Banking on Gotham
Less than three months after announcing plans to expand into the New York City market, Provident Bank has agreed to acquire a Manhattan business bank as the vehicle for its entry and growth in Gotham.
The bank”™s parent company in Montebello, Provident New York Bancorp, announced the recent agreement to acquire Gotham Bank of New York in a cash transaction valued at $40.5 million. The deal, which has been approved by directors of both companies, is expected to close in the third quarter this year, pending approvals by bank regulators and Gotham Bank shareholders. With the acquisition, Gotham Bank will merge into Provident Bank.
“Gotham Bank is a great strategic fit for us and offers an attractive platform in the New York City market to grow our franchise,” Provident Bank President and CEO Jack Kopnisky said in a press release announcing the deal. “The acquisition of Gotham Bank continues the implementation of our strategic objective to expand our reach into the greater New York City marketplace.”
Chartered in 1980, Gotham Bank is a commercial bank with one branch in midtown Manhattan. The “conservatively managed” bank had $169 million of loans and $335 million of deposits at the close of the third quarter in 2011, Provident Bank officials told investors in a presentation on the day the deal was announced.
The acquisition launches Provident Bank”™s expansion strategy in New York, where it will focus on middle-market commercial clients. The deal gives Provident a core asset and deposit base, a long-term client base and an advantageous midtown location, bank executives said.
The merger also gives Provident a team of Gotham bankers with established client relationships who will be teamed with three to five New York City-based banking teams that Provident plans to hire.
Provident Bank in October announced the hiring of David S. Bagatelle to lead the move into New York City as executive vice president of Provident and president of its New York City market. Bagatelle is founding president and CEO of Herald National Bank and co-founder and executive vice president of Signature Bank, two startup New York middle-market banks.
Provident officials indicated the Rockland County-based bank will target more strategic acquisitions in pursuit of the company”™s goal to create “the premier relationship-based business bank in the New York metropolitan area.”
Founded in Spring Valley in 1888, Provident Bank has $3.1 billion in assets and approximately 550 employees. The largest independent full-service community bank in the lower Hudson Valley, it operates 38 branches, including three commercial banking centers in Westchester County and two commercial banking centers in Bergen County, N.J.
Gaining Gotham
Provident Bank agreed to these terms in its deal to acquire Gotham Bank of New York:
Merger price: 125 percent of Gotham”™s adjusted tangible net worth near closing. The tangible net worth was $31.5 million as of Sept. 30.
Premium paid on Gotham”™s core deposit: estimated at 3.3 percent.
100 percent cash purchase.
Termination fee payable by Gotham: $2 million.
Anticipated closing date: third quarter.