Banks formally combine
BY DAVID FALCHEK
Times Shamrock Writer
A new banking company formed Monday, completing the combination of Penn Security Bank & Trust and Peoples Neighborhood Bank.
With $1.6 billion in assets and operating 25 branches, the Scranton-based Peoples Security Bank will be the largest locally-based community bank in Northeast Pennsylvania with a footprint stretching from the greater Scranton area into the Endless Mountains and pushing into New York.
Architects of the $161.6 million deal have ambitions to actively pursue other acquisition opportunities – even some outside of the region, a move that could bring more mid- and upper-level jobs to the area.
While the business and legal combination of the banks completed Monday, full integration of the banks, their technology and branches won’t take place until next April, said Craig Best, chief executive officer of Peoples Financial Services Corp.
As April approaches, all customers will receive materials outlining the deal and what they can expect.
Often bank mergers lead to the consolidation of individual offices as the successor bank tweaks the branch network. That won’t happen at Peoples Security, Best said. One of the strong points of the merger was that the service areas of each company were complementary. The only branches in close proximity are Peoples in Glenburn and Penn Security in the Clarks Summit and both those branches have a strong deposit and customer base, Best said. Customers don’t need to worry, for example, about their checks not working and they can proceed with banking as usual.
“Whatever the customer needs to do will be done by the bank,” Best said.
Peoples Security is already talking about other acquisitions, hoping to take advantage of an environment of mounting costs of compliance and regulation that has squeezed small banks.
“Much regulatory costs are fixed,” Best said. “At our new size and scale, we are better able to absorb those costs and hope to bring in other banks from outside the area – in places such as Williamsport, Hershey, Harrisburg or Lehigh Valley.”
Such acquisitions would increase employment in the downtown Scranton headquarters, Best said. Peoples Security is the 16th largest bank in Pennsylvania.
“With greater regulatory burdens, smaller banks find it tougher and more are looking to sell out,” said Bert Ely, financial institution consultant in Alexandria, Va.