         33.91%       13.89%        9.01%      100.00%

SOURCE OF FUNDS

Interest-Bearing Deposits                $ 2,934,088    $ 1,401,605    $ 314,897            -   $4,650,590
Borrowings                                   344,503          1,452       12,906            -      358,861
Long-Term Debt                                     -         25,000      223,300            -      248,300
Noninterest Bearing Deposits                 383,684        699,931       79,062            -    1,162,677
Other Liabilities                                  -              -            -       28,325       28,325
Stockholders' Equity                               -              -            -      368,473      368,473
                                         --------------------------------------------------------------------
Total Source Of Funds                    $ 3,662,275    $ 2,127,988    $ 630,165    $ 396,798   $6,817,226
Percent of Total Source of Funds               53.72%         31.21%        9.24%        5.82%      100.00%
=============================================================================================================
Interest Rate Sensitivity Gap            $  (717,755)       183,606      316,783    $  17,366   $       (0)
-------------------------------------------------------------------------------------------------------------
Cumulative Interest Rate Sensitivity Gap $  (717,755)   $  (534,149)   $(217,366)   $      (0)  $        0
-------------------------------------------------------------------------------------------------------------

</TABLE>

<PAGE>

Due in part to the shortcomings of GAP analysis,  the Asset/Liability  Committee
of Hudson  United  Bancorp  believes  that  financial  simulation  modeling more
accurately  estimates the effects and exposure to changes in interest rates. Net
interest  income  simulation   considers  the  relative   sensitivities  of  the
components of the balance  sheet  including the effects of interest rate caps on
adjustable rate mortgages and the relatively stable aspects of core deposits. As
such,  net  interest  income  simulation  is  designed  to  address  the  likely
probability of interest rate changes and  behavioral  response of the components
of the balance  sheet to those  changes.  The Market Value of  Portfolio  Equity
represents the fair values of the net present value of assets, liabilities,  and
off-balance sheet items.

Financial  modeling is performed under several scenarios  including a regulatory
rate shock scenario which measures  changes in net interest income over the next
twelve  months and market value of  portfolio  equity  given  instantaneous  and
sustained changes in interest rates.


The following  table depicts the Company's  sensitivity to interest rate changes
and the effects on the Market Value of Portfolio  Equity as of December 31, 2000
under  several  scenarios  including  the  regulatory  rate shock  scenario  (in
thousands).

Rate Shock Model
----------------

<TABLE>
<CAPTION>

Basis point rate change      Net Interest Income                    Effect on Market Value of Portfolio Equity
--------------------------------------------------------------------------------------------------------------
<S>                               <C>                                                     <C>
+200 bp                           +7%                                                     -9%
+100 bp                           +3%                                                     -4%
-100 bp                           -2%                                                     +1%
-200 bp                           -3%                                                     +3%

</TABLE>

<PAGE>

                     Hudson United Bancorp and Subsidiaries

                            S.E.C. GUIDE 3 - ITEM II

                              INVESTMENT PORTFOLIO

                         Book Value at End of Each Year


<TABLE>
<CAPTION>
                                                                              As of December 31,
                                                          --------------------------------------------------------
                                                             2000                      1999                      1998
                                                             ----                      ----                      ----
                                                                                   (in thousands)
<S>                                                               <C>                     <C>                        <C>
U.S. Treasury and other U.S.
   Government Agencies and
   Corporations                                                    $742,308                $3,087,607                $ 3,056,717
State and Political Subdivisions                                     52,803                    27,620                    106,255
Other Debt Securities                                                 3,561                    45,348                     20,784
Equity Securities                                                   144,247                   205,951                    112,200
                                                         -------------------       -------------------             --------------
         TOTAL                                                     $942,919                $3,366,526                $ 3,295,956
                                                         ===================       ===================             ==============

</TABLE>

Maturities and Weighted  Average Yield for the Year Ending December 31, 2000 (in
thousands)

<TABLE>
<CAPTION>

                                                                  Maturing
                               ------------------------------------------------------------------------------------
                                                          After One But            After Five But
                               Within One Year          Within Five Years         Within Ten Years          After Ten Years
                               ---------------          -----------------         ----------------          ---------------
                               Amount     Yield          Amount     Yield          Amount    Yield          Amount    Yield
                               ------     ------         ------     -----          ------    -----          ------    -----
<S>                             <C>           <C>       <C>             <C>         <C>           <C>       <C>            <C>
U.S. Treasury and other
   U.S. Government
   Agencies and
   Corporations                 $ 74,060      5.47%     $ 230,068       6.30%       $283,861      6.21%     $ 154,319      6.19%
States and Political
   Subdivisions                   41,807      6.98%         6,318       7.13%          3,634      7.77%         1,044      7.95%
Other Debt Securities              3,058      7.36%           503       6.57%              -                        -
Equity Securities                      -                        -                          -                  144,247      6.34%
                           ----------------         ----------------          -----------------         ----------------
                     TOTAL     $ 118,925      6.02%     $ 236,889       6.32%      $ 287,495      6.23%     $ 299,610      6.27%
                           ================         ================          =================         ================

</TABLE>

Weighted average yields on tax-exempt  obligations have been computed on a fully
tax-equivalent basis assuming a federal tax rate of 35.0 percent.

<PAGE>


                     Hudson United Bancorp and Subsidiaries

                            S.E.C. GUIDE 3 - ITEM III

                                 LOAN PORTFOLIO


<TABLE>
<CAPTION>

                                                     Types of Loans (in thousands)

                                                         As of    December 31,
                               ------------------------------------------------------------------------------
                                        2000               1999           1998           1997            1996
                                        ----               ----           ----           ----            ----
<S>                              <C>                <C>            <C>              <C>             <C>
Commercial, Financial,
  and Agricultural               $ 1,688,582        $ 1,550,070    $ 1,070,844      $ 918,106       $ 923,380

Real Estate -
  Construction                       202,589            216,178        166,841        185,435         163,387

Real Estate -
  Mortgage                         2,692,258          3,031,436      2,962,281      3,203,870       3,225,591

Installment                          694,094            881,897        685,677        604,350         504,853
                               ------------------------------------------------------------------------------
     TOTAL                       $ 5,277,523        $ 5,679,581    $ 4,885,643    $ 4,911,761     $ 4,817,211
                               ==============================================================================

</TABLE>

<PAGE>


                     Hudson United Bancorp and Subsidiaries

                            S.E.C. GUIDE 3 - ITEM III

                                 LOAN PORTFOLIO


The  following  table  shows  the  maturity  of  loans  outstanding   (excluding
residential  mortgages  of 1-4 family  residences,  installment  loans and lease
financing).   Also  provided  are  the  amounts  classified   according  to  the
sensitivity to changes in interest rates.

<TABLE>
<CAPTION>

          Maturities and Sensitivity to Changes in Interest Rates as of December 31, 2000 (in thousands)
          ----------------------------------------------------------------------------------------------

(In thousands)                                                              MATURING
--------------------------------------------- ----------------- ----------------- ---------------- -----------------
                                                                  After One
                                                  Within          But Within          After
                                                 One Year         Five Years       Five Years          Total
--------------------------------------------- ----------------- ----------------- ---------------- -----------------
<S>                                                 <C>               <C>               <C>             <C>
Commercial, Financial,
   and Agricultural                                 $408,886          $499,337          $12,174         $ 920,397

Real Estate Construction                             881,837           605,024          201,721         1,688,582

Real Estate - Mortgage                               181,826            18,341            2,422           202,589
                                              ----------------- ----------------- ---------------- -----------------
                   TOTAL                         $ 1,472,549       $ 1,122,702         $216,317       $ 2,811,568
                                              ================= ================= ================ =================

<CAPTION>
                                                                    SENSITIVITY TO CHANGES IN INTEREST RATES
                                                                             As of December 31, 2000
                                                                             -----------------------
                                                                             Fixed               Variable
                                                                             Rate                 Rate
                                                                         ---------------------------------

    Due Within One Year                                                    $  311,758        $  1,160,791

    Due After One But Within Five Year                                        927,169             195,533

    Due After Five Years                                                      215,765                 552
                                                                         --------------------------------

      TOTAL                                                                $1,454,692        $  1,356,876
                                                                         ================================

</TABLE>

<PAGE>


                     Hudson United Bancorp and Subsidiaries

                            S.E.C. GUIDE 3 - ITEM III

                                 LOAN PORTFOLIO

<TABLE>
<CAPTION>

                   Nonaccrual, Past Due and Restructured Loans

 (In thousands)                                                      As of December 31,
                                          --------------------------------------------------------------------------
                                                   2000           1999           1998           1997           1996
                                                   ----           ----           ----           ----           ----
<S>                                             <C>           <C>            <C>            <C>            <C>
Loans accounted for on
  a nonaccrual basis                            $57,898       $ 46,352       $ 46,178       $ 64,766       $ 72,883

Loans contractually past
  due 90 days or more as
  to interest or principal
  payments
                                                 29,778         23,239         21,261         24,349         22,628

Loans whose terms have been
  renegotiated  to provide
  a reduction or deferral of
  interest or principal because
  of a deterioration in the
  financial  position of
  the borrower                                        0          2,751          5,632         19,054         13,261

</TABLE>

At the end of the year,  all loans were  disclosed  in the above  table if known
information about possible credit problems of borrowers caused management of the
Company to have  serious  doubts as to the ability of such  borrowers  to comply
with the present loan repayment terms.

At December 31, 2000 and at December 31, 1999, there were no  concentrations  of
loans  exceeding  10% of total  loans  which are not  otherwise  disclosed  as a
category of loans pursuant to Item III.A. of Guide 3.

Recognition  of  interest  on  the  accrual  method  is  discontinued  based  on
contractual  delinquency  and when timely payment is not expected.  A nonaccrual
loan is not returned to an accrual  status until interest is received up to date
on a current basis and other factors  indicate  collection  ability is no longer
doubtful.


<PAGE>


                     Hudson United Bancorp and Subsidiaries

                            S.E.C. GUIDE 3 - ITEM IV

                         SUMMARY OF LOAN LOSS EXPERIENCE

The  following is a summary of the activity in the  allowance  for possible loan
losses, broken down by loan category (in thousands):

<TABLE>
<CAPTION>

                                                                               Year Ended December 31
                                                          -----------------------------------------------------------------
                                                                  2000           1999          1998           1997           1996
                                                                  ----           ----          ----           ----           ----
<S>                                                        <C>            <C>            <C>            <C>            <C>
Amount of Loans Outstanding at End of Year                 $ 5,277,523    $ 5,679,581    $4,885,643     $4,911,761     $4,817,211
                                                          =======================================================================
Daily Average Amount of Loans                              $ 5,470,763    $ 5,136,467    $4,923,410     $4,824,845     $4,547,221
                                                          =======================================================================
Balance of Allowance for Possible
  Loan Losses at Beginning of Year                         $    98,749    $    76,043       $85,230        $81,979     $   79,968
Loans Charged Off:
  Commercial, Financial and Agricultural                        (8,778)       (10,388)      (10,034)        (7,489)       (10,493)
  Real Estate - Construction                                         -             --         (213)              -          (473)
  Real Estate - Mortgage                                        (2,847)       (13,657)      (10,994)       (10,861)       (13,980)
  Installment                                                  (23,781)       (24,012)      (22,083)       (15,364)        (4,647)
  Write down of assets held for sale                                --             --       (9,521)             --             --
  Other Loans                                                       --             --            --          (384)        (9,452)
                                                          -----------------------------------------------------------------------
Total Loans Charged Off                                    $   (35,406)   $   (48,057)   $  (52,845)    $  (34,098)    $  (39,045)
                                                          -----------------------------------------------------------------------
Recoveries of Loans Previously Charged Off:
  Commercial, Financial and Agricultural                   $     1,822    $     1,962    $    1,629     $    3,113     $    1,874
  Real Estate-Mortgage                                             772          1,902           988          2,684          2,429
  Installment                                                    5,243          6,065         3,437          3,512          1,534
  Other Loans                                                       --             --            47            798          1,501
                                                          -----------------------------------------------------------------------
Total Recoveries                                           $     7,837    $     9,929    $    6,101     $   10,107     $    7,338
                                                          -----------------------------------------------------------------------
Net Loans Charged Off                                      $   (27,569)   $   (38,128)   $  (46,744)    $  (23,991)    $  (31,707)
                                                          -----------------------------------------------------------------------
Provision Charged to Expense                               $    24,000    $    52,200    $   35,607     $   24,442     $   29,060
Additions Acquired Through Acquisitions                             --          8,634         1,950          2,800          4,658
                                                          -----------------------------------------------------------------------
Balance at end of year                                     $    95,180    $    98,749    $   76,043     $   85,230     $   81,979
                                                          =======================================================================

Ratios
   Net Loans Charged Off to
    Average Loans Outstanding                                    0.50%          0.74%          0.95%         0.50%          0.70%
 Allowance for Possible Loan
    Losses to Average Loans
    Outstanding                                                  1.74%          1.92%          1.54%         1.77%          1.80%

</TABLE>

Management  formally  reviews the loan portfolio and evaluates  credit risk on a
monthly basis  throughout  the year.  Such review takes into  consideration  the
financial condition of the borrowers, fair market value of collateral,  level of
delinquencies, historical loss experience by loan category, industry trends, and
the impact of local and national economic conditions.

<PAGE>


                     Hudson United Bancorp and Subsidiaries

                            S.E.C. GUIDE 3 - ITEM IV

                         SUMMARY OF LOAN LOSS EXPERIENCE

          ALLOWANCE FOR POSSIBLE LOAN LOSSES ALLOCATION (in thousands)

<TABLE>
<CAPTION>


                                         2000                        1999
                              --------------------------- ---------------------------
                                             % of Loans                  % of Loans
                                              In Each                     In Each
                                            Category to                 Category to
                                 Amount     Total Loans      Amount     Total Loans
                              ------------- ------------- ------------- -------------

Balance at end of period
 applicable to domestic loans:
                                   <S>             <C>        <C>              <C>
Commercial
Financial and
Agricultural....................   $37,171         34.7%      $38,592         27.9%

Real Estate -
Construction....................     5,184          1.5         5,382          3.9

Real Estate -
Mortgage .......................    23,245         44.4        25,484         46.5

Installment ....................    28,278         19.4        24,895         21.7

Unallocated ....................     1,302                      4,396
                                     -----                      -----

TOTAL ..........................   $95,180        100.0%      $98,749        100.0%
                                   =======        =====       =======        =====

<CAPTION>


                                         1998                         1997                    1996
                              --------------------------- ---------------------------  ------------------------
                                             % of Loans                  % of Loans                % of Loans
                                              In Each                     In Each                  In Each
                                            Category to                 Category to                Category to
                                 Amount     Total Loans      Amount     Total Loans     Amount     Total Loans
                              ------------- ------------- ------------- -------------  ----------  ------------

Commercial
Financial and
Agricultural....................   $16,789         21.9%      $19,751         18.7%      $20,328    19.2%

Real Estate -
Construction....................     1,704          3.4           482          3.8           685     3.3

Real Estate -
Mortgage .......................    23,868         60.6        30,273         65.2        30,541    67.0

Installment ....................    20,650         14.1        11,650         12.3        12,876    10.5

Unallocated ....................    13,032                     23,074                     17,549
                                   -----------------------------------------------------------------------
TOTAL ..........................   $76,043       100.0%       $85,230         100.0%     $81,979    100.0%
                                   =======================================================================

</TABLE>

The  allowance  for  possible  loan losses has been  allocated  according to the
amount  deemed to be  reasonably  necessary  to provide for the  possibility  of
losses  being  incurred  within  the  above  categories  of  loans  at the  date
indicated.


<PAGE>



                     Hudson United Bancorp and Subsidiaries

                             S.E.C. GUIDE 3 - ITEM V

                                    DEPOSITS

The following  table sets forth  average  deposits and average rates for each of
the years indicated.

<TABLE>
<CAPTION>


                                                                         As of December 31,
                                               2000                             1999                             1998
                                   -----------------------------    -----------------------------    -----------------------------
                                                  Interest                         Interest
                                            Amount         Rate              Amount         Rate            Amount  Interest Rate
                                            ------         ----              ------         ----            ------          -----
                                                                  (In thousands)
Domestic Bank Offices:

<S>                                     <C>              <C>              <C>              <C>             <C>
Noninterest bearing demand
deposits                                $ 1,174,655                       $ 1,170,135                      $ 1,079,508

Interest-bearing
demand deposits                           1,029,708      2.24%              1,199,059      2.01%             1,365,426      2.35%

Savings deposits                          1,504,151      2.56%              1,405,688      2.00%             1,328,052      2.34%

Time deposits                             2,192,996      5.12%              2,821,338      4.91%             3,106,134      5.32%
                                          ---------                         ---------                        ---------
         TOTAL                          $ 5,901,510                       $ 6,596,220                      $ 6,879,120
                                         ==========                        ==========                        =========

</TABLE>

Maturities  of  certificates  of deposit and other time  deposits of $100,000 or
more issued by domestic offices, outstanding at December 31, 2000 are summarized
as follows:

<TABLE>
<CAPTION>

                                                 Time Certificates            Other Time
                                                    of Deposit                 Deposits                 Total
                                                    ----------                 --------                 -----
                                                                           (In thousands)
<S>                                                     <C>                   <C>                     <C>
3 months or less                                        $ 285,991             $      0                $ 285,991
Over 3 through 6 months                                    47,286                                        47,286
Over 6 through 12 months                                   72,104                                        72,104
12 months                                                 298,124                                       298,124
                                            ---------------------------- ---------------------- ----------------------
TOTAL                                                   $ 703,505             $      0                $ 703,505
                                            ============================ ====================== ======================

</TABLE>

<PAGE>


                     Hudson United Bancorp and Subsidiaries

                            S.E.C. GUIDE 3 - ITEM VI

                           RETURN ON EQUITY AND ASSETS

<TABLE>
<CAPTION>

                                                                   Year Ended December 31,
                                                    -----------------------------------------------
                                                      2000             1999              1998
                                                    -----------------------------------------------
<S>                                                  <C>               <C>                 <C>
Return on Average Assets                              0.61%             0.75%              0.31%

Return on Average Equity                             10.72%            11.95%              4.14%

Common Dividend Payout Ratio                        101.09%            74.58%            175.00%

Average Stockholders' Equity to
  Average Assets Ratio                                5.66%             6.27%              7.42%


</TABLE>

<PAGE>


                     Hudson United Bancorp and Subsidiaries

                            S.E.C. GUIDE 3 - ITEM VII

                                   BORROWINGS

The following table shows the  distribution of the Company's  borrowings and the
weighted  average  interest  rates  thereon at the end of each of the last three
years.  Also  provided  are the maximum  amounts of  borrowings  and the average
amounts of borrowings as well as weighted  average  interest  rates for the last
three years.

<TABLE>
<CAPTION>
                                                           Federal Funds
                                                           Purchased and
                                                           Securities Sold
                                                           Under Agreement                Other
                                                           to Repurchase                Borrowings
                                                           -----------------            ----------
                                                                       (In Thousands)
<S>                                                               <C>                    <C>
At December 31:
       2000                                                       $  176,878             $   181,983
       1999                                                          985,170               1,398,496
       1998                                                          422,158                 548,252

Weighted average interest rate at year end:
       2000                                                             4.69%                   6.23%
       1999                                                             5.24                    5.76
       1998                                                             4.83                    5.09

Maximum amount outstanding at any month's end:
       2000                                                       $1,268,412             $ 1,500,562
       1999                                                          994,143               1,500,677
       1998                                                          470,382                 696,048

Average amount outstanding during the year:
       2000                                                       $  718,444             $   857,037
       1999                                                          950,039                 725,604
       1998                                                          414,793                 444,579

Weighted average interest rate during the year:
       2000                                                             5.75%                   6.09%
       1999                                                             5.08                    5.47
       1998                                                             5.21                    5.92

</TABLE>

<PAGE>

                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                HUDSON UNITED BANCORP

                                D. LYNN VAN BORKULO-NUZZO
                            By: _________________________
                                D. Lynn Van Borkulo-Nuzzo
                                Executive Vice President
                                  and Corporate Secretary

Dated:  April 9, 2001