BCB Bancorp to acquire IA Bancorp, total assets $2 billion
Staff Writer |
BCB Bancorp has announced it has entered into a definitive merger agreement, with IA Bancorp, pursuant to which the Company will acquire IAB and its wholly owned subsidiary, Indus-American Bank.
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Upon consummation of the merger, Indus-American Bank will merge with BCB Community Bank and will operate as a division of BCB Community Bank.
Following the closing of the merger, BCB will form an advisory board which will consist of current members of the IAB board of directors and other prominent community members.
Indus-American Bank, which has its headquarters in Edison, New Jersey, operates full-service branches in Edison, Jersey City, Parsippany and Plainsboro, New Jersey, and Hicksville, New York.
Indus-American Bank was founded primarily to meet the banking needs of the South Asian-American community.
Indus-American Bank specializes in core business banking products for small- to medium-sized companies, with an emphasis on real estate-based lending.
The total transaction value is approximately $20 million, including the assumption by BCB of approximately $7.5 million of IAB preferred stock, outstanding shares of IAB common stock of approximately 4.18 million and based on a 10-day volume weighted average price of BCB common stock.
Under the terms of the Merger Agreement, which both boards of directors have approved, IAB shareholders shall be entitled to elect to receive either 0.189 shares of BCB common stock or $3.05 in cash for each share of IAB common stock, subject to an overall allocation of exchanged IAB shares into 80% BCB common stock and 20% cash.
The closing and the systems’ conversion is anticipated to occur in the fourth quarter of 2017, subject to approval by IAB shareholders, regulatory approvals and other customary closing conditions.
On a pro forma basis, the transaction is expected to be accretive to the Company’s 2018 earnings by approximately 10% per share, with tangible book value per share dilution of approximately 1.3% and an earn-back period of approximately 1.2 years.
The merger will add approximately $235 million to the Company’s asset base, based on IAB’s assets as of March 31, 2017.
Following completion of the merger, the Company will have total assets of over $2 billion, based on IAB’s and BCB’s respective assets as of March 31, 2017.
The merger is subject to customary closing conditions, including the receipt of regulatory approvals and IAB shareholder approval. The merger is expected to close in the fourth quarter of 2017. ■