Providence-based Citizens Financial Group Inc. has agreed to acquire New Jersey-based Investors Bancorp Inc. in a deal valued at $3.5 billion.
Citizens said in a statement this morning that it would acquire the parent company of Investors Bank for a combination of cash and stock. The deal is expected to close in the second quarter of 2022, and the boards of both companies have unanimously approved the deal.
“The acquisition of Investors enhances Citizens’ banking franchise, adding an attractive middle market/small business and consumer customer base while building its physical presence in the northeast with the addition of 154 branches located in the greater New York City and Philadelphia metropolitan areas and across New Jersey,” Citizens Bank said in the statement.
The Short Hills-based Investors, with about $25 billion in assets, has approximately 100 branches in New Jersey and 45 in New York. The $185-billion asset Citizens currently has 11 branches in parts of Southern New Jersey, including four ACME supermarket branches, and more than 100 branches throughout New York state.
Citizens is also in the process of acquiring 80 of HSBC’s East Coast branches, which include 75 branches in the New York and Mid-Atlantic area and five in Florida. That deal is expected to close in the first quarter of 2022. The two deals will add about one million customers, Citizens said, moving the bank to the top 10 for deposit share in the New York City Metropolitan area. The deal will also fill a branch gap between between Citizens’ New England and Mid-Atlantic markets, the bank said.
“The acquisition of Investors, following on the heels of the acquisition of HSBC’s East Coast branches, further strengthens our formidable franchise in the northeast, together adding roughly one million customers and boosting our near and long-term growth potential,” Bruce Van Saun, Citizens’ chairman and CEO, said in the statement. “We are confident in our ability to successfully integrate these acquisitions, and to over time deliver the same attractive offerings to customers and strong financial performance in the New York City metro region and New Jersey as we do in other major metro areas we serve.”
The 154 branches include eight locations in New Jersey and Pennsylvania that Boston-based Berkshire Bank is selling to Investors Bank. Berkshire Bank said last week that the sale was expected to close this quarter, and Investors said in a statement today announcing its second quarter earnings that the bank had received FDIC approval this month to purchase the Berkshire Bank locations.
The merger agreement calls for Investors’ shareholders to receive 0.297 shares of Citizens common stock and $1.46 in cash for each share of Investors they own. Once the merger is complete, former Investors shareholders will own approximately 14 percent of the combined company.
Members of Investors’ management team are expected to join Citizens, the bank said, adding that Kevin Cummings, Investors’ chairman and CEO, and Michele N. Siekerka, a member of Investors’ board of directors, are expected to join Citizens’ board of directors.
“Joining Citizens, with its broad capabilities, scale and commitment to excellence in customer service opens exciting opportunities for our combined company,” Cummings said in the statement. “Citizens shares Investors’ deep commitment to serving customers, supporting colleagues and giving back to local communities. Our local-market expertise and personal touch will align well with Citizens’ approach and together we will drive long-term value for all our stakeholders.”
This deal adds to the spate of merger activity this year involving some of the largest New England-based banks. Boston Private was recently acquired by the parent company of Silicon Valley Bank, and two in-market deals are underway in Greater Boston with Eastern Bank acquiring Century Bank and Rockland Trust acquiring East Boston Savings Bank. Connecticut’s two largest banks are also involved in deals, with People’s United Bank being acquired by Buffalo-based M&T Bank and Webster Bank doing a merger-of-equals with Sterling National Bank.
