Summit Bancorp's agreement to buy Egg Harbor City, N.J.-based Collective Bancorp for $867 million might increase its home-state market share but wouldn't guarantee independence, analysts said.

"Any transaction which adds to earnings per share and enhances market share has to make a bank more attractive, but it's also true that the larger a bank gets, the more difficult it is to be acquired," said Kenneth J. Puglisi, an analyst at Sandler O'Neill & Partners.

Elizabeth A. Summers, an analyst at Ryan Beck & Co., agreed. She said Summit could be acquired in the next three to five years by a large regional looking for a New Jersey presence, like Pittsburgh-based PNC Bank Corp. or Boston-based Fleet Financial Group. But, she said she would be surprised if Summit were acquired in the next 12 months.

"They have clearly said they are an acquirer, and are continuing to look for their own in-market acquisition candidates," she noted.

Princeton, N.J.-based Summit said its stock deal to buy Collective at $42.51 per share is worth about 2.3 times book value. Summit would exchange 0.895 shares of its common stock for each share of the thrift company.

The transaction would bring the $23 billion-asset Summit an additional $5 billion of assets, $3.5 billion in deposits, and 82 branches in 15 New Jersey counties. It now has 350 branches in New Jersey and eastern Pennsylvania.

We will "have the No. 1 market position in nine of New Jersey's 21 counties, and one of the top three positions in 16 counties," said Summit's chairman and chief executive, T. Joseph Semrod.

Mr. Semrod said the acquisition would be accretive to earnings in 1998. He said Summit hopes to take $18 million, or 25%, out of Collective's expense base.

Summit could be expected to close, sell, or consolidate 25 of the thrift's branches, which overlap with its own. No determination has been made about cutting jobs, a Summit spokeswoman said.

The deal is expected to close by the end of the third quarter. It would increase Summit's share of the New Jersey deposit market to 16.1%, from 13.4%. Summit already has the biggest share in the state, followed by First Union Corp.'s 10.9% and PNC's 8.5%.

The deal would double, to 17%, Summit's market share in southern New Jersey. Summit would take the lead in coastal Atlantic, Burlington, and Ocean. In Monmouth it would move into the No. 2 spot, behind Sovereign Bancorp.

Analysts said they would expect Summit to turn Collective's thrift branches into bank branches, but Summit would not discuss the question.

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