Columbia Financial to Acquire Northfield Bancorp in $597 Million Deal, Sets 2026 Timeline for Full Public Conversion

In a strategic push to consolidate its footprint in the competitive Northeast banking landscape, Columbia Financial, Inc. has agreed to acquire Northfield Bancorp, Inc. in a merger valued at roughly $597 million. The transaction, announced jointly by the companies, is structured to proceed concurrently with Columbia's long-anticipated conversion from a mutual holding company to a fully public stock entity.

Under the terms of the agreement, Northfield Bank will merge into Columbia Bank, with the latter as the surviving institution. The combined company is projected to hold about $18 billion in total assets, positioning it as the third-largest bank headquartered in New Jersey. It will operate a network of over 100 branches across 14 New Jersey counties, Brooklyn, and Staten Island.

"This isn't just about getting bigger; it's about building a better, more resilient institution for our customers and shareholders," said Thomas Kemly, President and CEO of Columbia Bank, who will lead the combined organization. "The merger, paired with our conversion, allows us to accelerate our growth trajectory, improve our balance sheet mix, and compete more effectively."

The merger consideration is pegged at 0.86 times Northfield's tangible book value. Shareholders of Northfield can elect to receive stock or cash, with cash consideration capped at 30% of outstanding shares. Based on a preliminary appraisal, the per-share value is estimated between $14.25 and $14.65. The final exchange ratio for Columbia's minority shareholders is expected to range from 1.8729 to 2.5340 shares in the new public company for each existing share.

Executives framed the dual initiatives as a formula for enhanced profitability. The "second-step" conversion is intended to eliminate a perceived market discount on Columbia's stock due to its mutual holding structure. Proceeds from the conversion offering are earmarked to bolster capital, with management forecasting approximately 50% earnings accretion by 2027, despite an initial 4.4% dilution to tangible book value, which they expect to earn back within 1.8 years.

A key strategic driver is market diversification. The acquisition brings Columbia a significant deposit base in New Jersey and establishes its first physical presence in the densely populated New York City boroughs of Brooklyn and Staten Island. Kemly noted the deal also reduces the bank's reliance on long-term, fixed-rate mortgages, providing greater balance sheet flexibility.

Dennis Gibney, Columbia's Senior EVP and Chief Banking Officer, addressed due diligence findings, highlighting a conservative $81 million credit mark on Northfield's loan portfolio. He specifically detailed Northfield's $419 million portfolio of New York rent-regulated multifamily loans, characterizing it as well-underwritten with strong historical performance metrics.

Following closing, the board of directors will comprise 13 members, with nine from Columbia and four from Northfield. Integration is the immediate priority, with Gibney stating that bank M&A would be "de-emphasized for the next 18 months" as the combined entity focuses on optimizing performance.

Market Voices: Analysts and Observers Weigh In

Michael R. Chen, Banking Analyst at Horizon Advisors: "The strategic logic is sound. Combining forces creates a more formidable mid-tier player with a dense, attractive geographic footprint. The concurrent conversion simplifies the capital structure and should improve liquidity for the stock. The projected financial metrics for 2027, if achieved, would place it among the stronger performers in the regional bank cohort."

David P. Miller, Portfolio Manager at Steadfast Capital: "The due diligence appears thorough, and the credit marks seem prudent, especially on the rent-regulated portfolio. The 1.8-year TBV earnback is reasonable for a deal of this size. My focus will be on execution risk—merging cultures and systems while navigating the conversion process is a complex undertaking."

Janice L. Harper, Founder of Community Bank Watchdog Blog: "Here we go again. Another 'community' bank getting swallowed up, promising 'synergies' that usually translate to branch closures and job losses for local communities. They tout being the #1 community bank deposit holder in Brooklyn, but will they still act like one after this? This is financial engineering dressed up as growth, and customers will be the last to see any benefit."

Robert G. Lin, Former Regulator & Independent Consultant: "The regulatory hurdles for this dual-process transaction are significant but manageable. The Fed will scrutinize the conversion appraisal closely. The companies' emphasis on conservative credit cultures and low CRE concentration is a positive signal that should ease regulatory concerns. Successful completion would set a notable precedent for other mutual holding companies considering similar paths."

The transaction is subject to regulatory approvals, approval by shareholders of both companies, and the completion of Columbia's second-step conversion.