TD Banknorth Inc. said Wednesday fourth-quarter profit rose 50% after the acquisition of Hudson United Bancorp.

Net income rose to US$83.4 million, or 36¢ a share from a year-earlier US$55.6 millionmor 32¢.

Fourth-quarter quarter results reflect the full impact of the Hudson acquisition, which TD Banknorth bought in January of 2006. The bank issued about 62 million shares of TD Banknorth for the purchase, which was offset by its repurchase of 8.5 million shares in the first quarter of last year.

“The current operating environment continues to be challenging,” said TD Banknorth president Bharat Masrani. “While competition for loans and deposits continues to be intense, we remain focused on the organic growth of our loans, deposits and fee income.”
Average loans and leases increased 27% to US$25.6 billion in the quarter, mostly because of the Hudson acquisition. Average deposits rose 34%.

Portland, Maine-based TD Banknorth is a majority-owned unit of Toronto-Dominion Bank. In November, TD said it plans to buy all of the division’s outstanding shares it doesn’t already own and take the unit private. The transaction’s expected to close in March or April of this year.

TD said that it expects TD Banknorth;s fourth quarter earnings to translate into first quarter net income for its U.S. Personal and Commercial Banking segment of $64 million (Canadian dollars).

TD will release its first quarter financial results on February 22.