Valley National Bancorp in New York is expanding to the north with an agreement to buy Westchester Bank Holding in White Plains, N.Y.
The $41 billion-asset Valley said in a press release Tuesday that it will pay $210 million in cash and stock for the $1.3 billion-asset parent of Westchester Bank. Another $10 million in cash will go to those who hold Westchester options.
The deal is expected to close in the fourth quarter.
Westchester has seven branches, $900 million of loans and $1.1 billion of deposits.
The deal is expected to be about 1% accretive to Valley’s earnings and neutral to its tangible book value ratio.
“Westchester has evolved into a high-performing and growth-oriented commercial bank in a desirable market,” Ira Robbins, Valley’s chairman, president and CEO, said in the release. “Westchester’s conservative credit culture and high-touch approach to commercial banking align extremely well with Valley’s own value proposition.”
John Tolomer, Westchester’s president and CEO, will join Valley as a market president after the deal closes.
Valley plans to cut about 30% of Westchester’s annual noninterest expenses. The company expects to incur $11 million in merger-related expenses.
“We expect others had an interest in the attractive [Westchester] franchise, and this supports our thinking that Valley is a preferred acquirer in the metro New York market,” Frank Schiraldi, an analyst at Piper Sandler, wrote in a note to clients.
“While we don’t believe this necessarily creates a trend, this is probably an incremental positive for potential targets in a similar size range and geography as it floats the potential of another acquirer, and one with a strong relative currency,” Schiraldi added.
Covington & Burling advised Valley. Raymond James and Goodwin Procter advised Westchester.