Magazine article American Banker

Stocks: Feisty N.J. Banks Said to Hold Own against Invaders

Magazine article American Banker

Stocks: Feisty N.J. Banks Said to Hold Own against Invaders

Article excerpt

The big banks that have invaded New Jersey get most of the attention, but investors are starting to take notice of some smaller, locally headquartered competitors, too.

Shares of Commerce Bancorp of Cherry Hill are up 42%, to $42.1875, since the beginning of the year, and Hudson United Bancorp of Mahwah is up 7.3%, to $31.75.

Valley National Corp., of Wayne, has slipped 2%, to $28.8125. But it is also among the banks mentioned by analyst David Trone of Credit Suisse First Boston, who says the smaller companies are gaining market share at the expense of the new, larger competitors.

The smaller institutions "are exploiting the fallout from the big banks," he said, adding that the money being gathered goes beyond what usually occurs when an out-of-state banking company enters an area.

The community banks "are going out of their way, urging customers to visit their branches and open accounts that carry no fees," he said. Mr. Trone who recently started coverage of the companies with hold ratings, said he sees long-term potential.

A representative of First Union Corp., which is the biggest of the outof-state competitors in New Jersey, took issue with the notion that the smaller banks are taking away business, saying any decrease in deposit dollars is made up for in sales of investment products.

But, like Mr. Trone, who based his conclusions on conversations with management of the smaller banks, the First Union spokeswoman did not cite deposit share data. …

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