Kearny Bank has its sights set on heading west in the Garden State, expanding branch operations into Somerset and Morris counties, and a millions-of-dollars merger is set to help the financial institution achieve that goal.
The holding companies for Kearny and Millington Banks – Kearny Financial Corp. and MSB Financial Corp., respectively – announced entering a definitive agreement Wednesday evening that will merge Millington with and into Kearny in a deal valued at more than $94 million, according to the institutions.
“I am very pleased to announce our partnership with Millington Bank,” Kearny President and Chief Executive Officer Craig Montanaro said in a prepared statement. “We are two strong community banks with well over two combined centuries of rich history serving our clients and the surrounding communities.
“We welcome the Millington employees and clients and feel that our expanded product suite and focus on digital technologies will offer an opportunity to further grow the combined franchise which makes this a winning combination for all concerned,” he added.
The deal has already received approval from the boards of both banks and closing is expected during the second quarter of 2020, subject to the approval of Millington shareholders, receipt of regulatory approvals and other customary closing conditions, the banks said.
Kearny said its closing stock price on Dec. 17 was $14.10 per share. Outstanding shares of Millington common stock can be exchanged for 1.3 shares of KRNY common stock, or $18 cash, according to the banks. That, however, is subject to proration to ensure in aggregate that 10 percent of Millington shares will be converted into cash and 90 percent into Kearny stock, so that at closing Kearny shareholders will own approximately 94 percent of the combined company and Millington the remaining, approximate 6 percent.
In a statement, Millington Bank President and CEO Michael Shriner said the deal would expand financial services to Millington’s employees, customers and the communities it operates in.
The merger is expected to immediately increase earnings per share for Kearny by about 11 percent, the bank said, with fully phased in non-interest expense cost savings.
With a combined 52 full-service branch locations, the institutions said the combined company is expected to boast approximately $7.25 billion in assets, $5.1 billion in loans and $4.67 billion in deposits, on a pro forma basis.
As of Sept. 30, Fairfield-based state-chartered savings bank Kearny had about $6.6 billion in total assets and state-chartered savings bank Millington, with headquarters in its namesake town, had approximately $591 million.
PNC FIG Advisory Inc. was financial advisor to Kearny while FinPro Capital Advisors Inc. advised Millington in that regard. Legal counsel was provided to Kearny by Luse Gorman PC; Jones Walker LLP served as legal counsel for Millington.
Kearny Bank will host a conference at 10:00 a.m. on Dec. 19 to discuss the deal; the toll-free number to listen in is (888) 317-6016.