Provident Bancorp Inc., which has been building its market share in New York’s Orange County, has a deal that would vault it over FleetBoston Financial Corp., Bank of New York Co. Inc., and Charter One Financial Inc. into the top spot there.
On Tuesday, Provident said it would pay $153 million in stock and cash for the $760 million-asset Warwick Community Bancorp Inc. The deal would give the $1.3 billion-asset Montebello, N.Y., company a total of 16 branches and $678 million of deposits in Orange, which is located northwest of Manhattan near Westchester County.
Warwick shareholders would receive $32.26 for each of their shares, or 21.7 times Warwick’s expected 2004 earnings and 1.96 times its book value. The deal is expected to close in the fourth quarter.
Provident entered Orange County in April 2002, when it acquired the $105 million-asset National Bank of Florida for $28.1 million. In January, Provident completed a $77 million cash-and-stock deal for the $357 million-asset Ellenville National Bank.
Provident, which conducted an initial public offering and became a mutual holding company in 1999, completed its second-step conversion Jan. 14. The sale of 19.6 million shares netted $192.6 million. About $37 million went to Ellenville shareholders, but that left Provident with plenty of capital for additional deals.
George Strayton, its president and chief executive officer, did not rule out the possibility of another acquisition this year, but he said it more likely would take a breather and work on assimilating Ellenville and Warwick.
“We’ll have had two pretty big deals close this year,” he said during a press conference Tuesday afternoon. “I think our charge over the next year or so is to organically grow what we’ve put together here. I think we can create a really dynamic franchise.”
Provident said the Warwick acquisition would add 21% to its earnings next year. It projected 2005 earnings of 57 cents a share.
Warwick has two main banking subsidiaries: the 129-year-old Warwick Savings Bank, its flagship, and Towne Center Bank, which operates two branches in Bergen County, N.J. Both banks would be merged into Provident Bank.
Warwick shares rose about 0.4% from Monday’s close, to $33.69. Provident shares were down a penny, to $11.84.
Mr. Strayton said his company is drawn to Orange County’s demographics. The county’s population is growing about twice as quickly as the statewide average, and the median family income of $52,058 is also higher than the New York average.
After acquiring Warwick, Provident would control about 14.4% of the county’s $4.8 billion deposit market. It has a 13% share in the neighboring Rockland County.
