A suburban Philadelphia thrift has won the bidding for more than $400 million in deposits being divested by Meridian Bancorp.
Valley Forge-based Commonwealth Savings Bank said it had agreed to pay a premium for 11 Meridian branches and deposits totaling about $424 million, but it did not reveal the price. The deal, which is expected to be completed this summer, also includes about $128 million in commercial, consumer, and mortgage loans.
Reading-based Meridian is selling the branches to pave the way for its merger with CoreStates Financial Corp., Philadelphia. The divestiture was required - to defuse antitrust concerns - under an agreement between the banks, the U.S. Justice Department, and the Pennsylvania attorney general.
The deal will help Commonwealth become more banklike. The thrift, predominantly a mortgage lender, has been offering consumer products from its branches for about 10 years, but only in the last year did it begin offering small-business loans.
"We're very pleased to make this acquisition," said Charles H. Meacham, Commonwealth chairman and chief executive. "We think it allows us to move forward much more quickly with our transition to a community bank."
Other bidders also vied for the branches, which make up the full divestiture required of Meridian, but CoreStates officials did not disclose their identities.
Ten of the branches are situated in Berks County, significantly boosting Commonwealth's market share in that area, northwest of Philadelphia. The remaining branch is in nearby Lebanon County.
The purchase is expected to enhance Commonwealth's earnings in 1996.
Commonwealth officials say all employees will be retained and none of the branches will be closed. They expect to hire additional lenders and staff to help the thrift in Berks County.
The branch purchase is delaying a stock offering planned by Commonwealth Bancorp, the thrift's newly formed holding company. The offering is part of the second-stage conversion of Commonwealth's mutual holding company to stock ownership.
Commonwealth officials will soon send updated information to offering subscribers, including the premium for the branch deal, and they expect to begin a resolicitation in late April, pending regulatory approval.
CoreStates' acquisition of Meridian is expected to close by the end of April, creating a $45 billion-asset regional giant. The branch sale to Commonwealth is expected to be completed late in the second quarter or early in the third quarter.