Hoping to lure wealthy commuters, New Jersey's Summit Bancorp has set up a private banking outpost in New York City.
The three-month-old representative office in midtown Manhattan is a one- man shop, headed by vice president Timothy G. Madden. While Mr. Madden can not take deposits, he can refer his clients to branches in New Jersey for their asset management and basic banking needs.
"We know from talking to accountants and attorneys that we have an opportunity to do business in the city," said Robert G. Cox, Summit's president. The Princeton, N.J., bank, which merged with United Jersey Bank this year, is the leader in deposits in its home state.
Summit's "perfect candidates" for its New York private banking operation are young professionals with six-figure salaries, according to Mr. Madden. "There are thousands" of well-paid executives who live in New Jersey but work in New York, he added.
Indeed, according to the U.S. Census Bureau, New Jersey boasts the second-highest per capita income of the 50 states.
Mr. Madden is not limiting his focus to the New Jersey Transit set. His clients often refer co-workers in Manhattan to Summit - even ones who don't live in the Garden State.
"I don't care where they live - New York, Connecticut, Westchester, Long Island. We will underwrite credit products regardless," Mr. Madden said.
But serving that market will be a challenge, consultants warned.
"I couldn't see that somebody who works and lives in New York City would want to go with a New Jersey bank," said Cathy Ellsworth, a senior consultant in the Spectrem Group's New York office.
Summit is forging on, nevertheless. This month, it held a cocktail reception and mock auction for 200 guests at Sotheby's. It has also enlisted three New York clients - a lawyer, an accountant, and a headhunter - to introduce their colleagues to the bank.
The Princeton bank has employed a similar strategy in New Jersey for years. Its Advisory Business Council now counts 200 doctors, lawyers, and businesspeople among its members.
One consultant, who works in New York and lives in New Jersey herself, applauded the strategy.
Shirley Sing-Masuyama, an associate at Financial Institutions Consulting, suggested that Summit avoid targeting Wall Streeters, who often have accounts at the firms where they work. But she added that, if Mr. Madden goes after "people who work in midtown in advertising, health care, apparel, and entertainment, then he's going to have a success."
