Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - Investors Bancorp Inc | d457429d8k.htm |
| EX-99.1 - PRESS RELEASE DATED DECEMBER 19,2012 - Investors Bancorp Inc | d457429dex991.htm |
| EX-10.1 - DEFINITIVE AGREEMENT AND PLAN OF MERGER - Investors Bancorp Inc | d457429dex101.htm |
 Acquisition
of Roma Financial Corp. December 20, 2012
Investor Presentation
Exhibit 99.2 |
 Forward Looking
Statements Disclosure 2
This presentation may contain forward-looking statements regarding Investors Bancorp Inc.
These statements constitute forward-looking information within the definition of
the Private Securities Litigation Reform Act of 1995. Actual
results may differ materially from any forward-looking statements expressed in this presentation, since
forward-looking information involves significant known and unknown risks, uncertainties
and other factors. Factors that may cause actual results to differ materially from
those contemplated by such forward-looking statements include, among others, the
following: failure to satisfy the conditions to closing for the proposed merger in a
timely manner or at all; failure of the Roma Financial or Investors stockholders to approve the
proposed merger; failure to obtain the necessary governmental approvals for the proposed
merger or adverse regulatory conditions in connection with such approvals; disruption
to the parties’ businesses as a result of the announcement and pendency of
the transaction; difficulties related to the integration of the businesses following
the merger; competitive pressures among depository and other financial institutions;
changes in the interest rate environment; and changes in general economic conditions,
either nationally or regionally. For a discussion of additional factors that
might cause such differences, please refer to Investors Bancorp’s public filings with the
Securities and Exchange Commission. These are available online at http://www.sec.gov.
Investors Bancorp does not undertake to update any forward-looking statements made
in this presentation to reflect new information, future events or otherwise. Investors
will be filing a registration statement on Form S-4 containing a joint proxy statement/prospectus and
other documents regarding the proposed transaction with the SEC. Investors
and Roma Financial stockholders and investors are urged to read the joint proxy statement/prospectus
when it becomes available, because it will contain important information about Investors and
Roma Financial and the proposed transaction. |
 Forward Looking
Statements Disclosure (cont.) 3
When available, copies of the joint proxy statement/prospectus will be mailed to
stockholders. Copies of the joint proxy statement/prospectus also may be obtained
free of charge at the SEC’s web site at http://www.sec.gov, or by directing a
request to Investors Bancorp, Inc., Attention: Corporate Secretary, 101 JFK Parkway
Short Hills, New Jersey 07078, or on its website at www.investorsbancorp.com, or to Roma Financial
Corporation, Attention: Corporate Secretary, 2300 Route 33, Robbinsville, New Jersey 08691 or
on its website at www.romabank.com. Copies of other documents filed by Investors
or Roma Financial with the SEC may also be obtained free of charge at the SEC’s
website or by directing a request to Investors or Roma Financial at the address
provided above.
Investors Bancorp, Inc. and Roma Financial Corporation and certain of their directors and
executive officers may be deemed to be participants in the solicitation of proxies from
the stockholders of Investors and Roma Financial in connection with the proposed
merger. Information about the directors and executive officers of Investors is set forth
in the proxy statement, dated April 14, 2012, for Investors’ 2012 annual meeting of stockholders, as filed
with the SEC on Schedule 14A. Information about the directors and executive officers of
Roma Financial is set forth in the proxy statement, dated March 14, 2012, for Roma
Financial’s 2012 annual meeting of stockholders, as filed with the SEC on Schedule
14A. Additional information regarding the interests of such participants and other
persons who may be deemed participants in the transaction may be obtained by reading the joint
proxy statement/prospectus included in the Form S-4 when it becomes
available. This presentation does not constitute an offer to sell or the
solicitation of an offer to sell or the solicitation of an offer to buy any securities. |
 Acquisition
Rationale 4
Enhances New Jersey Footprint
–
Investors will have the largest deposit market share for New Jersey headquartered banks
–
Solidifies Investors as the 2 largest bank headquartered in New
Jersey –
Increases Central and Southern New Jersey presence and provides Investors with a strong
foothold in the greater Philadelphia market (top 5 deposit market share in Mercer
county) –
Expands branch footprint into geography where Investors already has substantial lending
relationships Significant Financial Opportunity
–
Potential to redeploy excess cash and securities into higher yielding assets
•
Roma’s loan to deposit ratio is 70%
–
Increases tangible common equity to assets by approximately 30 bps
Effective Use of MHC Structure to Complete Transaction Not Available to Fully Public
Companies –
Roma
minority
shareholders
to
receive
stock
consideration
of
$113
(1)
million
relative
to
Roma’s
$215
million
of
tangible equity
(1)
Price determined using the 10-day average stock price prior to signing definitive
agreement. Improves Investors’
positioning relative to an eventual 2nd step conversion
–
Transaction is expected to be accretive to 2nd step minority exchange ratio
–
Increases the size of eventual 2nd step conversion
nd |
 Transaction
Mechanics 5
Investors Bank
Roma Financial Corporation,
MHC
Investors Bancorp,
MHC
Roma Financial Corporation
(22,584,995 shares / 74.5% MHC)
(7,711,332 shares / 25.5% Minority)
(1)
Investors Bancorp, Inc.
(84,937,936 shares / 61.6% MHC)
(52,843,337 shares / 38.4% Minority)
Roma Bank/ RomAsia* Bank
100%
Ownership
100%
Ownership
ROMA
ISBC Pro Forma
*Roma Financial Corporation currently owns
91% of RomAsia Bank
(1)
Includes unallocated ESOP shares to be retired as satisfaction for repayment of outstanding
ESOP loan. |
 Summary of
Transaction Terms 6
Purchase Price
(1)
:
$452
million, based on total shares outstanding
–
$113
(2) (3)
million to be paid to minority shareholders
–
$339
(4)
million to be paid to Investors Bancorp, MHC
Consideration:
100% Stock
Fixed exchange ratio of 0.8653 (representing $15.00 per share)
Pricing
(1)
:
53%
(5)
of total tangible equity
66% premium to market
Due Diligence:
Completed comprehensive on and off-site due diligence
In-depth loan review conducted
Required Approvals:
Shareholder approval of both companies
Customary regulatory approval
Transaction mechanics substantially similar to prior MHC acquisition completed by
Investors in January 2012
Board Representation:
Three Roma Board members to join Investors’
Board and remaining Roma directors to join
Advisory Board
Break-up Fee:
Parties have agreed to a substantial fee under certain circumstances
Anticipated Closing:
Second Quarter 2013
Foundation:
Investors to contribute $1 million to Roma’s Community Foundation in connection with the
transaction and match 10% of any charitable contribution made by
the Roma Community
Foundation for a period of three years post-close
(1)
Price determined using the 10-day average stock price prior to signing definitive
agreement. (2)
Includes $3.7 million due to fair value of ROMA options converted in transaction utilizing
Black-Scholes option pricing model. (3)
Unallocated
ESOP
shares
retired
as
satisfaction
for
repayment
of
outstanding
ESOP
loan.
(4)
For MHC, assumes a value of $15.00 per share.
(5)
Based on consideration paid to Roma minority shareholders. |
 1)
March 2010: Sterling Banks, Inc.
–
$369MM in assets / $331MM of deposits
Overview of Roma Financial Corporation
Overview & History
Source: SNL Financial and Company data. Branch count and map do not include proposed
branches. 7
Prior Acquisitions
Financial Summary
Branch Locations
As of September 30, 2012
Total Assets (000s)
$1,835,093
Total Equity (000s)
$218,779
TCE / TA
11.7%
NPLs / Loans
4.62%
LTM Earnings (000s)
$4,399
Bank Subsidiary
Roma Bank/ RomaAsia Bank
Headquarters
Robbinsville, NJ
Exchange / Ticker
NASDAQ / ROMA
Number of Branches
26
Banking History
Roots back to 1920
MHC Conversion Date
July 11, 2006
Ownership
75% MHC / 25% Minority |
 ISBC
ROMA
Strengthens Franchise
Source: SNL Financial. Deposit data as of June 30, 2012 and asset data as of September 30,
2012. Map and branch totals do not include proposed branches.
Median household income statistics deposit-weighted by county
8
Community Banks HQ'd in New Jersey by New Jersey Deposits
Rank
Company
Total Deposits
($000s)
Total
Branches
1.
Pro Forma Company
8,906,921
106
1.
Valley National Bancorp
8,192,809
172
2.
Investors Bancorp Inc.
7,384,933
80
3.
Provident Financial Services Inc.
5,234,839
80
4.
Columbia Bank MHC
2,906,792
44
5.
Sun Bancorp Inc.
2,626,689
60
6.
Lakeland Bancorp Inc.
2,206,500
47
7.
Kearny Financial Corp. (MHC)
2,178,401
41
8.
Amboy BanCorp.
1,750,430
23
9.
OceanFirst Financial Corp.
1,725,098
24
10.
Roma Financial Corp.
1,521,988
26
Community Banks HQ'd in New Jersey by Assets
Rank
Company
Total Assets
($000s)
Total
Branches
1.
Valley National Bancorp
15,771,134
218
2.
Pro Forma Company
14,093,838
128
2.
Investors Bancorp Inc.
12,258,745
102
3.
Provident Financial Services, Inc.
7,264,980
80
4.
Sun Bancorp, Inc.
3,180,263
60
5.
Kearny Financial Corp. (MHC)
2,920,099
41
6.
Lakeland Bancorp, Inc.
2,859,647
47
7.
Oritani Financial Corp.
2,771,027
26
8.
Northfield Bancorp, Inc. (MHC)
2,491,111
28
9.
OceanFirst Financial Corp.
2,304,426
24
10.
Roma Financial Corp.
1,835,093
26 |
 Pro Forma Loan
Composition 9
Source: SNL Financial. Loan composition and yield data for the quarter ended 9/30/2012.
Note:
ISBC
data
presented
pro
forma
for
Marathon
transaction
and
does
not
contemplate
fair
value
accounting
marks.
Investors Bancorp, Inc.
Pro Forma Combined
MRQ Yield on Loans of 4.78%
Total Loans of $11.0 billion
Resulting Company will have a more diversified loan
portfolio
Commercial Real Estate portfolio increases 16% ($310
million)
Roma Financial Corporation
MRQ Yield on Loans of 4.81%
Total Loans of $10.0 billion
MRQ Yield on Loans of 4.49%
Total Loans of $1.0 billion
1-4 Family
49.3%
Multi
-Fam
25.0%
CRE
C&D
2.6%
Cons
C&I
19.1%
2.3%
1.6%
1-4 Family
41.9%
CRE
29.8%
C&D
2.2%
Cons
21.4%
C&I
4.6%
1-4 Family
48.6%
Multi-Fam
22.7%
CRE
20.1%
C&D
2.6%
Cons
4.1%
C&I
1.9% |
 Pro Forma
Deposit Composition 10
Source:
SNL
Financial.
Deposit
composition
and
cost
data
for
the
quarter
ended
9/30/2012.
Note:
ISBC
data
presented
pro
forma
for
Marathon
transaction
and
does
not
contemplate
fair
value
accounting
marks.
MRQ Cost on Deposits of 0.74%
Total Deposits of $8.7 billion
MRQ Cost of Deposits of 0.86%
Total Deposits of $1.5 billion
Pro Forma Combined
MRQ Cost of Deposits of 0.76%
Total Deposits of $10.2 billion
Resulting Company will have an additional $805 million
in non-time deposits with a cost of 0.21%
Reduces pro forma loan to deposit ratio to
approximately 108%
Investors Bancorp, Inc.
Roma Financial Corporation
Transaction
26.7%
MMDA &
Savings
36.9%
Time Deposits
36.4%
Transaction
19.6%
MMDA &
Savings
34.4%
46.1%
Time Deposits
Transaction
25.7%
MMDA &
Savings
36.6%
Time Deposits
37.8% |
 Pro Forma
Financial Impact 11
Attractive Financial Impact
–
Effective
use
of
MHC
structure,
Investors
paying
53%
(1)
of total tangible equity
–
IRR of 17%
(1)
–
Roma’s loan to deposit ratio of approximately 70% allows for the potential to deploy
excess cash and securities into higher yielding lending opportunities
–
Transaction is expected to be accretive to 2 step minority exchange
ratio Transaction
Improves
Investors’
Capital
Position
–
Accretive to capital
•
Increases
pro
forma
TCE
ratio
by
approximately
30
bps
Acquisition Assumptions
–
Conservative cost savings of approximately of 25% of Roma’s non-interest expense
base assumed •
No revenue synergies assumed but opportunities identified
–
Pre-tax restructuring charges of approximately $23 million
–
Investors conducted rigorous credit review, expects one-time gross credit mark of
approximately $40 million –
Deposit and borrowings fair value premium of approximately $16 million assumed
–
Core deposit intangibles of 1.0% of non-time deposits to be amortized over 10 years on a
straight line basis (1)
Based on consideration paid to Roma minority shareholders.
nd |
 Considerations
For Investors’ Shareholders
12
The mutual holding company structure permits Investors to purchase Roma at 53% of total
tangible equity (i.e. $113 million in consideration to Roma minority shareholders compared to
$215 million in total tangible equity)
Investors
is
required
to
issue
shares
to
Investors
Bancorp,
MHC,
representing
the
purchase
of
stock
held by Roma Financial Corporation, MHC
–
These
shares
would
be
reissued
in
a
future
2
nd
step
conversion
In
turn,
this
will
result
in
a
larger
2
nd
step
conversion
transaction
for
Investors
at
some
point
in
the
future
as
these
new
shares
issued
to
the
MHC
are
sold
in
a
2
nd
step
conversion
–
Expected
to
increase
size
of
potential
2
nd
step
conversion
by
approximately
$350
million
–
2.7% accretive to both fully converted tangible value per share and minority second step
exchange ratio
As
a
result,
for
accounting
purposes,
Investors
is
likely
to
record
approximately
$257
(1)
million
of
goodwill
Investors expects to incur EPS dilution of approximately 11% before giving effect to deploying
excess
liquidity
and
the
impact
of
any
2
nd
step
conversion
(1)
For MHC, assumes a value of $15.00 per share. |
 Investors
Bancorp’s Track Record as an Acquiror 13
October
2010
Deposit Franchise of
Millennium bcpbank
17 branches in NJ, NY & MA
$600 million in deposits
0.11% deposit premium
$200 million in performing
loans
October
2009
6 NJ Branches from Banco
Popular North America
6 branches
$227 million in deposits
1.0% deposit premium
No loans acquired in the
transaction
May
2009
American Bancorp of
New Jersey
5 full-service branches
$680 million in assets
$98 million transaction value
1.01x TBV / 1.2% deposit
premium
October 2012
Marathon Banking
Corporation
13 full-service branches in NJ
and NY
$902 million in assets
$135 million transaction value
1.51x TBV / 5.8% deposit
premium
June
2008
Summit Federal
Bankshares MHC
5 full-service branches
$110 million in assets
Merger was a combination of
mutual enterprises
January 2012
Brooklyn Federal
Bancorp, Inc.
5 full-service branches
$400 million in deposits
$10.3 total deal value / $2.9
million based on minority shares
Included commercial loan
sale/hedge as a part of the
transaction |