Kearny Financial Corp. Announces Merger with Clifton Bancorp Inc.

On Nov 2, 2017

Fairfield-based Kearny Financial Corp., the holding company for Kearny Bank, and Clifton Bancorp Inc., the holding company for Clifton Savings Bank, enter into a definitive agreement in which Kearny will acquire CSBK in an all-stock transaction valued at an estimated $408 million.

With the addition of 12 branches throughout Bergen, Passaic, Hudson, and Essex Counties, the merger will enhance Kearny’s footprint across dynamic and desirable northern New Jersey markets.  As of September 30, 2017, CSBK had approximately $1.6 billion of assets, $1.1 billion of loans, and $915 million of deposits.  On a pro forma basis, as of September 30, 2017, the combined company is expected to have approximately $6.5 billion of assets, $4.4 billion of loans, and $3.9 billion of deposits.

“I am pleased to announce the strategic combination of these two strong New Jersey based community banks”, said Craig L Montanaro, president and chief executive officer of Kearny.   “We believe that this partnership is an excellent fit from both a cultural and operating model perspective.   Together, the combined company provides for an enhanced customer experience through an expanded branch and ATM network, more diverse products and services and strengthened ties to our communities through the financial support of the Kearny Bank Foundation.”

“Kearny is an excellent partner for CSBK,” said Paul M. Aguggia, President and Chief Executive Officer of CSBK. “We believe that this strategic combination creates a stronger organization that will benefit our customers and create opportunities for our employees.  We are proud of the value that we have delivered to our shareholders since our second-step conversion and are excited by the prospects for the combined company.”

On a pro forma basis, the transaction is expected to be accretive to Kearny’s fiscal 2019 earnings per share by approximately 40 percent.  Tangible book value dilution is expected to be approximately 2.3 percent, with an earn-back period of approximately 2.4 years.

Subject to approval by each company’s shareholders, as well as regulatory approvals and other customary closing conditions, the transaction is currently expected to close late in the first calendar quarter of 2018, or early in the second calendar quarter of 2018.  Effective at the closing of the transaction, Mr. Aguggia and two other members of the Board of Directors of CSBK will join the Board of Directors of both Kearny and Kearny Bank.

Keefe, Bruyette & Woods, Inc. served as financial advisor to Kearny, and Luse Gorman, PC served as its legal counsel. Sandler O’Neill + Partners, L.P. served as financial advisor to CSBK, RP Financial, LC. rendered a fairness opinion to CSBK in connection with the transaction, and Kilpatrick Townsend & Stockton LLP served as legal counsel to CSBK.

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