The planned acquisition of Graystone Bank’s parent company, Tower Bancorp Inc., by Susquehanna Bancshares will bring a wider variety of services to Graystone’s customers in the State College area, a spokesman said Thursday.
And while there’s ‘no guarantee’ that the transaction will not bear some job cuts locally, any reductions are expected to be ‘very limited,’ he said.
‘I think it’s a positive for customers, definitely, and I think it’s a positive for State College,’ Tower Bancorp spokesman Brent Smith said of the acquisition plan. He said it will bring more in-depth wealth-management services, more expansive loan services for local businesses, and ‘a platform (for us) to do some bigger loans to bigger customers in the State College area.’
Litiz-based Susquehanna, known commercially as Susquehanna Bank, and Harrisburg-based Tower announced the $343 million acquisition arrangement earlier this month. Pending government approvals, the transaction is expected to be complete in the first quarter of 2012.
At that point, Graystone Bank branches are to be rebranded as Susquehanna Bank operations and absorbed into Susquehanna Bancshares.
‘I have been in banking in the State College market for 33 years and have been through many industry changes and acquisitions,’ said Graystone regional President Jack Infield. ‘The affiliation with Susquehanna Bank is an excellent step forward for both organizations. The combined company will continue to focus on community banking and provide a wider array of products and services to our customers and communities.’
The combined company may eliminate some duplicate positions, primarily in the Harrisburg region, Smith said. Tower-owned Graystone, established in 2005, has 20 to 25 employees in its two State College-area offices, regarded largely ‘a production operation,’ he said.
Infield said the State College-area employee base is projected to grow to 30 to 35 within the next year.
Back in Harrisburg, Smith said Tower has always been open to consolidation ‘if it made sense for our shareholders, communities, employees and customers.’
But about six months ago, he said, Tower’s board and management became convinced that consolidation will be necessary if the operation is to keep thriving.
‘With the new (federal) regulations’ on banking, Smith said, ‘you’re going to continue to see contracting revenues.’
He pointed specifically to the Dodd-Frank Wall Street Reform and Consumer Protection Act, regulatory legislation that Smith said will make it more difficult for some smaller banks to thrive and maintain current profit levels.
‘Thriving and providing the necessary return for shareholders is something we were focused on,’ Smith said.
And so, he said, Tower’s board made a strategic decision to try to identify a partner who would fit well.
‘This acquisition was really a proactive move by (Tower) management,’ Smith said. ‘It’s always hard to anticipate what’s around the bend, but with what the board and management saw with regulations and the need for critical mass … it was really a proactive search for a partner,’ and not a distressed sale.
Tower holds about $2.6 billion in assets, Smith said; Susquehanna, about $14 billion. Tower, through its divisions branded Graystone, Tower and 1N, respectively, operates 49 branches in central and southeastern Pennsylvania and Maryland.
The two Graystone branches in State College are at 1705 N. Atherton St. and 329 E. Beaver Ave.
Susquehanna counts about 220 branches in the mid-Atlantic region.
‘This combination has tremendous benefits for shareholders, customers and communities,’ Susquehanna CEO William J. Reuter said in a joint news release. ‘By increasing our market share in several of the counties we currently serve and by entering new markets, we will give customers of both institutions the added conveniences of an expanded network of branches and ATMs.
‘We’ll also be able to offer customers access to a broad array of full-service banking products, considerable small-business lending opportunities, enhanced technology and comprehensive wealth-management services,’ Reuter went on.
Both Tower and Susquehanna officials have said their organizations share similar values, with a core focus on community banking and customer service. After Susquehanna closes its acquisition of Tower and a separate acquisition of Abington Bancorp, it will be the largest community bank in Pennsylvania, according to the news release.
