Arnold Horvath and Robert Jablonski are firm believers that two heads really are better than one.

Only five years after starting Prestige State Bank in north-central Jersey, they have used their two-headed leadership style and lending background to build a thriving $163 million-asset community bank powerhouse in small-business and consumer loans.

The two have split the traditional one-man job of president and chief executive in half. Mr. Horvath took the first title, replete with external image and lending duties, while Mr. Jablonski accepted the second, with its operational and financial responsibilities.

Using its designation as a Small Business Administration preferred lender, tiny Prestige has racked up a statewide commercial loan portfolio that rivals those of national lending companies and major regional and superregional banks.

At the same time, the bank maintains a strong community focus in its hometown of Flemington.

Prestige's growth has far outpaced the expectations of Mr. Horvath and Mr. Jablonski, who projected an asset size of only $66 million at the five- year mark. Instead, its dizzying run to $166 million in assets makes it the fastest-growing new bank on the East Coast in rankings by Danielson Associates, a Rockville, Md., investment banking firm.

Now, Prestige has toppped its success by taking the lead for small- business lending in New Jersey for the last 12 months, passing national leader Money Store Investment Corp.'s combined total in the number of SBA loans in New Jersey and the New York area.,

"No one person could have accomplished what we have," said Mr. Jablonski.

In fact, Mr. Horvath and Mr. Jablonski - both are 45 years old - attribute much of their success to their dual leadership of the bank and their decision from the start to divide the duties.

In the last year, for example, Mr. Horvath dedicated most of his time to the SBA program, while Mr. Jablonski focused on deposit generation.

The two men are used to cooperating, having worked together for years as senior vice presidents at the former Town and Country Bank, a 1974 local startup that was bought in 1982 by Chatham, N.J.-based Summit Bancorp.

Neither wanted to play second fiddle at Prestige, Mr. Horvath said.

Although both men understand each other's jobs and could step in whenever necessary, "we don't tread on each other's turf," Mr. Jablonski said.

"If we didn't have the ability to place various responsibilities on two heads versus one, we would never have accomplished what we have with this banking organization," Mr. Horvath said.

They're not the only experienced bankers on Prestige's board. Many members of the lending staff are veterans of Town and Country or other banks.

That previous experience has dampened any potential concerns analysts might have had over asset quality given Prestige's rapid loan growth.

"Usually when a bank grows this fast, it means the people who allowed them to get a quick start," said Arnold Danielson, president of Danielson Associates. "That's a fairly safe thing. And they've gotten such a quick start, they don't have to worry about going any faster."

"They're experienced bankers," said Ken Puglisi, managing director of equity research at Sandler O'Neill & Partners in New York. "It's not a fly- by-night situation where they just decided to start a bank and took off. They knew what their objective was."

The quest to become the top small-business lender in the state started more than five years ago, when the two men left Summit and "set out to fill a niche, a void, that we saw," Mr. Jablonski said.

At the time, the state's major banks were struggling with losses and mounting problem assets. And the purchase of Town and Country had removed a strong local bank from the market at a time when businesses, particularly builders, needed lending support.

Although Prestige has only three branches in the Flemington area, it has built its success from a statewide referral network of attorneys and accountants, as well as three business-development representative working on commission.

And the Preferred Lender status, which is transferrable to an acquirer, allows the bank to approve SBA loans without first going through the federal agency.

For more than 15 years, Money Store had been the top SBA lender in New Jersey in both dollar amount and number of loans.

But for the 12-month period ended Sept. 30, Prestige racked up 144 SBA loans in New Jersey, topping Money Store's combined 138 loans in New Jersey and the New York City area. However, the Money Store dollar loan volume - $23.7 million in New Jersey and $18.2 million in New York - still topped Prestige's $24 million for New Jersey alone.

Prestige's 144-loan total is also just behind those of the leaders for the New York City district - San Juan-based Banco Popular de Puerto Rico, with 150 loans, and Chemical Bank Corp., with 147 loans.

Its current level would have ranked it among the top 20 SBA lenders nationally in 1994. The top two were Money Store and Banco Popular.

"I think it's unbelievable, when you compare the ad campaign that the nonbanks and the larger banks have in place versus our budget of $18,000 a year," Mr. Horvath said.

The bank has now obtained Preferred Lender status in Pennsylvania and New York and is seeking business development representatives in those states as well.

But although the bank has focused much time and effort on its SBA lending, Mr. Horvath and Mr. Jablonski don't want to be known only as SBA lenders.

In particular, Prestige has placed much emphasis on its consumer lending, especially indirect auto lending through about eight car dealers. That's accounted for $22 million of the bank's loan portfolio, while most of the rest is in home-equity lines.

Bank officials are looking to fill the one hole in their portfolio - mortgage lending. With industry consolidation eating up much of the local competition, the bank has been able to hire several seasoned mortgage lenders recently, with experience selling variable-rate mortgages on the secondary market.

"With everything else we've been doing in the last five years, we didn't make it a priority," Mr. Jablonski said. "We've wanted to, but we didn't have the expertise. This will really round out our community banking image."

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