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Lakeland Bancorp in Oak Ridge has agreed to buy Somerset Hills Bancorp in Bernardsville, N.J.
January 29 -
Persistent challenges such as margin compression and rising expenses will eventually force more banks to sell.
January 28 -
Investors Bancorp of Short Hills, N.J., has agreed to buy Roma Financial Corp. of Robbinsville, N.J. The deal, scheduled to close in the second quarter, would bring together two mutual thrifts and create a company with assets of more than $13 billion.
December 20 -
Lakeland Bancorp Inc. of Oak Ridge, N.J., announced Monday that it would acquire the $320 million-asset Newton Financial Corp. for $99 million in cash and stock.
October 28
Somerset Hills Bancorp (SOMH) in Bernardsville, N.J., faced a frustrating future on its own.
The company had pristine credit quality, excess capital and operated in some of New Jersey's most-affluent markets. But at $370 million in assets, it
So the company
"It has been challenging in this economy to deploy" capital, Stewart McClure Jr., Somerset Hills' president and chief executive, says. "It is nice to find an outlet" to put the capital to work.
Those challenges, along with the fact that New Jersey is saturated with small banks, will likely
"I think there are more banks here per square feet than most other states," says McClure, who is also his company's vice chairman and chief operating officer. "You've got a lot of people struggling under the weight of the economy and are finding it tough to bring in capital."
For Lakeland, the acquisition is its
"We've been out looking at the landscape and wanted to supplement our organic growth" with an acquisition, says Thomas Shara, Lakeland's president and chief executive. Somerset Hills "is probably the cleanest bank we've ever seen."
Somerset Hills' conservative culture helped it thrive during banking's darkest days but it may have also sealed the company's fate as a seller, says Travis Lan, an analyst at Stifel Nicolaus.
"They had put themselves into a box," Lan says. "Coming out of the financial crisis, they were unwilling to compete on price. And bigger banks that were desperate for growth entered their market and went for their wheelhouse clients."
Lakeland aims to win those clients back. Shara plans to add more commercial lenders, particularly those who are well-versed in asset-based lending, to Somerset Hills' branches. He also plans to expand Somerset Hills' mortgage lending operation to Lakeland's 46 branches.
Shara, who plans to take some time before pursuing another acquisition, wants to add branches in Somerset and Union counties.
"We want to digest this one and get it right because we haven't done a deal in a while," he said. "I'm hopeful that this sends a message that smaller banks can join with a more liquid bank. That hasn't been the experience so far because a lot of guys don't like how they are trading already."