Merger Becomes Official Germantown Savings Is Now Part Of Corestates. No Immediate Changes For Customers Are Seen.

Posted: December 03, 1994

Another Philadelphia financial institution went into the history books yesterday, as Germantown Savings Bank was formally merged into CoreStates

Financial Corp. for about $260 million in cash and stock.

The deal's closing ends a process that began more than a year ago, when GSB

put itself up for sale to the highest bidder. Although it was financially healthy, the 140-year-old savings bank faced stiffening competition from still-growing giant regional banks such as CoreStates, Mellon, First Fidelity and PNC.

CoreStates won the bidding with a $62 per share cash and stock offer. It was the Philadelphia-based bank's third significant acquisition within a year. Its completion makes CoreStates a $29 billion commercial bank, about 30th largest nationwide.

Germantown Savings customers won't see any immediate change. GSB checking accounts and certificates of deposit will continue to function as before until next March, when CoreStates plans to consolidate all of the savings bank's services and processing systems with its own.

CoreStates officials didn't say yesterday which GSB branches they planned to close, although officials of the big Philadelphia-based bank had estimated that more than half the former savings bank's offices would merge with nearby CoreStates branches.

A CoreStates spokesman said that 24 GSB employees were laid off as of yesterday, and that another 173 have been told they will be let go by March. Unaffected so far, the spokesman said, are workers in the GSB branches - tellers, customer-service people and the like. Their futures will depend on how CoreStates merges Germantown's branches with its own.

CoreStates chairman Terrence Larsen said when the merger was announced in March that GSB's 599 employees would be considered "part of the CoreStates family," and that the bank would try "to keep every affected employee that we possibly can."

In September, however, CoreStates froze nearly all new hiring as part of a company-wide drive to cut costs and improve revenues. Dubbed the "BEST" program by CoreStates managers, the program left a lot of Germantown employees out in the cold.

"The BEST program froze everything instantly," one GSB employee said.

Most of GSB's top executives left as of yesterday, and most of the rest will be gone from the company by March.

"It's too bad," one bank officer said. "This was really a nice place to work."

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