PhillyDeals: What happened with Bryn Mawr Trust purchase?

The Federal Reserve Bank of Phila. has asked the Justice Department to investigate Customers Bancorp lending.
The Federal Reserve Bank of Phila. has asked the Justice Department to investigate Customers Bancorp lending. (AP)
Posted: August 14, 2013

Bryn Mawr Trust Co., which has been trying to expand its status as the biggest bank still based in the Philadelphia suburbs, has canceled its $33 million plan to buy MidCoast Bank and its Delaware branches after MidCoast chief executive James A. Ladio abruptly left.

Bryn Mawr CEO Ted Peters had named Ladio to run the banks' combined Delaware operations. The two had been meeting with local clients and Delaware potentates in advance of the merger.

Did Ladio's departure spoil the deal? Peters told me he couldn't comment beyond a terse notice to the Securities and Exchange Commission, citing a confidentiality agreement. Acting MidCoast chief James Keegan sent a statement declining to talk about "employment issues" concerning Ladio, his ex-boss. About the merger, MidCoast added: "Both organizations mutually decided to go their separate ways."

What does the failed acquisition mean for Bryn Mawr's future? Expect the bank to keep looking for smaller banks to buy - while avoiding getting picked up itself by a bigger acquirer - as Peters moves toward his scheduled retirement late next year, bank analyst Casey Orr told clients of Sandler O'Neill & Partners in a report.

Bank mergers typically fall apart for one of two reasons: Either the buyer finds more bad loans than it expected in the seller's portfolio or the people turn out to be a bad fit, added Matthew Schultheis, bank analyst at Boenning & Scattergood in West Conshohocken.


Banks get in trouble with the government when they lend too much - and not enough.

The Federal Reserve Bank of Philadelphia has referred another area lender to the Justice Department to investigate possible discrimination against home buyers in poor neighborhoods.

In its latest quarterly report to the SEC, Customers Bancorp of Wyomissing, Pa., the fast-growing lender run by former Sovereign Bank chief Jay S. Sidhu, told investors the Philly Fed believes Customers "has not complied with certain provisions of the Equal Credit Opportunity Act, Fair Housing Act, and Regulation B with regard to portions of the city of Philadelphia," and was referring the matter to Justice for investigation.

The Equal Credit law "prohibits credit discrimination on the basis of race, color, religion, national origin, sex, marital status, age, or because you get public assistance." The Fair Credit law prohibits banks from rejecting or overcharging borrowers on similar grounds. Regulation B prohibits a lender from discriminatorily discouraging "reasonable" borrowers from applying for a loan.

Customers also said it has followed the law, and added that no one from Justice has been in touch.

Still, the Fed's move means Customers can now expect to spend time and money addressing the issue, and its planned purchase of CMS Bancorp Inc., up in Westchester County, N.Y., "is in jeopardy of not receiving regulatory approval and falling through," analyst Schultheis told clients in a report. Sidhu didn't immediately reply to a request for further comment.

Before admitting that its fair-lending record had been challenged, Customers last week announced a loan office in largely African American North Philly. Sidhu has previously said his bank would target working-class neighborhoods - West Philly, Germantown, Northeast Philly - that he says have been left behind in banks' rush to finance downtown projects.

Beneficial Bank, the largest bank still based in Philadelphia, also faces federal scrutiny of its fair-lending record, the bank said this year.

Contact Joseph N. DiStefano at 215-854-5194 or

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