Magazine article American Banker

Summit to Buy N.J. Neighbor, Asserting Its Independence

Magazine article American Banker

Summit to Buy N.J. Neighbor, Asserting Its Independence

Article excerpt

Reasserting its desire to remain independent, Summit Bancorp said it had agreed to acquire BMJ Financial Corp. of Bordentown, N.J., in a tax-free exchange of stock worth $164.5 million.

The deal would bring Summit, a $22 billion-asset holding company based in Princeton, N.J., an additional $650 million in assets and 20 branches.

"This acquisition will enhance Summit's presence in key central and southern New Jersey counties comprising nearly 5,000 businesses and a half million households," said chairman and chief executive T. Joseph Semrod.

Analysts said the transaction was well reasoned, though they noted that the price, $21.77 per share, was a relatively steep 2.51 times BMJ's book value.

But observers seemed to think it was worth it. The larger Summit's presence in New Jersey, the less likely it is to be taken over, according to Anthony R. Davis, a bank equity analyst at Dean Witter. And independence has been a watchword at the company, which resulted from the merger in March of Summit with UJB Financial Corp.

"Before UJB and Summit merged, they had been a major force in northern and central New Jersey," Mr. Davis said. "This acquisition gives them balance in the southern part of the state."

He and others noted that the BMJ deal is also in keeping with a transaction Summit closed in May: the purchase of Central Jersey Financial Corp., a $466.2 million-asset thrift company in East Brunswick.

"This acquisition complements and solidifies that announcement," said David Winton, an analyst with Keefe, Bruyette, & Woods Inc. …

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