RSI Bank started the month of May as a part of Columbia, with the latter — comprised of Columbia Bank MHC, Columbia Financial Inc. and Columbia Bank — announcing it completed its acquisition of the Rahway-based target, effective May 1.
The deal was unveiled in December 2021, the same day that Fair Lawn-based Columbia announced completing its acquisition of Freehold Bank, Monmouth County’s oldest savings institution, which had operated in its namesake city for more than 167 years. Financial terms of the RSI deal were not disclosed.
Effective at the time of the merger, RSI — RSI Bancorp MHC, RSI Bancorp Inc. and RSI Bank — merged with and into Columbia with its depositors becoming those of the acquirer, “as if their accounts had been established in Columbia Bank on the date established at RSI Bank,” according to an announcement of the completed deal.
“We are excited to be combining two like-minded financial institutions that hold quality customer service and community support as a top priority. Adding the talented staff will ensure a seamless transition for our new customers,” said Columbia President and CEO Thomas Kemly.
He also announced the addition of RSI Bank President and CEO David Taylor to the board of directors for Columbia Bank. “Mr. Taylor’s industry experience will be a great addition to our existing board and contribute to Columbia Bank’s future growth and community support initiatives,” Kemly said.
As part of the transaction, Columbia Financial issued more than 6 million shares of its common stock to Columbia Bank MCH. RSI Bank, meanwhile, made a $5 million charitable contribution to a donor advised fund at the Community Foundation of New Jersey in connection with the transaction. RSI’s former directors will have authority over grants made from that entity’s fund to support charitable organizations serving the communities the bank previously operated in.
At the time the deal was announced, Columbia said it offered full employment to all RSI employees upon completion of the merger. Kemly said then that the transaction would strengthen Columbia’s presence in Middlesex and Union counties.
“We are excited to partner with Columbia Bank, a leading New Jersey-based community bank,” Taylor said in December. “The merger will provide an opportunity for our customers to join a larger banking network, with expanded products and services, while employees will benefit from the opportunity to work for a rapidly growing community bank.”
According to RSI, it is the state’s oldest mutual savings bank (founded in 1851), surviving from the Civil War through the COVID-19 pandemic. It has four office locations. As of Dec. 31, 2021, the most recent information available, it had total assets of $626 million, deposits of $515 million and equity capital of $92 million.
In December, Columbia said it expected the RSI transaction to be 2.6% accretive to its 2023 net income, but 4.1% dilutive to 2023 earnings per share due to the additional shares issued to Columbia Bank MHC. The bank projected the transaction would be approximately 5.6% accretive to fully converted tangible book value. In its First Quarter 2022 Financial Results, released April 27, Columbia reported net income of $20.4 million — a decrease of 3.0% compared to the same time period in 2021. As of Dec. 31, 2021, it had total assets of $8.9 billion, deposits of $8 billion and total equity capital of $938 million.
Columbia was advised in the RSI transaction by Boenning & Scattergood Inc. and represented by law firm Kilpatrick Townsend & Stockton LLP; FinPro Capital Advisors Inc. advised RSI and the bank was represented by law firm Luse Gorman PC, which also recently served as advisor to Lakeland Bank in its acquisition of 1st Constitution Bank.