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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
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,
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.
Franklin Corner Road, Lawrenceville 08648. Wendell T. Breithaupt,
president and CEO. 609-844-3100; fax, 609-844-0101.
Suite 108, CN 5349, Princeton 08543-5279. Richard M. Conley, partner.
609-896-0011. Home page: http://www.archerlaw.com.
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
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.
Robbinsville 08611. James C. Shaffer, sales manager. 609-890-3232;
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
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.
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
609-520-0638. E-mail: email@example.com. 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
fax, 609-452-1890. Home page: http://www.lipo.com.
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
on Texas Avenue and had worked at Joel Richard Haircutters.
FMC Corp. on Route 1 North.
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