Columbia Financial in N.J. lines up next mutual merger

Columbia Financial in Fair Lawn, N.J., has agreed to buy RSI Bancorp in Rahway, N.J.

The $9.2 billion-asset Columbia said in a press release Wednesday that it plans to complete the purchase of the $620 million-asset RSI in the second quarter. 

Columbia will issue about 7.1 million shares of common stock, valued at $129 million, to its mutual holding company as part of the transaction. RSI Bank will establish and fund a charitable foundation with $5 million before the merger closes. 

Columbia said it offered full employment to all RSI employees. One RSI director will join Columbia’s board.

RSI has four branches, $363 million of loans and $510 million of deposits.

“Both institutions share the principles of caring for their employees, the communities they serve and providing high-quality products and services to their customers,” Thomas Kemly, Columbia’s president and CEO, said in the release.

“The transaction will strengthen our footprint in Middlesex and Union counties," Kemly added. "As two community-minded banks, we are proud to enhance our local impact and support new markets.”

Columbia said the deal should be 2.6% accretive to its 2023 net income, but 4.1% dilutive to its 2023 earnings per share because of the additional shares issued to its mutual holding company. 

The transaction is expected to be 5.6% accretive to fully converted tangible book value. 

Columbia was advised by Boenning & Scattergood and Kilpatrick Townsend & Stockton. RSI was advised by FinPro Capital Advisors and Luse Gorman. 

Columbia agreed in June to buy Freehold Bancorp in Freehold, N.J., in a deal that closed earlier this week. The acquisitions should push the company above $10 billion of assets.