Despite fears over its effect on competition, the Federal Reserve Board has given Shoreline Financial Corp. permission to acquire SJS Bancorp and its St. Joseph, Mich.,-based subsidiaries.

The deal would give Benton Harbor, Mich.-based Shoreline control of 37.5% of the deposits in its home market.

The Fed said in its April 21 order that it normally would reject a deal giving a bank control over such a large segment of the market. But it said several extenuating circumstances existed.

For example, 12 other depository institutions operate in the market and six of those are part of holding companies with more than $1 billion of assets. Also, the Fed said it expects new competitors will enter the market shortly. Finally, it noted that seven credit unions operate in Benton Harbor.

SJS Bancorp owns SJS Federal Savings Bank and SJS Financial Corp., which offers credit-related life insurance.

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