Dime Bancorp of New York announced an agreement Wednesday to buy a New Jersey thrift company for $110 million.
The acquisition of Paterson-based Lakeview Financial Corp. would give Dime $573 million of assets, $454 million of deposits, and 11 offices in Passaic and Bergen counties.
That would bring Dime's New Jersey deposits to $2.5 billion and its branch network to 29.
Dime said the purchase, which it expects to complete in the second quarter, fits with a community banking strategy that includes strengthening its market presence in New York and surrounding suburbs and diversifying its product mix.
"We think that New Jersey is a very attractive market," said Lawrence J. Toal, chairman and chief executive officer, in a telephone interview. "Lakeview is a community banking organization, and their values are very much aligned with ours."
Including Lakeview, Dime would have 5.1% of New Jersey deposits, ranking it 10th in the state, according to Sheshunoff Information Services.
"It makes sense for them to do what they can to enhance their market share in New Jersey," which is "one of the more attractive markets," said James Ackor, an analyst at Tucker Anthony.
Dime would pay 35% of the price in cash and 65% in stock. Lakeview shareholders can get 0.9 share of Dime stock or $24.26 per share in cash.
Dime expects to eliminate 35% of Lakeview's expense base through consolidation. Mr. Toal would not comment on potential layoffs.
Lakeview CEO Kevin J. Coogan said the company has been reviewing its options for several months, concluding it is too small to afford heavy investments in new technologies.
Lakeview may also have been pressured by an unrealized $4 million loss in November from an investment in a mortgage company. If realized, that would equate to a loss of 90 cents per share, the company said.
Mr. Toal said that problem was factored into the sale price.
Analysts said the acquisition indicates that the merger trend is still very much alive. "Deals are not dead," said Thomas O'Donnell of Salomon Smith Barney. "We expect to see continued consolidation in the New York market."
Dime was on the sidelines in recent months as competitors snapped up smaller New York thrifts. Analysts said Dime was on the losing side of recent bidding battles including that for Long Island Bancorp, which merged with Astoria Financial Corp. in October.
Mr. Toal would not comment on whether the company bid for Long Island Bancorp but said Dime would continue to look at acquisitions if they made strategic and economic sense.
