First Fidelity Seen Poised To Exploit Any Recovery
Through cost-cutting and acquisitions. First Fidelity Bancorp. has quietly put itself in a strong position to prosper when the economy recovers, according to some analysts who are rating it a good long-term investment.
The Lawrenceville, N.J., banking company expanded in Philadelphia over the last weekend by purchasing 29 branches of the failed Atlantic Financial Savings from the Resolution Trust Corp. The company's Fidelity Bank subsidiary added nearly $1 billion in deposits and shored up its No. 3 position in its market behind larger units of CoreStates Financial Corp. and Mellon Bank Corp.
Strongest in Home States
But First Fidelity's greatest strength is still in its home state, where it is already No. 1, said Felice M. Gelman of Dillon Read, an investment banking firm.
"They're in a great position to dominate New Jersey," she said. "They're not in a great position in Pennsylvania, but at least the window is open."
Taking advantage of opportunities in New Jersey arising from the bank and thrift crises, First Fidelity has acquired branches of Statewide Bancorp in Toms River, City Federal Savings, Ensign Savings, and Alexander Hamilton Savings.
It now has claimed 13.6% of all bank, thrift, and credit union deposits in New Jersey, opening a gap between it and the 8.6% share of Midlantic Corp., according to First Fidelity estimates.
Thomas H. Hanley of Salomon Brothers, said the region's weak economy, which explains the availability of those added branches, will dampen the bank's results.
Mr. Hanley raised his estimates of 1992 and 1993 earnings by 10 cents each to $3 and $3.25, but added: "Because we believe that First Fidelity's regional economy will somewhat lag the national economy, we do not look for any meaningful pickup in commercial loan demand in the first half of 1992 and most likely the full year."
Mr. Hanley said if the onetime costs of acquisitions and deposit insurance are discounted, the company is on target for expense reduction goals.
First Fidelity's shares moved lower by 37 cents in Tuesday's falling market, to $29.75 by 3 p.m.