Setting its sights on customers put off by recent megamergers, a Pennsylvania community bank company plans to double its branches in the next seven months.

Main Street Bancorp, in Reading, said last week that it would open 23 new branches by the end of July.

The $1.2 billion-asset company will build six branches and revive 17 vacant branches formerly operated by other banks. It said it has leases for each of the new locations.

The expansion will move Main Street, the company formed by the May 1 merger between BCB Financial Services Corp. and Heritage Bancorp, past its suburban base and into metropolitan Philadelphia and western New Jersey.

Main Street officials said the company will target customers who may have grown frustrated with big banks.

Nelson R. Oswald, Main Street's chairman, said he believes there is still considerable unrest in Pennsylvania and New Jersey following mergers such as First Union Corp.'s acquisition of CoreStates Financial Corp. last April.

"We view this as a once-in-a-lifetime opportunity to increase market share," Mr. Oswald said.

The new branches will be divided among two of the company's bank subsidiaries, Main Street Bank and Berks County Bank.

Analysts praised Main Street's leaders for their efforts to attract hometown deposits. Berks County Bank, for example, is known in its communities for serving popcorn and coffee in the lobby.

"They go for the hometown-bank feel, and quite frankly it works," said Cassandra Toroian, research analyst at Ryan, Beck & Co., Livingston, N.J. "They have developed a formula for growing deposits and loans, and now are going to apply that formula to a larger area."

"We believe that the same friendly service that has been embraced by our current customers will be equally successful in these new markets," Mr. Oswald added.

Of course, expansion comes at a price. Main Street warned investors that next year's earnings will take a hit.

The company did not disclose how much earnings would decline. But Mr. Oswald did say he expects each branch to be profitable within 18 months, and that the branches would contribute to earnings during 2000.

Ms. Toroian said she is willing to give the company time to see if the expansion pays off.

"Obviously, I don't like to see a hit to earnings," she said. "But I believe they are doing what they think is in the long-term interest of shareholders."

Besides, she said, with so few small banks left around Philadelphia it would be hard for Main Street to expand through acquisition.

"These are high-growth areas all the banks would like to get into," Ms. Toroian said. "If banks want to be there, they are going to have to grow on their own, without making deals."

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