Citizens Financial Group Inc. said Monday that it would acquire Roxborough Manayunk Bank, a Philadelphia savings bank, for $136 million.
Buying Roxborough would give the Royal Bank of Scotland PLC unit and additional 14 branches in Pennsylvania and one in Delaware and would help Citizens, of Providence, R.I., shore up its network in Pennsylvania, where it has added 237,000 retail customers in the last few years, largely through the retail banking business it bought from Mellon Financial Corp. in 2001.
Stephen D. Steinour, the chairman, president, and chief executive officer of Citizens Bank of Pennsylvania, said Roxborough has a strong customer base and would shore up his bank's operations in the Philadelphia area.
The deal "shows continuing momentum in Philadelphia," he said. "It also allows us to gain more scale in branches where there's overlap and give us market extension in a number of new and interesting neighborhoods."
The all-cash deal is expected to close in the first quarter. Roxborough had $914 million of assets on June 30.
Citizens is not the only bank to make a Philadelphia deal in recently.
After cleaning up unprofitable business lines for several quarters, FleetBoston Financial Corp. last month announced a $211 million stock transaction for Progress Financial Corp., a $1.1 billion-asset thrift holding company in the Philadelphia suburb of Blue Bell. That deal has yet to close.
Mr. Steinour said that Roxborough has been in business for more than 80 years and has a strong management team and a loyal customer base. "They're very well thought of in the community where they're from. We're hoping that good-will [extends] to us also."
The Roxborough deal is the third that Citizens and its $759 billion-asset parent have announced this year. On July 31 the unit closed its purchase of Port Financial Corp., a $1.5 billion-asset suburban Boston bank it agreed to buy in April. And in July it announced plans to buy the $457 million-asset Community Bancorp Inc., which is also based near Boston. That deal has yet to close.
Citizens expects to achieve a certain level of organic growth, but adding smaller banks to the network "further solidifies our market position - it deepens us in the markets we are in," said Mr. Steinour, who oversees banking operations in Pennsylvania, Delaware, and New Jersey. All three of those states are areas "where we'd be interested in expanding."
Pittsburgh is one area where Citizens would like to grow, but "if we could find the right deal in any of these three states, we'd do it," he said. Nor did he rule out an even larger transaction than those it has been making.
Fred Goodwin, Royal Bank of Scotland's CEO, has been very open about his desire to build Citizens through acquisitions. The unit has been rumored to be eyeing Sovereign Bancorp Inc., a $40 billion-asset bank headquartered in Philadelphia.
