A New Jersey community bank has a deal with a supermarket chain that will almost double its number of branches.

Trust Company of New Jersey said it plans to set up branches in 40 stores run by Montvale, N.J.-based Great Atlantic & Pacific Tea Co. The deal gives Trust Company, based in Jersey City, exclusive rights to put branches in A&P stores in 13 northern and central New Jersey counties.

The $3 billion-asset banking company, parent of Trustcompany Bank, operates 55 branches in those counties.

Siggi B. Wilzig, chairman and chief executive officer of Trust Company, said supermarkets are logical sites for expansion because of their heavy foot traffic.

Retail loans make up 75% of Trust Company's lending portfolio. It intends to focus on residential mortgages and home equity and auto loans at the in-store branches, which will range in size from 300 to 650 square feet.

"It enables us to enter new communities, gain a significant market share faster, and greatly reduce costs," he said.

Mr. Wilzig said the bank plans to open one or two branches per month for the next two years.

Trust Company beat out four rivals for the contract to operate in A&P stores. Though the company declined to discuss details of the negotiations, A&P president and chief executive officer Christian W.E. Haub called the deal "a perfect match."

"Trust Company and A&P share a much higher level of personal service for our customers ... so it was only natural we select them," he said.

The announcement came as some are taking a second look at their in-store branches. For example $415 million-asset Community First Bank, Carrollton, Ga., said last month that it would sell three of its four locations in Wal- Mart stores because the offices were not making enough loans.

"Nobody goes to Wal-Mart in search of a loan," said C. Lynn Gable, Community First's chief financial officer.

But Mr. Wilzig said he expects his A&P branches to bring in significant deposits. In a four-month pilot test, deposits drawn by three A&P branches beat the company's goal by 61%, he said.

A&P operates supermarkets under eight trade names in Canada, the District of Columbia, and 18 states, including 75 stores in New Jersey. This is A&P's first major deal with a bank, a company spokesman said, though it has individual-store deals with banks in other markets.

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