Investors Bancorp, Inc. and Gold Coast Bancorp, Inc. sign a merger agreement under which Investors will acquire Gold Coast. Consideration will be paid to Gold Coast stockholders in a combination of stock and cash valued at $63.6 million, inclusive of outstanding dilutive securities and based on Investors’ closing price of $11.20 on July 23, 2019.
Upon completion of the transaction, Investors will add six branches in Nassau and Suffolk counties in suburban Long Island and a branch in Brooklyn, NY. Founded in 2008, Gold Coast had assets of $563 million, loans of $463 million and deposits of $486 million at March 31, 2019. Under Investors’ ownership, Gold Coast customers will have access to an expanded product and services offering, with the strength and enhanced lending capabilities afforded by Investors’ larger balance sheet.
“We are pleased to partner with Gold Coast, a commercial bank with deep ties to the Long Island community and a strong track record of growth,” said Investors’ Chairman and Chief Executive Officer, Kevin Cummings. “This transaction strengthens Investors’ current suburban Long Island franchise and deepens our presence in this large, affluent market.”
“I am excited by the prospects of uniting our company with Investors,” said John Tsunis, Gold Coast’s Chairman and Chief Executive Officer. “This transaction will provide our customers with an enhanced value proposition through an expanded product and services offering. Additionally, Investors’ community banking approach and customer focus is highly consistent with the model that has made us successful since our inception.”
Under the terms of the agreement, 50% of Gold Coast common shares will be converted into Investors common stock while the remaining 50% will be exchanged for cash. Gold Coast shareholders will have the option to elect to receive either 1.422 shares of Investors common stock, or $15.75 in cash for each common share of Gold Coast they own, subject to proration to ensure that in the aggregate, 50% of transaction consideration will be paid in the form of Investors common stock. Post transaction closing, Investors intends to repurchase an equal amount of its shares as is issued in the transaction.
Investors expects the transaction to be approximately 2.5% accretive to earnings per share, inclusive of fully phased-in cost savings. The transaction will result in less than 1% dilution to tangible book value per share, with a tangible book value earn-back of approximately 3 years based on the “crossover” method and approximately 4 years based on the “static” method. “This transaction represents an effective use of capital and roughly doubles our presence in suburban Long Island,” said Cummings.
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