ConnectOne Bancorp, the parent company of ConnectOne Bank, has agreed to acquire Bancorp of New Jersey, the company that owns Bank of New Jersey, for about $113m (£93m).
The deal is expected to strengthen ConnectOne’s scale and competitive position in the New York metro market and as one of the largest independent banks in New Jersey.
The acquisition could accelerate ConnectOne’s focus on increasing client relationships, capitalising on growth opportunities for the company across New York and New Jersey metropolitan markets.
The company claims to have familiarity with Bank of New Jersey’s clients. When the deal is closed, ConnectOne will be able to provide expanded technology offerings and broader product suite such as commercial and industrial (C&I), consumer and SBA lending capabilities to Bancorp of New Jersey’s clients.
Bancorp of New Jersey to could bring nearly £659.7m in deposits and loans to ConnectOne
ConnectOne claims that Bancorp of New Jersey can bring nearly $800m (£659.7m) of deposits and loans. Acquiring a complementary banking organisation that uses the same core systems, coupled with direct geographic overlap is expected to create economies of scale with significant synergies and identified cost-savings.
ConnectOne’s chairman and CEO Frank Sorrentino said: “This is a financially savvy, in-market acquisition with strong economics to enhance our powerful franchise.
“The accretive transaction demonstrates our commitment to deliver attractive long-term returns for our shareholders and strongly supports our defined growth strategy which includes opportunistic growth through M&A.
“Bancorp of New Jersey is a natural fit for ConnectOne given its commercial business focus, overlapping geographic footprint, shared client base and the considerable synergies that are expected.
“We look forward to continuing to deliver extraordinary client service to all Bancorp of New Jersey and ConnectOne clients, and enhancing value to our shareholders.”
As per the terms of agreement, Bancorp of New Jersey shareholders will either receive up to 0.78 shares of ConnectOne common stock or $16.25 (£13.4) in cash.
The shareholders will have a right to elect all stock consideration or all cash consideration or a combination of both, of up to a mix of stock and cash in 80%/20%.
The value has been determined by $15.48 (£12.77) per Bancorp of New Jersey share, based upon the closing common stock price of $19.60 for ConnectOne Bancorp as of 15 August 2019.
Approved unanimously by the boards of directors of both companies, the acquisition is expected to be completed in the first quarter of next year, subject to shareholder approval and regulatory approvals.
Bancorp of New Jersey president and CEO Nancy Graves said: “This is an exciting opportunity to join a like-minded, high-performing commercial bank with considerable franchise value and growth potential.
“ConnectOne shares our relationship-centric business culture, and together we will provide our clients with growth opportunities by increasing the breadth of products and services, higher lending limits and leading edge technology.
“We are proud of what we have accomplished for our shareholders, customers and communities and can best leverage what we have built through partnering with ConnectOne. We are pleased to continue to work on behalf of our valued customers and communities with Frank and his team.”
