Interchange Financial Services Corp. Acquires The Jersey Bank for Savings

Strategic Insights -

Interchange Financial Services Corp. (AMEX:ISB), the parent company of Interchange State Bank, has signed a definitive agreement to acquire The Jersey Bank for Savings (Jersey) in a merger of Jersey into Interchange State Bank. This acquisition is a strategic move to reinforce Interchange's position as the largest independent community bank in Bergen County, N.J. The merger is intended to be tax-free, and the exchange ratio is fixed at one share of Interchange stock for each outstanding share of Jersey stock. This transaction is valued at approximately $15 million, based on Interchange's closing stock price of $29.00 on January 27, 1998.

Key Takeaways:

  • Interchange Financial Services Corp. is acquiring The Jersey Bank for Savings in a merger, with each outstanding share of Jersey stock to be exchanged for one share of Interchange stock.
  • The exchange ratio is fixed, and the transaction is valued at approximately $15 million based on Interchange's closing stock price of $29.00 on January 27, 1998.
  • The merger is intended to be tax-free and will result in Interchange State Bank becoming the largest community bank in Bergen County, New Jersey.
  • The Jersey Bank for Savings has $6.4 million in equity, $70 million in deposits, and net income of approximately $425 thousand, excluding extraordinary items, for the year ended December 31, 1997.
  • The acquisition is conditioned upon the satisfaction of necessary bank regulatory approvals, the approval of the shareholders of Jersey, and other customary conditions.
  • The parties anticipate that the merger will be consummated late in the second or early in the third quarter of 1998.
  • Jersey granted Interchange an option to purchase 126,950 shares of Jersey's authorized but unissued common stock.
  • Anthony S. Abbate, president and chief executive officer of Interchange, stated that the acquisition fits Interchange's expansion plans and reinforces its position in Bergen County.
  • Richard A. Gilsenan, chairman of the board of Jersey, noted that Interchange makes an ideal partner for Jersey due to its presence in Bergen County and its community-based approach.

Statistics:

  • The transaction is valued at approximately $15 million.
  • The exchange ratio is fixed at one share of Interchange stock for each outstanding share of Jersey stock.
  • Jersey has $6.4 million in equity.
  • Jersey has $70 million in deposits.
  • Jersey had net income of approximately $425 thousand, excluding extraordinary items, for the year ended December 31, 1997.

Sources:

  • Business Wire, "Interchange Financial Services Corp. and The Jersey Bank for Savings Announce Merger Agreement" (January 28, 1998)