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The former chairman of Sovereign Bancorp Inc. was named chairman and chief executive of New Century Bank, a privately held, fi ve-branch community bank based in Phoenixville, about a month after being named to its board of directors, and said he plans to expand the branch network rapidly, into Berks County, southeast Pennsylvania and New Jersey.
Sovereign became part of the Spanish banking giant Banco Santander in January. Sidhu said that with the completion of that acquisition, his noncompete clause -- preventing him from competing with Sovereign -- expired.
Sidhu said he has raised $13.6 million for New Century through his own and friends' and family's investments.
As he did with Sovereign, the executive plans to grow New Century through organic growth and acquisitions, along with private equity.
As of June 4, the bank reported assets of about $265 million; Sidhu said plans are to increase that to the billiondollar level as quickly as possible. Eventually, a public offering will be held.
Sidhu said it is an ideal time to get back into banking.
"The industry is in disarray, and all the community banks and larger banks are very internally focused," he said in an interview with the Reading Eagle. "Their business models are being challenged and revamped -- appropriately so. And over the years, people had forgotten that the basics of banking is customer service.
"A small-bank model is needed, but small is now a billion dollars. So when you combine access to capital and talent, you have a winning combination. I'm very optimistic about the future."
He characterized New Century as a "clean" bank focused on community banking, profitability and growth, and said that was why it was a good match for him.
"They have the highest level of integrity you can imagine, and that to me, after my experience with the hedge-fund managers at Sovereign, that's what really turned me on," he said.
Sidhu succeeds Kenneth B. Mumma as chairman and CEO.
In a statement, Mumma said: "With the addition of Jay and the successful capital raise, we believe we have achieved our goal of positioning New Century Bank to successfully move to the next level of growth while creating long-term shareholder value."
Contact Tony Lucia: 610-371-5046 or tlucia@readingeagle.com.
To see more of the Reading Eagle, or to subscribe, go to http://www.readingeagle.com. Copyright (c) 2009, Reading Eagle, Pa. Distributed by McClatchy-Tribune Information Services. For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.
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