BCB Bancorp in Bayonne, N.J., has agreed to buy IA Bancorp in Edison, N.J.
The $1.8 billion-asset BCB said in a press release Wednesday that it will pay $20 million in cash and stock for the parent of the $235 million-asset Indus American Bank. The purchase price includes the assumption of $7.5 million in preferred stock.
The deal is expected to close in the fourth quarter.
Indus American, founded in 2006 by entrepreneur Anil Bansal, focuses on the South Asian-American business community in northern New Jersey and New York. It is one of three minority banks in New Jersey that focus on Asian and Asian-American customers.
Indus American has struggled in recent years, losing $338,000 last year and $2.2 million in 2015, according to call reports with the Federal Deposit Insurance Corp.
BCB said it expects the acquisition to be 10% accretive to its 2018 earnings per share. It should take about a year to earn back the deal’s expected 1.3% dilution to BCB’s tangible book value.
Indus American will operate as a separately branded division of BCB.
The transaction should offer Indus American customers larger lending capacity and a broader array of products, Bansal, the bank’s chairman, said in the release. “BCB is a true community bank, with a history of a very strong commitment to its customers and the communities it serves,” he said.
Indus would be BCB’s first bank acquisition since October 2011, when it bought the $121 million-asset Allegiance Community Bank in South Orange, N.J.