After Delay, Victory State, Northfield Banks Set For July 1 Merger

COVID-19 Put The Brakes On Mergers Like This One

Keith Griffin

June 25, 2020

Northfield Bancorp logo | Contributed image

The once-delayed merger between Staten Island-based Northfield Bank and New Jersey-based Victory State Bank is now moving forward rapidly. After approval by Victory State shareholders this week, the merger is expected to be completed by the close of business July 1.

The merger is expected to occur on or about the close of business on July 1, 2020, and based on such closing date, each share of Victory common stock will be exchanged for 2.0463 shares of Northfield common stock with fractional shares paid out in cash.

The COVID-19 pandemic had delayed the merger, which was originally announced in December 2019. Back then, bank officials said upon completion of the transaction, it is estimated that Northfield will have combined assets of $5.2 billion, loans of $3.5 billion, and deposits of $3.7 billion. No updated financial figures were given with this week’s announcement.

Back in December, the two banks said key transaction highlights include:

  • Strengthens competitive position in the Staten Island marketplace;
  • Lowers funding costs with approximately $325 million of deposits, including $145 million of non-interest bearing demand accounts,
  • Adds total loans of approximately $157 million, with an average yield of 5.77%;
  • Creates economies of scale with significant identified cost-savings, and low execution risk;
  • Provides expanded offerings, including a suite of commercial cash management services, business lending, home equity loans and lines, and lending capacity to Victory customers; and
  • Deploys excess capital, with a modest level of tangible book value dilution, meaningful earnings accretion and acceptable period of tangible book value earn-back.

Key financial highlights include:

  • 8.5% accretive to Northfield’s 2021 earnings per share;
  • Less than 2.5% dilutive to tangible book value per share at closing; and
  • Earn back of tangible book value dilution projected to be 3.75 years using the cross-over method.

Ralph M. Branca, Victory’s president and CEO, will join Northfield in a leadership role for the Staten Island marketplace and Joseph J. LiBassi, its board chair, has entered into a consulting agreement for a three-year-period to assist in the transition.

Northfield Bank, founded in 1887, currently operates 37 full-service banking offices in Staten Island and Brooklyn, New York, and Mercer, Middlesex, Hunterdon and Union counties, New Jersey. Victory State Bank began operations in 1997 and operates six full-service locations in Staten Island.

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