In a landmark deal for the Tri-state banking sector, Columbia Financial and Northfield Bancorp announced on Monday a definitive merger agreement. The transaction, valued at approximately $597 million, will create the third-largest regional bank headquartered in New Jersey.
The combined entity is projected to hold $18 billion in total assets, significantly expanding the reach of both institutions across New Jersey and New York.
The merger is uniquely tied to a major structural shift for Columbia. Alongside the acquisition, Columbia’s Board of Directors has adopted a plan for a “second-step” conversion.
Currently operating under a mutual holding company structure, Columbia will reorganize into a fully public stock holding company. This process involves:
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Public offering: Shares representing the majority ownership (currently held by Columbia Bank MHC) will be sold to the public at $10.00 per share.
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Subscription rights: Depositors of Columbia Bank with qualifying accounts as of late 2024 will receive priority rights to subscribe for the new stock.
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Exchange ratio: Existing public stockholders will have their shares exchanged for stock in the new holding company to maintain their ownership percentages.
The merger will take effect immediately following the completion of the stock conversion. Northfield shareholders will have the option to receive their consideration in either cash or stock, subject to an independent valuation of the new company.
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Cash Option: Capped at 30% of the total outstanding Northfield shares.
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Exchange Value: Depending on the final appraisal, shareholders could receive between 1.425 and 1.465 shares of the new holding company, or a cash equivalent of $14.25 to $14.65 per share.
Columbia anticipates the deal will be 50% accretive to its 2027 earnings per share.
Thomas Kemly will remain president and CEO of the new holding company. He will be joined by Northfield’s current CEO, Steven Klein, who will transition to the role of senior executive vice president and chief operating officer.
“Northfield has built an excellent deposit franchise with a conservative credit culture, which makes it an ideal fit with Columbia,” Kemly said. “The simultaneous merger allows us to immediately leverage a portion of the capital raised and materially augment financial results.”
Klein echoed the sentiment, noting his 40-year respect for the Columbia team: “Founded in 1887… Northfield Bank has been serving its communities for nearly 140 years. This combination will create enormous value and opportunity for our team members and customers.”
The Board of Directors for both companies have unanimously approved the plan. The deal is expected to close early in the third quarter of 2026, pending approval from both Columbia and Northfield stockholders, approval from Columbia Bank depositors and customary regulatory clearances.
