Magazine article American Banker

Sovereign Gets a Lift from New Jersey Deal

Magazine article American Banker

Sovereign Gets a Lift from New Jersey Deal

Article excerpt

Sovereign Bancorp, whose stock has gained 70% this year, is expanding yet again in New Jersey.

The 1.3 billion-asset Pennsylvania thrift is buying Jersey Shore Savings and Loan Association, its fourth deal inside the neighboring state in the past year.

On Monday the shares were ahead 50 cents, to $13.50. Sovereign, based in Wyomissing, near Philadelphia, was singled out in January as a strong prospect by Peter Lynch, the legendary stock picker who formerly ran the Fidelity Magellan mutual fund.

The latest transaction will involved a merger-conversion of Jersey Shore, a mutual-form thrift based in Toms River. It has assets of $600 million and 14 offices, with significant market share in Monmouth and Ocean counties.

Sovereign will inject $40 million of fresh capital into the thrift, which has been short on capital because of more stringent regulatory requirements but which does not have significant asset quality problems.

Jersey Shore is well managed, conservative, and has been profitable for the last 10 years," said Jay S. Sidhu, president and chief executive officer of Sovereign.

"Sovereign in the most efficient thrift in the Middle Atlantic region, and they're among the very best in the country. This looks like another good move for them," said Samuel J. Beebe, a securities analyst with Robert W. Baird & Co., Tampa, Fla.

Complementary Acquisition

The latest move will complement the deal announced on July 1 for Sovereign to pay $85 million to acquire Harmonia Bancorp. …

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