Penn Savings Goes Interstate in RTC Deal
WASHINGTON -- The Resolution Trust Corp. said it has sold Nassau Federal Savings and Loan Association of Princeton, N.J., to Penn Savings Bank of Wyomissing, Pa.
The acquisition turned Penn Savings and its parent, Sovereign Bancorp of Reading, Pa., into a multistate operation. It added five branches in New Jersey, with $160 million in deposits, to a network of 23 full-service and limited-service offices in eastern and northeastern Pennsylvania.
In addition to Penn Savings, Sovereign owns Yardley Bank for Savings, in Yardley, Pa. Sovereign increased its assets to $1.45 billion and declared itself "the first healthy interstate thrift in Pennsylvania." Its risk-weighted capital ratio was 9% of assets on June 30.
Jay Sidhu, president and chief executive officer of Sovereign, called Nassau Federal "an important strategic acquisition." Sovereign seeks to serve strong communities through locally managed units, and plans "to bring to the Princeton area several homeowner-lending products and competitive rates on deposits."
The purchase premium for $160 million of Nassau Federal deposits was $1.7 million, or 1%. Penn Savings, which has $1.2 billion of assets, also bought $42.1 million of Nassau's assets without the "putback option" of returning unwanted assets to the RTC at a later date.
Other RTC Actions
The thrift-bailout agency said it will advance Penn Savings $132.2 million while retaining $139.5 million in Nassau's assets, with the whole deal costing the RTC $68 million.
In other resolutions of failed thrifts during the week ended Aug. 23, the RTC said New Jersey National Bank bought $72 million of deposits of Old Borough Federal Savings and Loan Association, and First Federal Savings and Loan Association of Wooster, Ohio, acquired the $74 million of deposits of First Federal of Mount Vernon.
New Jersey National, a $2.6 billion-deposit bank based in Penington, paid a premium of $120,000 or 0.1% of Old Borough core deposits. The RTC said the deal will cost it $19.7 million, and it will retain $97.5 in Old Borough assets.
The Wooster, Ohio, thrift, owned by First Federal Financial Services Corp., took most of the Mount Vernon thrift's assets, primarily residential mortgages.