Somerset Savings Bank will soon convert from a mutual ownership to a stock-owned bank and then merge with Regal Bancorp, the holding company for Regal Bank.
The Bound Brook, New Jersey-based Somerset Savings, which has $649 million of assets, has formed SR Bancorp to prepare for its conversion. Once that step is complete, it will merge with Regal, which has $545 million of assets and is based in Livingston, New Jersey.
Somerset Savings will pay $58.4 million in cash and stock for Regal, and the deal is expected to close in the second quarter, Somerset said in a press release Monday. The new institution will become a New Jersey-chartered commercial bank called Somerset Regal Bank.
Somerset Savings would be the latest in a series of
"The additional capital we raise in the offering will help support future growth as we continue our development as a full-service community bank,” William Taylor, Somerset Savings’ chairman and CEO, said in the release.
Taylor will continue as chairman and CEO of Somerset Regal Bank and will become CEO and a director of SR Bancorp.
David Orbach, Regal’s executive chairman, and two other Regal directors will join SR Bancorp’s board. Orbach will be SR Bancorp’s executive chairman.
Christopher Pribula, the president, chief operating officer and a director of Somerset Savings, will hold those same positions with the new company.
The press release did not mention the future of Regal’s president and CEO Thomas Lupo. Neither bank responded to requests for comment by deadline.
Somerset Savings also announced that it will form a charitable foundation that will be funded with conversion stock and cash as part of the transaction.
Somerset Savings was advised by Keefe, Bruyette & Woods and Luse Gorman. Regal was advised by the Kafafian Group and Windels Marx Lane & Mittendorf.
