Northfield Bank is expanding its footprint in Staten Island with the acquisition of a financial institution with six locations in the borough.
On Monday, Northfield Bancorp. Inc. and VSB Bancorp Inc. – the parent company of Victory State Bank – said they entered a definitive agreement that will merge Victory with and into Northfield. The in-market acquisition represents a shared commitment to the Staten Island community, the banks said, including a focus on providing services to commercial and retail borrowers and depositors.
At the close of the transaction – which is anticipated during the second quarter of 2020 – Northfield estimates it will have combined assets of $5.2 billion, loans of $3.5 billion and deposits of $3.7 billion. Per the agreement’s terms, each share of Victory common stock will be exchanged for shares of Northfield common stock for a total consideration of about $62.9 million.
Northfield and Victory said the transaction will provide for expanded offerings to the latter’s customers, like commercial cash management services, business lending, home equity loans and lines, and lending capacity. The boards of each entity have approved the agreement.
“This merger will strengthen our over 130-year commitment to the people and businesses of Staten Island and provide greater lending capacity to Victory’s customers, improve efficiency in our combined organization, expand our market share of core deposits, and further leverage our strong capital base to support earnings growth,” Northfield President and Chief Executive Officer Steven Klein said in a prepared statement.
We have an added benefit of merging into a local institution with a major presence in the Staten Island marketplace.
– Ralph Branca, president and CEO, Victory Savings Bank
According to the banks, the deal will add approximately $157 million of total loans, with an average yield of 5.77 percent and lower funding costs with about $325 million of deposits – including $145 million of non-interest bearing demand accounts.
“Our original stockholders’ adjusted cost per share is $4.00,” Victory Chairman Joseph LiBassi said in a prepared statement. “That is a return of over 730 percent, without considering the 49 quarterly cash dividends that we have paid.”
Victory President and CEO Ralpha Branca will join Northfield in a leadership role for the Staten Island marketplace, the banks said, while Libassi has entered into a three-year consulting agreement to aid the transition.
The transaction is subject to the approval of Victory stockholders and customary regulatory approvals for both companies.
Sandler O’Neill + Partners LP served as financial advisor to Northfield, while Luse Gorman PC served as legal counsel. FinPro Capital Advisors Inc. rendered a fairness opinion in connection with the transaction, and Gallet Dreyer & Berkey LLP served as legal counsel to Victory.
Northfield Bank currently operates 40 full-service locations in Mercer, Middlesex, Hunterdon and Union counties in New Jersey, and Staten Island and Brooklyn in New York.