The Hopewell Valley Community Bank (HVCBank) announced Wednesday that it will merge with and into Northfield Bancorp, Inc. Consideration will be paid to Hopewell Valley stockholders in a combination of stock and cash valued at $54.9 million, based on Northfield's closing price of $14.87 on Tuesday.
Upon completion of the transaction, it is estimated that Northfield and Hopewell Valley will have combined assets of $3.6 billion, loans of $2.6 billion, and deposits of $2.4 billion.
With combined lending teams, business development officers and 19 branches in Hunterdon, Mercer, Middlesex, Somerset and Union counties in New Jersey and 21 branches in Staten Island and Brooklyn, New York, Northfield says the merger will leave it better positioned to serve the businesses and consumers in its marketplaces.
"Hopewell Valley is a strong, commercially-focused, community bank, and we are very pleased with the opportunities this acquisition presents," said Northfield's Chairman & CEO, John W. Alexander. "This merger will establish an important presence for Northfield in Western New Jersey, and it complements and adds strategically to our franchise. We expect this combination to add loan diversity to Northfield's operations, provide greater lending capacity in Hopewell Valley's marketplace, and increase deposit market share in the communities served by Hopewell Valley."
Patrick L. Ryan, Chairman of the Board of the HVCBank, said: "Our Board is excited to partner with a strong, well-managed company like Northfield. We considered a number of potential partners and our Board unanimously determined that Northfield provided the best value for our shareholders."
James Hyman, Hopewell Valley's President and CEO, said: "Northfield is a bank that shares our dedication to customer service. Additionally, through this partnership, we will be able to bring additional products and services, and lending capacity to our customers."
Ryan will be added to the boards of directors of Northfield and Northfield Bank. Hyman will remain with Northfield as Regional President for the Hopewell Valley franchise.
Based on the value of consideration paid, the transaction represents approximately 147 percent of Hopewell Valley's tangible book value and a 4.4 percent premium on Hopewell Valley's core deposits. The transaction is expected to reduce Northfield's tangible book value per share by approximately three percent, with expected earnings per share accretion of approximately 14 percent.
Under the terms of the agreement, 75 percent of Hopewell Valley's outstanding shares of common stock will be exchanged for Northfield's common stock at a fixed ratio of 0.9592 Northfield shares for each Hopewell Valley share, and the remaining 25 percent, will be exchanged for $14.50 in cash.
Hopewell Valley shareholders may elect to receive Northfield shares or cash or a combination of both, subject to proration to ensure that, in the aggregate, 75 percent of Hopewell Valley's shares of common stock (including converted preferred stock) will be converted into Northfield common stock.
The merger has been approved by the boards of directors of Northfield, Northfield Bank and Hopewell Valley. The completion of the transaction is subject to Hopewell Valley's stockholder approval and normal and customary regulatory approvals for both companies.