New Jersey based banks Valley National Bancorp and Oritani Financial Corp, two banks focused on the north eastern markets, announced a merger that will cover the core of New Jersey, Bergin County, and Hudson County. The transaction is worth about $740 million.
Despite Valley’s regional focus, it has $32.5 billion in assets, and will add an additional $4.1 billion after acquisition, along with 26 additional offices.
Ira Robbins, Valley's President & CEO commented that, “Oritani’s conservative credit culture, combined with their customer focus should mesh seamlessly with that of Valley and our vision forward. This capital-enriching transaction will enable Valley to continue to focus on improving the growth profile throughout its entire franchise, while providing enhanced products, services and delivery channels to Oritani’s existing customer base.”
While large bank mergers have struggled to come to fruition, such as Commerzbank and Deutsche Bank, acquisitions in the middle market have continued and will likely continue as community banks seek to scale while still maintaining local market advantage.
The present CEO of Oritani emphasized the infrastructure that will be available to their present customers. “We are thrilled about this combination with Valley. The infrastructure that has been assembled at Valley over the past few years will enable our customers to access a substantial product offering while still receiving the local decision making and the exceptional service they have become accustomed to at Oritani,” he said.
In conjunction with the closing of this transaction, Valley is planning on restructuring approximately $635 million of higher cost FHLB borrowings. Valley anticipates the result of the merger, combined with debt restructuring will be immediately neutral to slightly accretive to earnings per share and tangible book value while increasing Tier 1 Common Equity by over 50 basis points.
The new bank will have a total of 245 branches with 151 in northern and central New Jersey, 38 in Manhattan, Queens, Brooklyn, and Long Island along with 41 in Florida and 15 in Alabama. Both banks are presently listed on the NASDAQ.