Hubco Inc.'s feeding frenzy continues.
The Mahwah, N.J.-based bank holding company has reached an agreement to buy Growth Financial Corp., Basking Ridge, N.J., for $24.8 million.
The acquisition will be the 11th in northern New Jersey for the $1.6 billion-asset company in the last five years. The company also bought a credit card processing company, Shoppers Charge Accounts Co., last December.
The deal comes on the heels of the announcement last week of a data processing joint venture with United National Bancorp, Branchburg, N.J.
As part of the merger, $130 million-asset Growth Bank will be merged into Hudson United Bank, giving Hubco a foothold for the first time in Somerset County. Hubco currently has 58 branches in four other Garden State counties.
Growth Bank shareholders will receive Hubco stock with a value of about $14.64 per Growth share. Growth also will immediately initiate quarterly cash dividends.
The merger, which is still subject to shareholder and regulatory approval, is expected to close in the first quarter of 1996.
The deal's price surprised Ryan Beck & Co. first vice president Elizabeth A. Summers. At 1.8 times Growth's June 30 book value, the price is much lower than the recent sales of Flemington National Bank to UJB Financial Corp. and Garden State Bancshares to Summit Bancorp.
Flemington sold for 2.6 times book value, while Garden State went for 2.55 times book value.
Ms. Summers attributed the lower price to Growth Bank's size compared with the other two institutions and its tiny market share in its two counties. Growth has only 1.07% of the market in Morris County and 0.21% in Somerset.
"I think Hubco's probably got a good deal here," Ms. Summers said. "It takes them into markets where they have not been before, so they're expanding the geographic footprint."
Ms. Summers said she expects Hubco to make additional acquisitions in the two markets to build its share.
"They're going to want a major presence in this market, so I would view this as their initial entry," she said.