Somerset Savings Bank in Bound Brook, N.J., plans to convert to a stock-owned company and acquire Regal Bancorp in Livingston, N.J.
The $649 million-asset Somerset said in a press release Monday that it has formed SR Bancorp to prepare from its conversion from a mutual bank. Somerset also plans to convert to a New Jersey chartered commercial bank.
The mutual said it agreed to pay $58.4 million in cash and stock for Regal, the parent of the $545 million-asset Regal Bank. The conversion and the acquisition are expected to close in the second quarter.
“The simultaneous conversion and merger … and our conversion to a commercial bank charter, marks a pivotal point in the history of Somerset Savings,” William Taylor, the mutual’s chairman and CEO, said in the release.
The transaction “provides our depositors the ability to benefit as shareholders in the combined organization and allows our customers to benefit from the commercial lending expertise the Regal team brings to the combined company,” Taylor added. “The additional capital we raise in the offering will help support future growth.”
David Orbach, Regal’s executive chairman, and two other Regal directors will join SR Bancorp’s board. Orbach will serve as SR Bancorp’s executive chairman.
Somerset Savings was advised by Keefe, Bruyette & Woods and Luse Gorman. Regal was advised by The Kafafian Group and Windels Marx Lane & Mittendorf.