Kearny Financial in Fairfield, N.J., has agreed to buy Clifton Bancorp in New Jersey.
The $4.8 billion-asset Kearny said in a press release Wednesday that it will pay $408 million in stock for the $1.6 billion-asset Clifton. The deal, which is expected to close in the first quarter, prices Clifton at 138% of its tangible book value.
Clifton has 12 branches, $1.1 billion of loans and $915 million of deposits.
“We believe that this partnership is an excellent fit from both a cultural and operating model perspective,” Craig Montanaro, Kearny’s president and CEO, said in the release. “The combined company provides for an enhanced customer experience through an expanded branch and ATM network, more diverse products and services and strengthened ties to our communities.”
The deal is expected to be 40% accretive to Kearny’s fiscal 2019 earnings per share. It should take 2.4 years to earn back the expected 2.3% dilution to Kearny’s tangible book value.
Kearny plans to cut $8.2 million in annual noninterest expenses. It expects to incur $26 million in pretax merger-related expenses.
Paul Aguggia, Clifton’s president and CEO, and two other Clifton directors are expected to join Kearny’s board.
Keefe, Bruyette & Woods and Luse Gorman advised Kearny. Sandler O’Neill and Kilpatrick Townsend & Stockton advised Clifton, while RP Financial provided a fairness opinion.