UJB Financial to buy Summit Bancorp in a stock swap

Corporate Growth Report Weekly, Sep 25, 1995

UJB Financial Corp., the third-largest bank in New Jersey based in Princeton, and Summit Bancorp, the sixth largest with headquarters in Chatham, have agreed to merge in a $1.2-billion stock deal. The combination, which will result in the second-largest bank in New Jersey, is the latest in a series of mergers and acquisitions in the banking industry.

The new corporation will function under the Summit Bank Corp. name with $22 billion in assets, deposits of $17.6 billion and shareholder equity of $1.7 billion. It's chief executive, T. Joseph Semrod, and a majority of its board will come from UFB, the parent company of the United Jersey Bank, while Summit President Robert Cox will retain his position with the new company and will also join the bank's board. According to terms of the deal, which will have a value of $31.95 per share for Summit stockholders, they will receive 0.90 of a share of UJB common stock for each share of Summit in a tax-free exchange that will be reflected as a pooling-of-interests. Summit will now be one of the 35 biggest banks in the nation, following on the heels of First Union Corp.'s $5.4-billion purchase of First Fidelity Bancorp, New Jersey's biggest bank and the merger of Chase Manhattan and Chemical Bank into the country's biggest bank. Bankers and analysts have already predicted that the merger will make Summit an even more attractive target to out-of-state buyers. Should the new bank be sold or merged with another, the transaction will place Summit in a position to ask a higher price. Big acquisitive banking companies such as BankAmerica or NationsBank, they estimate, might pay over $40 a share for the new Summit.