Provident Financial Services, Inc. (“Provident”) (NYSE: PFS), the
parent company of Provident Bank, and SB One Bancorp (“SB One”)
(NASDAQ: SBBX), the parent company of SB One Bank, today announced
that they have entered into a definitive merger agreement under
which Provident will acquire SB One.
The combined organization will have
approximately $12 billion in assets and will rank as the 3rd
largest bank headquartered in New Jersey. The merger brings
together two high-performing companies with complementary
geographies and business lines.
Provident will acquire all of the outstanding
shares of SB One in exchange for common shares of Provident. The
exchange ratio will be fixed at 1.357 Provident shares for each
share of SB One, resulting in an aggregate transaction value of
approximately $208.9 million, based on Provident’s closing stock
price on March 11, 2020. The transaction consideration is presently
valued at $22.09 per share for SB One shareholders.
Christopher Martin, Chairman and CEO of
Provident said, “We are excited about our partnership with SB One.
This business combination provides attractive financial attributes
to shareholders of both Provident and SB One. At $12 billion in
assets, the combined company comfortably surpasses the $10 billion
asset threshold and provides Provident a clear management
succession plan with the addition of a very skilled leader and
banker in Tony Labozzetta, who will serve as President and Chief
Operating Officer of the combined company.”
Edward J. Leppert, Chairman of the Board of SB
One stated, “Provident and SB One are two healthy and vibrant
financial institutions who will be even stronger as one. This
merger makes strategic, cultural, and fiscal sense. We could not be
happier about becoming part of the Provident family and look
forward to the many benefits this union will have for our
customers, employees, and shareholders.”
Anthony “Tony” Labozzetta, President and CEO of
SB One said, “The merger between our two companies creates the size
and scale necessary to compete in the markets that we serve. I am
excited to help lead the franchise into the future with talented
bankers from both of our organizations.”
The merger agreement has been unanimously
approved by the boards of directors of both companies. The merger
is expected to close in the third quarter of 2020, subject to
satisfaction of customary closing conditions, including receipt of
required regulatory approvals and approval by the shareholders of
SB One. In the transaction, SB One will merge into Provident, and
SB One Bank will merge into Provident Bank, with Provident and
Provident Bank being the surviving entities.
Key Transaction Highlights:
- Allows Provident to cross the $10 billion asset threshold in a
meaningful way
- Establishes a clear succession plan for management to be
realized with a proven leader in Tony Labozzetta, who has both
community bank and large regional bank experience. Mr. Labozzetta
and two additional SB One directors will join the Boards of
Directors of Provident and Provident Bank
- Provides Provident with entry into attractive new markets in
Bergen County, New Jersey as well as Astoria, New York. Provident
intends to optimize the branch locations as part of the business
combination
- Enhances fee-based business and fee generation provided by SB
One Insurance Agency
- Strong cultural fit that combines two organizations with
like-minded commitments to customers, communities and
stockholders
Key Financial Highlights:
- Strong earnings accretion: Approximately 9% accretive to
Provident’s earnings per share
- Achievable cost savings assumption of 30.0% or approximately
$13.5 million in 2021 (first full year of pro forma
operations)
- Reasonable tangible book value dilution: Approximately 2.0%
dilutive to tangible book value per share at closing
- Tangible book value earnback period projected to be
approximately 2.25 years using the crossover method and 2.0 years
using the simple method
- Pro forma combined company with total assets of $11.8 billion,
deposits of $8.6 billion, and net loans of $8.9 billion
Piper Sandler & Co. served as financial
advisor and Luse Gorman, PC provided legal counsel to
Provident.
Keefe, Bruyette & Woods, A Stifel Company, served as
financial advisor and Hogan Lovells US LLP served as legal counsel
to SB One.
Conference Call, Webcast and Investor Presentation
Provident will host a conference call and audio webcast at 11:00
a.m. ET on March 12, 2020 to review the proposed transaction.
Chairman, President and Chief Executive Officer Christopher Martin
and Chief Financial Officer Thomas Lyons will host the call. The
conference call dial-in number is 1-888-336-7149. Participants
should ask to be joined into the Provident Financial Services, Inc.
(PFS) call. Please dial in at least five minutes before the start
of the call to register. An audio webcast of the conference call
will be available to the public, on a listen-only basis, via the
“Investor Relations” link on Provident’s website
https://www.provident.bank.
A replay of the conference call will be available beginning at
approximately 1:00 p.m. ET on March 12, 2020 and ending on March
26, 2020 by dialing 1-877-344-7529, access code 10140310. An online
archive of the webcast will be available following the completion
of the conference call at https://www.provident.bank.
An investor presentation discussing the proposed transaction
will be available for download by approximately 9:30 a.m. ET on
Thursday, March 12, 2020 at the “Investor Relations” link on
Provident's website https://www.provident.bank.
About Provident
Provident Financial Services, Inc. (NYSE: PFS),
is the holding company for Provident Bank, a community-oriented
bank offering “commitment you can count on” since 1839. Provident
Bank provides a comprehensive array of financial products and
services through its network of branches throughout northern and
central New Jersey, as well as Bucks, Lehigh and Northampton
counties in Pennsylvania. The Bank also provides fiduciary and
wealth management services through its wholly owned subsidiary,
Beacon Trust Company. The Provident Bank Foundation has supported
all of its markets and communities with assistance with housing,
education, health and home care for over 15 years. For more
information about Provident, please visit www.provident.bank.
About SB One
SB One Bancorp (NASDAQ: SBBX), is the holding
company for SB One Bank, a full-service, commercial bank that
operates regionally with 18 branch locations in New Jersey and New
York. Established in 1975, SB One Bank’s strength is in its ability
to build strong personal relationships with its customers and to
serve the communities in which it operates. In addition to its
branches and loan production offices, SB One Bank offers a
full-service insurance agency, SB One Insurance Agency, Inc. and
wealth services through SB One Wealth. SB One Bank reinforces its
commitment to the communities in which it lives and serves through
the SB One Foundation, Inc. which supports various local charitable
organizations. For more information about SB One, please visit
www.sbone.bank.
Forward-Looking
Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. These forward-looking statements include, but are not limited
to, statements about (i) the benefits of a merger between SB One
and Provident (the “Merger”), including future financial and
operating results, cost savings, enhancements to revenue and
accretion to reported earnings that may be realized from the
Merger; (ii) Provident’s and SB One’s plans, objectives,
expectations and intentions and other statements contained in this
press release that are not historical facts; and (iii) other
statements identified by words such as “expects” “anticipates,”
“intends,” “plans,” “believes,” “seeks,” “estimates,” “targets,”
“projects,” or words of similar meaning generally intended to
identify forward-looking statements. These forward-looking
statements are based upon the current beliefs and expectations of
the respective managements of Provident and SB One and are
inherently subject to significant business, economic and
competitive uncertainties and contingencies, many of which are
beyond the control of Provident and SB One. In addition, these
forward-looking statements are subject to assumptions with respect
to future business strategies and decisions that are subject to
change. Actual results may differ materially from the anticipated
results discussed in these forward-looking statements because of
possible uncertainties.
The following factors, among others, could cause
actual results to differ materially from the anticipated results or
other expectations expressed in the forward-looking statements: (1)
the businesses of Provident and SB One may not be combined
successfully, or such combination may take longer, be more
difficult, time-consuming or costly to accomplish than expected;
(2) the expected growth opportunities or cost savings from the
Merger may not be fully realized or may take longer to realize than
expected; (3) deposit attrition, operating costs, customer losses
and business disruption following the Merger, including adverse
effects on relationships with employees and customers, may be
greater than expected; (4) the regulatory approvals required for
the Merger may not be obtained on the proposed terms or on the
anticipated schedule; (5) the shareholders of SB One may fail to
approve the Merger; (6) legislative or regulatory changes,
including changes in accounting standards, may adversely affect the
businesses in which Provident and SB One are engaged; (7) the
interest rate environment may further compress margins and
adversely affect net interest income; (8) results may be adversely
affected by continued diversification of assets and adverse changes
to credit quality; (9) competition from other financial services
companies in Provident’s and SB One’s markets could adversely
affect operations; and (10) an economic slowdown could adversely
affect credit quality and loan originations. Additional factors
that could cause actual results to differ materially from those
expressed in the forward-looking statements are discussed in
Provident’s and SB One’s reports (such as Annual Reports on Form
10-K, Quarterly Reports on Form 10-Q and Current Reports on Form
8-K) filed with the Securities and Exchange Commission (the “SEC”)
and available on the SEC’s Internet site (http://www.sec.gov).
Provident and SB One caution that the foregoing
list of factors is not exhaustive. All subsequent written and oral
forward-looking statements concerning the proposed transaction or
other matters attributable to Provident or SB One or any person
acting on their behalf are expressly qualified in their entirety by
the cautionary statements above. Provident and SB One do not
undertake any obligation to update any forward-looking statement to
reflect circumstances or events that occur after the date the
forward-looking statements are made.
Important Additional Information and Where to
Find It
This press release does not constitute an offer
to sell or the solicitation of an offer to buy any securities or a
solicitation of any vote or approval with respect to the Merger. No
offer of securities shall be made except by means of a prospectus
meeting the requirements of the Securities Act of 1933, as amended,
and no offer to sell or solicitation of an offer to buy shall be
made in any jurisdiction in which such offer, solicitation or sale
would be unlawful.
In connection with the Merger, Provident will
file with the SEC a registration statement on Form S-4
(the “Registration Statement”) that will include a proxy
statement of SB One and a prospectus of Provident
(the “Proxy Statement/Prospectus”), and each of Provident
and SB One may file with the SEC other relevant documents
concerning the Merger. The definitive Proxy Statement/Prospectus
will be mailed to shareholders of SB
One. Shareholders and investors are urged to
read the Registration Statement and the Proxy Statement/Prospectus
regarding the Merger carefully and in their entirety when they
become available and any other relevant documents filed with the
SEC by Provident and SB One, as well as any amendments or
supplements to those documents, because they will contain important
information about Provident, SB One and the Merger.
Free copies of the Proxy Statement/Prospectus,
as well as other filings containing information about Provident and
SB One, may be obtained at the SEC’s website, www.sec.gov, when
they are filed. You will also be able to obtain these documents,
when they are filed, free of charge, by directing a request to
Provident Financial Services, Inc., 100 Wood Avenue South, P.O. Box
1001, Iselin, New Jersey 08830, Attention: Corporate Secretary,
Telephone: (732) 590-9200 or to SB One Bancorp, 95 State Route 17,
Paramus, New Jersey 07652, Attention: Corporate Secretary,
Telephone: (844) 256-7328, or by accessing Provident’s website at
www.provident.bank under the tab “Investor Relations” and then
under the heading “SEC Filings” or by accessing SB One’s website at
www.sbone.bank under the tab “Investor Relations” and then under
the heading “SEC Filings”. The information on Provident’s and
SB One’s websites is not, and shall not be deemed to be, a part of
this press release or incorporated into other filings either
company makes with the SEC.
Participants in the Solicitation
Provident, SB One and their respective
directors, and certain of their executive officers and employees
may be deemed to be participants in the solicitation of proxies
from the shareholders of SB One in connection with the Merger.
Information about Provident’s directors and executive officers is
available in its proxy statement for its 2019 annual meeting of
stockholders, which was filed with the SEC on March 15, 2019, and
information about SB One’s directors and executive officers is
available in its proxy statement for its 2019 annual meeting of
shareholders, which was filed with the SEC on March 25, 2019.
Information regarding all of the persons who may, under the rules
of the SEC, be deemed participants in the proxy solicitation and a
description of their direct and indirect interests, by security
holdings or otherwise, will be contained in the Proxy
Statement/Prospectus regarding the Merger and other relevant
materials to be filed with the SEC when they become available. Free
copies of these documents may be obtained as described in the
preceding paragraph.
Provident Contact: Thomas LyonsSEVP & Chief Financial
Officer(732)
590-9348
SB One Contact: Adriano DuarteExecutive VP & Chief Financial
Officer(844) 844-8958
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