Spencer Savings Bank in Elmwood Park, N.J., has agreed to buy the banking operations of New Jersey Manufacturers Insurance.

The $2 billion-asset Spencer would get approximately $605.8 million of assets (including $295.6 million in loans) and $458.9 million of deposits. Spencer would also keep NJM Bank's Parsippany branch, one of three that it operates, a spokeswoman for Spencer said in an email.

The purchase price was not disclosed. The deal is expected to be completed in the fourth quarter.

"This agreement will enable Spencer to increase its footprint within New Jersey, while enhancing our online banking capabilities," Chief Executive Jose Guerrero said in a press release Monday.

New Jersey Manufacturers has been in the banking business 15 years. It opened the NJM Bank subsidiary in 1999 with the intention of providing banking services to its policyholders and the general public.

"Consumer demand for consolidated insurance and banking services has been limited, and the regulatory environment has become more challenging over the last few years," Bernard Flynn, NJM's chief executive, wrote in a letter to customers Monday. "As a result, the insurance banking consolidation trend has largely reversed, with only a handful of insurance companies still operating under this model."

Several large insurance companies, including Met Life and Allstate, have shed their banking businesses in recent years, citing increased regulatory costs following the 2008 financial crisis.

If the deal is completed, Spencer Savings Bank would have 20 offices in New Jersey.

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