Columbia Financial, Inc. (NasdaqGS:CLBK) signed a definitive agreement to acquire Stewardship Financial Corporation (NasdaqCM:SSFN) for approximately $140 million on June 6, 2019. As part of the transaction, Stewardship shareholders will receive $15.75 in cash for each share of Stewardship common stock held. In addition, each share of unvested Stewardship restricted stock awards will fully vest and will be converted into the right to receive $15.75 as part of the transaction. Columbia has, and, on the closing date will have, sufficient cash reserves, or access to sufficient cash, with which to pay the merger consideration without the need for any additional capital. Following consummation of the merger, Stewardship Financial will merge with and into Columbia Financial and Atlantic Stewardship Bank will merge with and into Columbia Bank. The merger agreement provides certain termination rights for each of Columbia Financial and Stewardship, and further provides that if the merger agreement is terminated under certain circumstances, Stewardship will be obligated to pay Columbia Financial a termination fee equal to $5.4 million. Pursuant to the terms of the merger agreement, each of Columbia Financial and Columbia Bank will increase the size of its Board of Directors by one member and appoint Paul Van Ostenbridge, the current President and Chief Executive Officer of Stewardship, to serve on its Board of Directors.

The transaction is subject to the approval of Stewardship's shareholders, the receipt of all required regulatory approvals and other customary closing conditions. As on June 6, 2019, the merger agreement has been unanimously approved by the Boards of Directors of each of Stewardship and Columbia Financial. In addition, on June 6, 2019, simultaneous with the execution of the merger agreement, Columbia Financial and Stewardship entered into separate voting agreements with each of the Directors (in their capacity as shareholders) of Stewardship, in which each such shareholder agreed, among other things, to vote in favor of the merger the shares of Stewardship common stock over which he or she has the sole right to dispose and the sole right to vote. In addition, each such shareholder has agreed to vote against any proposal made in competition with the merger, as well as certain other restrictions with respect to the voting and transfer of such shareholder's shares of Stewardship common stock. As of October 3, 2019, the shareholders of Stewardship Financial has approved the transaction. As of October 21, 2019, the transaction has received the requisite regulatory approvals from the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency and the New Jersey Department of Banking and Insurance. The transaction is expected to close in the fourth quarter of 2019. As of October 21, 2019, the transaction is expected to close on November 1, 2019. On a pro forma basis, the transaction is expected to be accretive to Columbia's 2020 earnings per share by approximately 16.2% and 20.7% in 2021, excluding one-time costs. Columbia expects initial tangible book value dilution associated with the transaction to be earned back, based on the crossover method, in less than five years.

Christina M. Gattuso of Kilpatrick Townsend & Stockton LLP acted as the legal advisor and Boenning & Scattergood, Inc. acted as the financial advisor to Columbia Financial and Michael Horn of McCarter & English, L.L.P. acted as the legal advisor to Stewardship and Sandler O'Neill + Partners, L.P. provided the fairness opinion and acted as the financial advisor to the Board of Directors of Stewardship Financial in the transaction. Stewardship has agreed to pay Sandler O'Neill a transaction fee in an amount equal to 1.25% of the aggregate merger consideration, which fee at the time of announcement of the merger was approximately $1.7 million and is contingent upon the closing of the merger. Sandler O'Neill also received a fee in an amount equal to $0.2 million upon Sandler O'Neill rendering its fairness opinion, which opinion fee will be credited in full towards the transaction fee which will become payable to Sandler O'Neill upon closing of the merger. Georgeson LLC acted as the information agent to Stewardship and will receive a fee of $6,000 for its services.

Columbia Financial, Inc. (NasdaqGS:CLBK) completed the acquisition of Stewardship Financial Corporation (NasdaqCM:SSFN) on November 1, 2019.