Columbia Financial to Acquire Northfield Bancorp for Approximately $597M

Columbia Financial (CLBK) and Northfield Bancorp (NFBK) entered into an agreement and plan of merger for Columbia to acquire Northfield in a transaction valued at approximately $597M. The combination of the two organizations will create the third largest regional bank headquartered in New Jersey, with pro forma total assets of $18B based on financial data as of December 31. In connection with the announcement of the merger, Columbia also announced that its Board of Directors, together with the Boards of Directors of Columbia Bank MHC and the Bank, have unanimously adopted a plan of conversion and reorganization, pursuant to which shares representing the majority ownership of the MHC will be sold to the public at a price of $10.00 per share and the Bank, which is currently in the mutual holding company structure, will reorganize into the fully public stock holding company form of organization in a transaction commonly referred to as a "second-step" conversion. As part of the second-step conversion, the Bank will become a wholly owned subsidiary of a new holding company formed in connection with the transaction. Under the plan of conversion and reorganization, shares of common stock of Columbia held by persons other than the MHC, which currently represent approximately 26.9% of Columbia's outstanding common shares, will be converted into shares of common stock of the newly formed Holding Company pursuant to an exchange ratio intended to preserve the percentage ownership interests of such persons. Shares of common stock of Columbia held by the MHC, which currently represent approximately 73.1% of Columbia's outstanding common shares, will be cancelled in connection with the transaction. In the conversion stock offering, depositors of Columbia Bank with qualifying deposits as of December 31, 2024 will have first priority non-transferable subscription rights to subscribe for shares of common stock of the Holding Company. The number of shares of common stock of the Holding Company to be issued in the proposed stock offering will be based on the aggregate pro forma market value of the common stock of the Holding Company, after giving effect to the proposed merger with Northfield, as determined by an independent appraisal. Under the terms of the merger agreement, Northfield will merge into the Holding Company immediately following the completion of the second-step conversion. At the effective time of the merger, each outstanding share of Northfield common stock will be converted into the right to receive either shares of Holding Company common stock or cash, without interest, at the election of the holder, as follows: if the final Independent Valuation is less than $2.3B, either 1.425 shares of Holding Company common stock or $14.25 in cash; if the Independent Valuation is equal to or greater than $2.3 billion and less than $2.6B, either 1.450 shares of Holding Company common stock or $14.50 in cash, or if the Independent Valuation is equal to or greater than $2.6B, 1.465 shares of Holding Company common stock or $14.65 in cash. Under the terms of the merger agreement, no more than 30% of the outstanding shares of Northfield common stock issued and outstanding as of the effective time of the merger may be converted into the cash consideration. The merger will only occur if the second-step conversion is completed. On a pro forma basis at the midpoint of the estimated valuation range for the second-step conversion based on a preliminary independent appraisal, Columbia anticipates that the merger with Northfield would be 50% accretive to Columbia's 2027 earnings per share. Following the completion of the merger, Thomas Kemly will continue to serve as President and CEO of the Holding Company and the Bank, Dennis Gibney will continue to serve as First Senior EVP and Chief Banking Officer of the Holding Company and Columbia Bank and Thomas Splaine, Jr. will continue to serve as EVP and CFO of the Holding Company and Columbia Bank. In addition, at the effective time of the merger, Steven Klein, Chairman, President and CEO of Northfield, will become Senior EVP and COO of the Holding Company and Columbia Bank. Following the completion of the merger, the Board of Directors of the Holding Company and Columbia Bank will consist of the directors of Columbia and Columbia Bank as of the effective time of the merger, as well as four members of Northfield's board of directors, including Steven Klein.The merger agreement has been unanimously approved by the Boards of Directors of both Columbia and Northfield. The completion of the merger is subject to the satisfaction of various closing conditions, including the completion of the second-step conversion, the receipt of all required regulatory approvals and the approval of the merger by the stockholders of both Columbia and Northfield. The completion of the second-step conversion is also subject to the satisfaction of various closing conditions, including the receipt of all required regulatory approvals, the approval of the conversion by the depositors and certain borrowers of Columbia Bank and the approval of the conversion by the stockholders of Columbia. The second-step conversion, the conversion offering and the merger are expected to be completed early in the third quarter of 2026.