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Bryn Mawr's Royal Bancshares deal provides steppingstone into NJ

Bryn Mawr, Pa.- based Bryn Mawr Bank Corp. is looking at an opportunity to tap lucrative New Jersey markets with a recently announced deal.

Bryn Mawr, a bank with $3.42 billion in assets, agreed to buy Bala Cynwyd, Pa-based Royal Bancshares of Pennsylvania Inc. in a deal valued at $127.7 million. The transaction, expected to add more than $600 million in loans and $630 million in deposits, will push the company's total assets to approximately $4.3 billion. Bryn Mawr expects single-digit accretion beginning in 2018.

A loan production office that opened in 2014 in Princeton, N.J., will provide the company entrance into a "lucrative market," Bryn Mawr President and CEO Francis Leto said during a Jan. 31 conference call. Leto said that New Jersey has always been an area the company has explored in terms of expansion and said it considers the market "really just a suburb of Philadelphia."

He said Bryn Mawr has been especially interested in Princeton and that the location allows the company to offer products such as wealth management and insurances services. Royal Bancshares President and CEO Kevin Tylus, who is from Princeton, will join Bryan Mawr as managing director of new markets following completion of the deal.

"We're hoping to continue to build out in that central New Jersey up to the north New Jersey area, and I think Kevin will be the leader for that," Leto said.

He added that the company is comfortable with its branch concentration, but it "always likes to fill in gaps." He didn't say if the company would be closing any overlapping branches.

CFO Michael Harrington said the deal combines similar institutions, which will help with the integration process. On the synergies front, he noted that the companies share the same core processing vendor. The company is expecting cost saves of 40% of its current general and administrative expenses.

Leto said the the companies' culture and approach to credit are similar. Both companies have similar concentrations in commercial real estate, which Leto said Bryn Mawr is comfortable with, though Bryn Mawr's concentration is expected to increase slightly after the merger.

Leto said the company will consider future mergers and acquisitions that fit its internal model. "I think anything that is strategic and makes sense and sort of fits our internal model, we will consider," Leto added. "And I think we've been pretty agnostic as to the type of deal. And as to the geography, I think it's just got to make sense for us. And I think this was a great example of being strategic."