Jay Sidhu is one step closer to building another regional empire.
Sidhu's New Century Bank, which is in the midst of renaming itself Customers Bank, acquired the $82 million-asset ISN Bank in Cherry Hill, N.J., on Friday from the Federal Deposit Insurance Corp. after state regulators closed the bank.
In an interview Monday, Sidhu said his $900 million-asset bank bid on tiny ISN to gain access to customers in the Garden State.
"It is very tough to grow into New Jersey without doing an acquisition there," Sidhu said. "This gets us across the state line."
New Century, based in Phoenixville, Pa., announced last month that it would acquire the $150 million-asset Berkshire Bank in Wyomissing, Pa. In July, it bought the $200 million-asset USA Bank in Port Chester, N.Y., in an FDIC-assisted deal.
Though Cherry Hill is a Philadelphia suburb, Sidhu said the entry into New Jersey would ultimately bridge the gap between New Century's Pennsylvania and New York operations.
Meanwhile, Sidhu has hired Warren Taylor, the former New Jersey president of Sovereign Bank, to lead the charge into New Jersey. Sidhu was the chairman and chief executive of Sovereign, expanding it over two decades — largely through acquisitions — from a little-known thrift into an $80 billion-asset regional powerhouse. Sidhu resigned in late 2006; Sovereign was sold to Banco Santander SA early last year.
Matthew Schultheis, an analyst at Boenning & Scattergood Inc., said in an interview Monday that it isn't surprising that Sidhu acquired a failed bank in New Jersey at this time. "It is pretty evident to me that he is trying to recapture some of the markets that he had with Sovereign," Schultheis said. "When you look at where he is and what he is buying, you get the sense that he feels comfortable with those markets."
Sidhu said while the financial regulatory overhaul would ease interstate banking regulations, he didn't want to wait a year until it starts taking effect to expand. "We have big plans to build our franchise in New Jersey," he said.
Schultheis said that Sidhu likely wasn't too concerned with the exact location of the failure so long as it was in New Jersey. ISN was the first bank to fail in the state in 2010.
Sidhu has said his strategy with the new venture is to grow organically and to make acquisitions that complement such growth. Since Sidhu took the reins of New Century, it has expanded from $266 million to $900 million of assets, largely through organic growth.