Two River Community Bank of Middletown, N.J., and Town Bank of Westfield plan to merge and form a new, yet-to-be name holding company.
The merger agreement was announced Wednesday. Both banks would retain their names. Through a stock swap, shareholders of the $248 million-asset Two River would end up with about 62% of the holding company; shareholders of the $147 million-asset Town would get the rest.
Barry B. Davall, Two River's president and chief executive officer, said that the two banks had been working together on loan participations, and their boards decided they could better compete as part of a larger, more efficient company. Specifically, both banks would get larger lending limits and would be able to offer each other's products and services, he said.
Mr. Davall would become the holding company's CEO and keep his title at Two River. Robert W Dowens Sr. would remain Town's president and CEO.
The deal is expected to close early in the first quarter.
