Valley National Bank to acquire Chicago-area lender for $247M

Acquiring Providence Bank & Trust would give the $66 billion-asset regional bank a branch footprint in a market where it operates one commercial office.

Dive Brief:

• Morristown, New Jersey-based Valley National Bancorp has agreed to acquire South Holland, Illinois-based Providence Financial Corp., the parent company of Providence Bank & Trust, in a cash-and-stock deal valued at $247 million,<a href="https://www.globenewswire.com/news-release/2026/08/25/3350439/0/en/valley-national-bancorp-accelerates-growth-in-attractive-chicago-market-with-acquisition-of-high-performing-providence-financial-corporation.html” rel=”nofollow noopener” target=”_blank”>the companies said Tuesday. 
• Providence, which has $1.6 billion in assets, $1.3 billion in deposits, $1.1 billion in loans and $800 million in wealth assets under management, has 14 branches across Chicago and its suburbs, including a few locations in northwest Indiana.
• The transaction is expected to close in early 2027, the banks said.

Dive Insight:

Valley, which has about 220 branches across New Jersey, New York, Florida, Alabama and California, entered the Chicago market in 2022 through itsacquisition of Bank Leumi USA. The Providence deal would give $66 billion-asset Valley a branch footprint in the market where the regional has only had a single commercial office thus far.

Valley said the Providence acquisition is a continuation of its recent investments to fuel retail and small-business growth. Providence, founded in 2004, has an 81% loan-to-deposit ratio and a 1.49% cost of deposits, as of the second quarter, according to aninvestor presentation.  

“The acquisition of Providence is in direct alignment with our strategic priorities of enhancing our core funding base, diversifying our loan portfolio and driving fee income,” Valley CEO Ira Robbins said in the release. “Providence’s conservative credit culture and high-touch, relationship-based approach align extremely well with Valley’s own value proposition.”

Steven Van Drunen, Providence’s president and CEO, will become Valley’s Chicagoland market president. At Valley, Van Drunen and the Providence team “will continue to drive growth in the Chicagoland market that they know so well,” Robbins said. 

Providence locations will become Valley Bank locations once the deal closes, Providence said ina notice on its website. Van Drunen said the merger allows the bank to offer its customers more products and services.

“The investments Valley has made in its people, infrastructure and culture position us to deliver meaningful benefits for our customers and communities,” Van Drunen said in the release. “Our customers will gain access to an expanded range of financial solutions while continuing to receive the responsive, relationship-driven service and local leadership they have grown accustomed to from Providence Bank & Trust.” 

Under the terms of the proposed deal, Providence shareholders would receive 4.3854 shares of Valley stock and $21.47 in cash for each Providence share they own, according to the news release. The deal’s value is based on Valley’s closing stock price of $14.10 from Monday. 

The transaction is priced at 1.45 times tangible book value and is expected to be about 2% accretive to Valley’s earnings, according to the presentation. Acquiring Providence is expected to be less than 1% dilutive to Valley’s tangible book value at close, with an earnback period of less than three years, the lender said.

“Strategically, the acquisition accelerates Valley’s expansion in Chicago and complements its existing middle-market commercial presence with Providence’s attractive retail/small-business franchise and low-cost core deposit base,” J.P. Morgan Securities analyst Anthony Elian wrote Tuesday. “We see this small deal as very tolerable without impacting Valley’s organic growth profile.”