Brookline Bancorp, Inc. (NASDAQ: BRKL) (“Brookline”) and PCSB
Financial Corporation (NASDAQ: PCSB) (“PCSB”) announced today they
have entered into a definitive merger agreement whereby Brookline
will acquire PCSB and its wholly owned subsidiary, PCSB Bank for
approximately $313 million in cash and stock. Following the
transaction, PCSB Bank will operate as a separate bank subsidiary
of Brookline.
Paul Perrault, Chairman and Chief Executive
Officer of Brookline commented on the transaction, “I am pleased to
announce the combination of PCSB and Brookline. This transaction
represents a unique opportunity for Brookline to expand its banking
operations into one of the country’s largest deposit markets
through the acquisition of a complimentary commercial banking
organization.” Mr. Perrault continued, “PCSB has a high-quality
loan portfolio, deposit base and talented employees, making it an
excellent addition to our organization.”
“We are truly excited to be merging with
Brookline. Paul and his team have built an impressive regional
financial services company with a bedrock culture of performance,
service and support of their customers, employees and
shareholders,” said Joseph D. Roberto, Chairman, President and
Chief Executive Officer of PCSB. “Partnering with Brookline will
allow PCSB to deliver even more value to our communities and
customers as we continue to expand in the lower Hudson Valley.”
Under the terms of the merger agreement,
stockholders of PCSB will receive, for each share of PCSB, at the
holder’s election, either $22.00 in cash consideration or 1.3284
shares of Brookline common stock for each share of PCSB common
stock, subject to allocation procedures to ensure 60% of the
outstanding shares of PCSB common stock will be converted to
Brookline common stock. The receipt of Brookline common stock by
stockholders of PCSB is expected to be tax-free.
KEY FINANCIAL IMPACT HIGHLIGHTS
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The transaction is presently valued at approximately $313 million
in the aggregate, or approximately $20.72 per PCSB share, based on
Brookline’s common stock price of $14.96 at close on May 23rd,
2022.
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Anticipated double-digit EPS accretion of approximately 13% to
Brookline’s earnings per share (on a fully phased-in basis),
excluding the impact of expected revenue enhancement
opportunities.
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Expected IRR of approximately 15%, exceeding Brookline’s cost of
capital.
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Pro forma capital ratios of 8.6% TCE/TA and 13.0% Total Risk-Based
Capital Ratio, estimated at close.
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Combined company total assets of $10.6 billion, loans of $8.5
billion, and deposits of $8.7 billion (as of March 31, 2022).
The combined organization will further establish
Brookline as a premier commercial banking franchise in the
Northeast with over $10 billion in assets, and will represent one
of the few regional banks operating in the Boston, Providence and
New York metropolitan markets. Brookline and PCSB have
complementary business models focused on relationship-based CRE and
C&I lending, which include an extensive suite of financial
products and services.
Upon completion of the merger, PCSB Bank will
retain its New York bank charter and Board of Directors and its
headquarters will remain in Yorktown Heights. Brookline will select
one PCSB director to join its Board of Directors. In addition,
following the closing, Michael P. Goldrick, currently PCSB Bank’s
Executive Vice President and Chief Lending Officer, will become
PCSB Bank’s President and Chief Executive Officer.
The transaction has been unanimously approved by
the Board of Directors of both companies and is expected to be
completed in the second half of 2022, subject to approval by PCSB
stockholders, as well as regulatory approvals and other customary
closing conditions.
Brookline was advised in this transaction by
Performance Trust Capital Partners, LLC as financial advisor and
Goodwin Procter LLP as legal counsel. PCSB was advised by Piper
Sandler & Co. as financial advisor and Luse Gorman, PC as legal
counsel.
INVESTOR CONFERENCE CALL
INFORMATION
Brookline will conduct a conference call/webcast
to discuss the transaction at 10:30 a.m. Eastern Time on Tuesday,
May 24, 2022. A copy of the Investor Presentation is available on
Brookline’s website, www.brooklinebancorp.com. To listen to the
call and view the Company’s Investor Presentation, please join the
call via
https://event.choruscall.com/mediaframe/webcast.html?webcastid=71uBgb4X.
To listen to the call without access to the slides, interested
parties may dial 844-200-6205 (United States) or 929-526-1599
(internationally) and ask for the Brookline Bancorp, Inc.
conference call (Access Code 546153). A recorded playback of the
call will be available for one week following the call on the
Company’s website under “Investor Relations” or by dialing
866-813-9403 (United States) or 929-458-6194 (internationally) and
entering the passcode: 030217.
ABOUT BROOKLINE BANCORP, INC.
Brookline Bancorp, Inc., a bank holding company
with approximately $8.6 billion in assets and branch locations in
eastern Massachusetts and Rhode Island, is headquartered in Boston,
Massachusetts and operates as the holding company for Brookline
Bank and Bank Rhode Island. The Company provides commercial and
retail banking services and cash management and investment services
to customers throughout Central New England. More information about
Brookline Bancorp, Inc. and its banks can be found at the following
websites: www.brooklinebank.com, and www.bankri.com.
ABOUT PCSB FINANCIAL
CORPORATION
PCSB Financial Corporation is the bank holding
company for PCSB Bank. PCSB Bank is a New York-chartered commercial
bank that has served the banking needs of its customers in the
Lower Hudson Valley of New York State since 1871. It operates from
its executive offices and 14 branch offices located in Dutchess,
Putnam, Rockland and Westchester Counties in New York. For more
information, please visit www.pcsb.com.
NO OFFER OR SOLICITATION
This communication does not constitute an offer
to sell or the solicitation of an offer to buy any securities nor a
solicitation of any vote or approval with respect to the proposed
transaction or otherwise. No offering of securities shall be made
except by means of a prospectus meeting the requirements of the
U.S. Securities Act of 1933, as amended (the “Securities Act”), and
otherwise in accordance with applicable law.
IMPORTANT ADDITIONAL INFORMATION AND
WHERE TO FIND IT
In connection with the proposed transaction,
Brookline will file a registration statement on Form S-4 with the
SEC, which will contain the proxy statement of PCSB and the
prospectus of Brookline, as well as other relevant documents
concerning the proposed transaction. Stockholders of PCSB are
encouraged to read the registration statement, including the proxy
statement/prospectus that will be part of the registration
statement, and the other relevant materials filed with the SEC when
they become available, as well as any amendments or supplements to
those documents, because they will contain important information
about the proposed transaction, PCSB and Brookline. After the
registration statement is filed with the SEC, the proxy
statement/prospectus and other relevant documents will be mailed to
PCSB stockholders and will be available for free on the SEC’s
website (www.sec.gov). The proxy statement/prospectus will also be
made available for free by contacting Carl M. Carlson, Brookline’s
Co-President and Chief Financial Officer, at (617)-425-5331 or
Jeffrey M. Helf, Chief Financial Officer of PCSB, at (914)
248-7272. No offer of securities shall be made except by means of a
prospectus meeting the requirements of the Securities Act.
PARTICIPANTS IN SOLICITATION
PCSB and certain of its directors and executive officers may be
deemed to participate in the solicitation of proxies from the
stockholders of PCSB in connection with the proposed transaction.
Information about the directors and executive officers of PCSB and
their ownership of PCSB common stock is set forth in the proxy
statement for its 2021 annual meeting of stockholders, as filed
with the SEC on Schedule 14A on September 24, 2021. Additional
information regarding the interests of those participants and other
persons who may be deemed participants in the transaction may be
obtained by reading the proxy statement/prospectus regarding the
proposed transaction when it becomes available. Free copies of this
document when available may be obtained as described in the
preceding paragraph.
FORWARD-LOOKING STATEMENTS
Certain of the statements made in this investor
presentation may constitute forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
Section 27A of the Securities Act and Section 21E of the Securities
Exchange Act of 1934, as amended. The words “expect,” “anticipate,”
“intend,” “plan,” “believe,” “seek,” and “estimate,” and similar
expressions, are intended to identify such forward-looking
statements, but other statements not based on historical
information may also be considered forward-looking, including
statements about the benefits to Brookline Bancorp Inc.
(“Brookline”) or PCSB Financial Corporation (“PCSB”) of the
proposed merger, Brookline’s and PCSB’s future financial and
operating results and their respective plans, objectives, and
intentions. All forward-looking statements are subject to risks,
uncertainties, and other factors that may cause the actual results,
performance, or achievements of Brookline and PCSB to differ
materially from any results, performance, or achievements expressed
or implied by such forward-looking statements. Such risks,
uncertainties, and other factors include, among others, (1) the
risk that the cost savings and any revenue synergies from the
proposed merger may not be realized or take longer than anticipated
to be realized, (2) the risk that the cost savings and any revenue
synergies from recently completed mergers may not be realized or
may take longer than anticipated to realize, (3) disruption from
the proposed merger, or recently completed mergers, with customer,
supplier, or employee relationships, (4) the occurrence of any
event, change, or other circumstances that could give rise to the
termination of the merger agreement, (5) the failure to obtain
necessary shareholder or regulatory approvals for the merger, (6)
the possibility that the amount of the costs, fees, expenses, and
charges related to the merger may be greater than anticipated,
including as a result of unexpected or unknown factors, events, or
liabilities, (7) the failure of the conditions to the merger to be
satisfied, (8) the risk of successful integration of the two
companies’ businesses, including the risk that the integration of
PCSB’s operations with those of Brookline will be materially
delayed or will be more costly or difficult than expected, (9) the
risk of expansion into new geographic or product markets, (10)
reputational risk and the reaction of the parties’ customers to the
merger, (11) the risk of potential litigation or regulatory action
related to the merger, (12) the dilution caused by Brookline’s
issuance of additional shares of its common stock in the merger,
and (13) general competitive, economic, political, and market
conditions. Additional factors which could affect the
forward-looking statements can be found in Brookline’s annual
report on Form 10-K, quarterly reports on Form 10-Q, and current
reports on Form 8-K, or PCSB’s annual report on Form 10-K,
quarterly reports on Form 10-Q, and current reports on Form 8-K, in
each case filed with the SEC and available on the SEC’s website at
http://www.sec.gov. Brookline and PCSB disclaim any obligation to
update or revise any forward-looking statements contained in this
communication, which speak only as of the date hereof, whether as a
result of new information, future events, or otherwise.
BROOKLINE
INVESTOR CONTACT: |
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Contact: |
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Carl M. Carlson |
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Brookline Bancorp, Inc. |
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Co-President, Chief Financial
and Strategy Officer |
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(617) 425-5331 |
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ccarlson@brkl.com |
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PCSB
INVESTOR CONTACT: |
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Contact: |
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Joseph D. Roberto |
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PCSB Financial
Corporation |
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Chairman, President and Chief
Executive Officer |
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(914) 248-7272 |
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jroberto@mypcsb.com |
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