Banking / Financial

ConnectOne Bancorp Completes Acquisition of Bancorp of New Jersey

Englewood Cliffs-based ConnectOne Bancorp, Inc., parent company of ConnectOne Bank, completes its acquisition of Fort Lee-based Bancorp of New Jersey, Inc., parent of Bank of New Jersey.

“We are pleased to complete this compelling, financially savvy transaction, which enhances our powerful franchise and provides enhanced scale and additional growth opportunities within our own market,” commented Frank Sorrentino, ConnectOne’s chairman and chief executive officer. “We continue to accelerate ConnectOne’s strategic focus on increasing client relationships and look forward to offering our new clients access to technological financial solutions, an expanded product base, a broader network of locations across the New York Metro market and access to talented bankers. Given our deep history in Bergen County and surrounding areas, we expect the conversion of Bank of New Jersey to ConnectOne Bank to be a smooth one. The conversion is scheduled to take place in May 2020, at which point Bank of New Jersey clients will be transitioned to the ConnectOne platform.”

Key Transaction Highlights:

  • Strengthens ConnectOne’s scale and competitive position in the New York metro market and as one of New Jersey’s largest independent banks
  • Bancorp of New Jersey adds approximately $800 million of deposits and loans to ConnectOne
  • In-market acquisition of a complementary banking model utilizing the same core systems and with direct geographic overlap creating economies of scale with significant synergies and identified cost-savings
  • ConnectOne has a high level of familiarity with Bancorp of New Jersey’s franchise and client base
  • ConnectOne will provide expanded technology offerings and a broader product suite, including C&I, consumer, and SBA lending capabilities to Bancorp of New Jersey’s clients
  • The structure of the transaction enables ConnectOne to accretively deploy excess capital while preserving strong capital ratios and future capital flexibility
  • The acquisition is projected to create long-term value for shareholders and increase the scarcity value of ConnectOne’s franchise

Key Financial Impact Highlights:

  • EPS accretive: Approximately 5% accretive to ConnectOne’s earnings per share (on a fully phased in basis), excluding the impact of potential revenue enhancement opportunities
  • Reasonable tangible book value dilution: Approximately 3% dilutive to tangible book value per share at closing
  • Acceptable tangible book value earnback period: Earnback of tangible book value dilution projected to be approximately 3.5 years using the cross-over method and excluding any contemplated revenue enhancements
  • Pro forma combined company total assets of $7.0 billion, deposits of $5.4 billion, and loans of $5.9 billion (as of June 30, 2019)

ConnectOne’s board of directors expanded, as agreed to in the merger agreement, to 12 members to include former BKJ director Mark Sokolich. The new independent Director, Sokolich, is an attorney and managing partner of Mark Sokolich, Esq., a Fort Lee-based law firm.  He has represented various banking clients in commercial and residential real estate. Additionally, he’s the Mayor of the Borough of Fort Lee and is a former councilman.

Keefe, Bruyette & Woods, Inc., a Stifel Company, served as financial advisor to ConnectOne and Squire Patton Boggs (US) LLP served as its legal counsel. Sandler O’Neill & Partners, L.P. served as financial advisor to Bancorp of New Jersey and Holland & Knight LLP served as its legal counsel.

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