Dive Brief:

• Citizens Financial plans to purchase Investors Bancorp for $3.5 billion in a cash-and-stock deal that will put Citizens’ assets above $200 billion, the two banks announced Wednesday.

• The deal, which is expected to close in the first or second quarter of next year, will save the combined entity $130 million annually, Citizens estimated. The bank said it anticipates about $400 million in pretax integration costs.

• The proposed acquisition comes two months after the $185 billion-asset Citizens announced it plans to purchase 80 of HSBC’s East Coast branches, in a withdrawal from the U.S. retail banking market by Europe’s largest lender. That deal is expected to close in the first quarter of 2022.

Dive Insight:

"The acquisition of Investors, following on the heels of the acquisition of HSBC’s East Coast branches, further strengthens our formidable franchise in the northeast, together adding roughly one million customers and boosting our near and long-term growth potential," Bruce Van Saun, chairman and CEO of Citizens, said in a statement. "We are confident in our ability to successfully integrate these acquisitions, and to over time deliver the same attractive offerings to customers and strong financial performance in the New York City metro region and New Jersey as we do in other major metro areas we serve."

The deal, which is subject to shareholder and regulatory approval, will boost Providence, Rhode Island-based Citizens’ physical presence in the Northeast with the addition of 154 branches, including 130 in the New York City metropolitan area and 16 in Greater Philadelphia.

The completion of the deals to acquire Short Hills, New Jersey-based Investors and the HSBC assets will add $30 billion in deposits to Citizens, propelling the bank to the top 10 in deposits among retail and commercial banks in the New York City market, Van Saun said on a call with analysts Wednesday.

Under the terms of the deal, Investors shareholders will receive 0.297 of a share of Citizens’ common stock and $1.46 in cash for each share of Investors they own. Former Investors shareholders will collectively own approximately 14% of the combined company after the deal is complete.

Investors Bancorp's chairman and CEO, Kevin Cummings, is expected to join Citizens’ board of directors after the acquisition. Michele Siekerka, a member of Investors’ board, is also expected to serve on Citizens' board.

"We anticipate that we can leverage what we offer and what we've done successfully in the Boston and Philadelphia markets, in terms of our consumer banking offerings," Van Saun told analysts. "We have a great digital-first customer experience that we've developed, we offer great advice to customers and we have a very full product set across all major lending categories. We'll be able to do more with both these customer bases over time and hopefully turn New York into something as successful as we have in Boston and Philadelphia."