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Corrections or additions?

These articles were published

in U.S. 1 Newspaper on April 15, 1998. All rights reserved.

Life in the Fast Lane

At the same time that two giant bank mergers made national

headlines, the small bank headquartered on Franklin Corner Road quietly

added $238 million to its coffers. Brand-new shares of Trenton Savings

Bank were traded for the first time on NASDAQ last week; these shares

represent the final step in converting a mutual thrift bank (Trenton

Savings) to a 100 percent publicly held savings bank and bank holding

company (Peoples Bancorp).

Only depositors were eligible to buy the second round of shares, and

the stock sold so briskly that the old shares split for the maximum

amount — 3.8 shares for each share of stock bought at $10. A total

of 3,693 depositors bought stock, and 475 were turned away, says Robert

Hollenbeck, vice president in charge of investor relations. While

the $238 million was the maximum that bank could have raised, the

bank is only expressing mild enthusiasm in the offering’s success.

The last few mutual thrift conversions "had been going out at

the super-max," says Hollenbeck, although Trenton Savings Bank

is the largest of its type.

"We certainly were pleased with the result of the offering,"

says Wendell Breithaupt, the bank’s president and CEO. "The first

time around as a mutual holding company we sold about 36 percent of

the bank and raised about $31 million. This time we sold the balance

of the bank, 64 percent, and we sold almost 24 million shares at $10

a share."

In the banking world, conversions are all the rage right now —

maybe too much of a rage. "There are a tremendous number of these

issues coming to the marketplace all of sudden," Breithaupt says.

"There are so many it may only be a relatively short matter of

time until some of the bloom wears off a little bit on the rose."

But compared to other conversions, the Peoples Bancorp transaction

— raising $238 million — was mild and controlled. "Even

though conversions are hot this deal didn’t have a particular pop

that other standard conversions had," says Jason Warner, a research

analyst with Tucker Anthony in Chicago. "Other standard conversions

that we’re seeing are shooting up 50 percent in one day."

"With Peoples, because it already had existing shares trading

and because of the way they structured the deal, they were able to

sell it at a premium to book value, the pop wasn’t there." In

standard conversions, shares are sold at greater discounts to book

value, enabling bigger price jumps when trading. However, thrift banks

like Trenton Savings Bank are currently making it a habit to trade

at a premium to book value, Warner says. "The Peoples deal’s pro

forma book was $8.53, its shares were at $10. It was coming at a premium."

For stocks sold at discounts to book value, the jumps in price can

be dramatic. "We had one deal last month that went from $10 to

$20 and change on its first day," he says.

But as Breithaupt explains, doing the two-step public offering may

have put a damper on the amount raised, but that gave the company

more control of its growth. "That’s the maximum that we wanted

to raise," he says. "The use of the proceeds is the major

issue, this is a substantial amount of capital we wanted to employ;

we didn’t want to employ a large amount of capital because of the

difficulty of employing it properly and prudently."

Displaying an ability to pace itself was a goal to the bank. "We

could’ve gone public all at once several years ago," says Breithaupt.

"We decided against that because we wanted to start with a limited

amount of capital and work into a game plan and get comfortable with


When the new year began, the bank officers saw market conditions become

optimal. "In early ’98 we felt that the market was never going

to be more receptive than it was or is right now," says Breithaupt.

"I think that as a whole mutual holding company stocks were undervalued

and the conversion left a lot of room for growth in the stock value."

Prior, Trenton Savings Bank had grown the confidence of its investors. From

its initial offering in August, 1995, to December of 1997, the price

increased from $10 a share to $45.50. During that period of time,

Trenton Savings acquired a commercial bank, Burlington County Bank,

bought a trust company, Manchester Trust Bank, and started an independent

asset-based lending corporation, TSBusiness Finance. It also opened

two new branches, implemented a telephone banking system, a debit

card program, and increased its ATM penetration, Breithaupt reports.

"I think the investors saw all of those activities as a sign of

good management and an opportunity to see their investment grow once

again," he says. "I think there were a lot of people who anticipate

that the stock would continue to grow in value. The stock was at a

good price in the eyes of the investors."

With the new infusion of cash, Trenton Savings Bank will continue

buying companies in the financial services industry, including such

types of allied financial services as money managers and mortgage

bankers. For a brief time, it will implement a capital management

program to approach the regulators to get approvals for stock buy-backs,

dividend increases, and a tax-free return of capital to investors,

Breithaupt reports.

The talk of uniting Nationsbank with BankAmerica and First Chicago

and Banc One echoes the commotion created by the CoreStates and First

Union merger, and it raises the same kinds of questions about whether

consumers will be well-served by such giant institutions. Evidently

the stockholders believe that Peoples Bancorp — now the ninth

largest bank holding company in the New Jersey — is large enough

to be profitable and small enough to attract customers.

Trenton Savings Bank (Peoples Bancorp Inc.), 134

Franklin Corner Road, Lawrenceville 08648. Wendell T. Breithaupt,

president and CEO. 609-844-3100; fax, 609-844-0101.

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Law Moves

Archer & Greiner, 993 Lenox Drive, Building Two,

Suite 108, CN 5349, Princeton 08543-5279. Richard M. Conley, partner.

609-896-0011. Home page:

Harry Haushalter, Route 33, Lexington Square Commons,

Hamilton Square 08690. 609-631-7388.

Conley & Haushalter, founded in 1988 by Richard M. Conley and Harry

Haushalter, has dissolved. Conley has been picked up by Archer & Greiner,

the Haddonfield-based firm that moved into Conley & Haushalter’s space

at 993 Lenox Drive. Haushalter has opened his own practice in Lexington

Square Commons.

Conley is the resident manager of the Princeton office, and represents

private and municipal clients in state and local tax matters. Before

co-founding Conley & Haushalter he was one of the original judges

on the New Jersey Tax Court. He also served as deputy attorney for

the State of New Jersey and was assistant counsel to Governor William

T. Cahill. Conley has an LLB from Harvard Law School.

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Monroe/Savin Corporation, 2A South Gold Drive,

Robbinsville 08611. James C. Shaffer, sales manager. 609-890-3232;

fax, 609-587-2075.

The office supply company moved from 3,000 feet at 707 Alexander to

larger quarters at South Gold Drive. The company has added three more

employees, bringing the total to 25, and plans to use a warehouse

there as well. The phone and fax are new. The toll free number is


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Crosstown Moves

First Century Partners, 113 Herrontown Lane, Princeton

08540. 609-683-8848; fax, 609-683-8123.

Michael J. Myers, the venture capitalist, moved his office from 1

Palmer Square to a home office at 113 Herrontown Lane.

Riviera Finance, 3635 Quakerbridge Road, University

Office Plaza 1, Suite 4, Mercerville 08619. Kristin Dorfman, manager.

609-275-1399; fax, 609-631-7455.

The factoring firm moved from 3 Independence Way to 3635 Quakerbridge

Road. The toll free number is 800-322-8488. The headquarters is in

Redondo Beach, California. The firm had 18 employees at Independence


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Contracts Awarded

Sensors Unlimited, 3490 Route 1, Building 12, Princeton 08540. Gregory H. Olsen, president.

609-520-0610; fax,

609-520-0638. E-mail: Home page:

The firm has registered as an ISO 9000 firm after participating in a

training consortium program that received funding from the state labor

department. The registration "demonstrates the company’s commitment

and adherence to known international management system standards" and

provides "one of the strongest assurances of product quality


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Management Moves

The Liposome Company Inc., 1 Research Way, Princeton 08540. Charles A. Baker, chairman and CEO.


fax, 609-452-1890. Home page:

The biotech firm has named Lawrence R. Hoffman as chief financial

officer. Hoffman, 43, was formerly CFO and acting COO of IGI Inc.

Prior to that he was treasurer and acting CFO for Sybron Chemicals. He

has a BS in accounting from LaSalle University, a JD from Temple

University and an LLM in taxation from Villanova.

Liposome is currently making preparations to file a new drug

application for its newest drug, Evacet, which treats metastatic

breast cancer.

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Stacy Kay Johnson, 33, on April 8. She worked at ETS.

Juliette M. Furch, 42, on April 9. She owned Salon Juliette

on Texas Avenue and had worked at Joel Richard Haircutters.

Ronald T. Kowalewski, 56, on April 5. He had worked for

FMC Corp. on Route 1 North.

Corrections or additions?

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— the web site for U.S. 1 Newspaper in Princeton, New Jersey.

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