N.J. Merger Partners Say Deal Would Boost Home Loan Business

Executives of UJB Financial and Summit Bancorp say they believe their planned merger, which would create the state's largest independent bank, would permit faster expansion of their mortgage business.

The merger, in which the Summit name would survive, would double the bank's originations - to $800 million through August - and servicing - to $4.6 billion. The banks announced plans for the $1.2 billion merger on Monday and said they expect the deal to be completed early next year.

As a combined entity, "we'll be a stronger competitor in terms of delivering services to customers," said Anthony Allora, who has headed UJB's residential mortgage company for six years.

The combined bank would use its higher profile to access additional customers and products, Mr. Allora said. "We'll be able to shake more things from the tree."

There would also be a shake-up, starting at the top of the banks' mortgage units. Mr. Allora oversees UJB's mortgage unit; Gerald Facciani is the top executive at Summit Mortgage. Mr. Facciani joined Summit in September 1994, when the bank bought his mortgage company, Lancaster Financial.

Spokeswomen from both banks said senior positions in the new mortgage group, as well as its headquarters, are still being hashed out. "There is nothing definitive about who is reporting to whom, and where" they would be located, a spokeswoman said.

Industry observers said they would expect some fallout as the two mortgage units melded, given the entrepreneurial leanings of the Lancaster business that forms the backbone of Summit's lending program.

But one analyst called the speculation off-base.

Lancaster employees appear to have adapted well to the Summit way of life, said Elizabeth A. Summers, banking analyst at Ryan, Beck & Co., West Orange, N.J.

Even with UJB operations part of the mix, "I have no reason to assume" problems would develop, Ms. Summers said.

While the banks deal with existing mortgage employees, new hires and expansion plans appear to be on hold.

Summit, for instance, just hired a senior executive to create an alternative mortgage products division for consumers who don't qualify for conventional loans. A Summit spokesman said the bank would deal with merger-related details, before new initiatives are worked out.

The banks would start from a solid base as mortgage lenders in New Jersey, where homes run the gamut from estates to farms to inner-city apartments. Combined, Summit and UJB would enhance their coverage, especially in the central part of the state.

And, in addition to originations and servicing, the merger would create opportunities to sell other bank products.

"Mortgages are a stepping stone to cross-selling more products," like checking accounts and credit cards, Mr. Allora said.

Ms. Summers agreed, saying that once customers take out a mortgage they are likely to open other accounts with the institution because of the convenience. "It's a pain in the neck moving everything."

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