Valley National Bancorp in New York has agreed to buy Providence Financial in South Holland, Ill.
The $66 billion-asset Valley said in a press release that it will pay $247 million in cash and stock for the $1.6 billion-asset Providence. The deal, which is expected to close in early 2027, priced Providence at 145% of its tangible book value.
Providence has 14 branches, $1.3 billion in deposits, and $1.1 billion in loans.
The deal is expected to be 2% accretive to Valley’s earnings. It should take less than three years to earn back less than 1% dilution to Valley’s tangible book value.
Valley plans to cut a quarter of Providence’s annual operating expenses, or $10 million. It expects to incur $17 million of pretax merger-related expenses.
The acquisition “is in direct alignment with our strategic priorities of enhancing our core funding base, diversifying our loan portfolio and driving fee income,” Ira Robbins, Valley’s chairman, president and CEO, said in the release.
“Providence has evolved into a high-performing, community-focused bank in one of the most dynamic markets in the country,” Robbins added. “Providence’s conservative credit culture and high-touch, relationship-based approach align extremely well with Valley’s own value proposition.”
Steven Van Drunen, president and CEO of Providence, will join Valley as a market president.
Valley committed $3 million over the next three years to support Chicago-based civic, nonprofit, and community organizations.
TD Securities and Wachtell, Lipton, Rosen & Katz advised Valley. Keefe, Bruyette & Woods and Dickinson Wright advised Providence.