Summit Bancorp, UJB Financial to Merge in $1.2-Billion Deal

UJB Financial Corp. and Summit Bancorp said Monday that they agreed to merge in a $1.2-billion stock transaction that will create the second-biggest bank in New Jersey.

The combination is the latest in a string of mergers and acquisitions in the banking industry, including two previous big transactions involving major New Jersey banks.

Under the agreement, approved Sunday by the boards of both companies, Summit shareholders will receive 0.90 of a share of UJB common stock for each share of Summit in a tax-free exchange that will be accounted for as a pooling-of-interests.

The banks said the deal was worth $31.95 per share for Summit stockholders, based on the recent average closing price of UJB common stock.

In trading Monday, however, UJB lost $2.875 to $33.75 on the New York Stock Exchange, while Summit rose $3 to $28.75 on the Nasdaq market.

The new corporation, which will operate under the Summit Bank Corp. name, will have $22 billion in assets, deposits of $17.6 billion and shareholder equity of $1.7 billion.

The combination, making Summit one of the 35 biggest banks in the nation, follows First Union Corp.’s $5.4-billion purchase of First Fidelity Bancorp, New Jersey’s biggest bank, and PNC Bank Corp.’s $3-billion takeover of Midlantic Corp.

It also comes on the heels of the recently announced merger of New York-based Chase Manhattan and Chemical Bank into the country’s largest bank.

UJB Chairman Joseph Semrod will become chairman and chief executive of the new company, and Summit President Robert Cox will become president and also join the bank’s board.

Semrod said the deal will lead to job cuts, but the number won’t be announced for another few weeks. UJB has about 6,100 employees. Summit has about 1,600.