Customers Bancorp, which currently has a single branch in Rye Brook and is seeking to expand its presence in the New York market, has agreed to buy CMS Bank, a five-branch bank headquartered in White Plains, for almost $21 million.
Customers Bancorp will now have retail banking offices in Eastchester, Greenburgh, Mount Vernon, West Harrison and Mount Kisco, as well as approximately $185 million in loans and $208 million in deposits.
Customers has $2 billion in assets and is considered a “super-community bank.” CMS has almost $250 million in assets. Customers”™ CEO is Jay Sidhu, who has been referred to in reports as a “serial dealmaker.” He is the former CEO of Sovereign Bancorp, which he built into the 17th largest bank in the U.S.
“We believe that these transactions will allow Customers Bank to better serve small to medium-size businesses, professionals, multifamily projects, commercial real estate projects, individuals and families in Westchester,” he said. The deal is expected to close in the first half of next year.
In mid-June, Customers Bancorp bought Acacia Savings Bank from Ameritas Mutual Cos. for $65 million. That transaction will add the one branch of Acacia to the Customers Bank franchise and also comes with a regional mortgage banking operation. “We intend to complete our approval process for Acacia, close it and then close the CMS transaction,” Sidhu said in a statement. “After closing the CMS transaction, we hope to gradually continue expanding in the New York market, however, principally through organic growth.”
Some reports cited analysts as saying Sidhu had paid a premium for CMS, but Richard Ehst, Customers”™ chief operating officer, said no, that Customers is paying 95 percent of book value for the bank. He said the uncertain regulatory environment is causing many community banks to look for buyers. “CMS, like so many other banks of that size, found that given the regulatory environment it”™s hard for them at that size to make money,” he said. “There will be an extraordinary increase in compliance costs as a result of Dodd-Frank.”
In addition to Acacia, Customers has made five acquisitions in three years.
“Last year we closed on Berkshire Bank, a community bank in Berks County, Pennsylvania,” Ehst said. “In 2010 we bought two failed banks from the FDIC, USA Bank in Port Chester, we closed it and moved it to Rye, (as the branch that is now in the Rye Ridge Shopping Center), and we bought ISN Bank in Cherry Hill, New Jersey (a one-office bank which conducted most of its deposit business over the Internet).”
Ehst said the biggest point of opportunity for Customers right now is to move into markets dominated by major banks, which are not currently served by smaller banks.
Staff Reporter Patrick Gallagher contributed to this report.Â
