Provident in N.J. to surpass $10B in assets with SB One acquisition

Provident Financial Services in Iselin, N.J., has agreed to buy SB One Bancorp in Paramus, N.J.

The $9.8 billion-asset Provident said in a press release Thursday that it will pay $208.9 million in stock for the $2 billion-asset SB One. The deal, which is expected to close in the third quarter, priced SB One at 121% of its tangible book value.

Acquiring SB One would allow Provident to enter New Jersey’s Bergen County and Astoria, N.Y. SB One has 18 branches, $1.6 billion in loans and $1.5 billion in deposits.

“This business combination provides attractive financial attributes to shareholders of both Provident and SB One,” Christopher Martin, Provident’s chairman and CEO, said in the release. “The combined company comfortably surpasses the $10 billion-asset threshold and provides Provident a clear management succession plan.”

Tony Labozzetta, SB One’s president and CEO, will become Provident’s president and chief operating officer. Labozzetta and two other SB One directors will join Provident’s board.

The deal is expected to be 9% accretive to Provident’s earnings per share. It should take about two years for Provident to earn back an expected 2% dilution of its tangible book value.

Provident plans to cut about 30% of SB One’s annual noninterest expenses, or $13.5 million. The company expects to incur $18 million in merger-related expenses.

Piper Sandler and Luse Gorman advised Provident. Keefe, Bruyette & Woods and Hogan Lovells US advised SB One.