Columbia Financial Inc. CLBK announced that it has received all regulatory approvals from the Office of the Comptroller of the Currency to complete Freehold Bank’s merger into the company. The transaction and system integration are anticipated to be completed on Oct. 5, 2024, subject to customary closing requirements.

Despite the favorable strategic move, shares of CLBK declined 1.5% yesterday due to subdued broader market sentiments.

CLBK’s Freehold Acquisition Details

Columbia Financial announced the acquisition of Freehold Bancorp, MHC, Freehold Bancorp, Inc. and Freehold Bank in June 2021, which was completed in December 2021.

Freehold Bank, founded in 1853, is a community-oriented institution serving the financial requirements of depositors and the local community through its two offices in Freehold and New Jersey.

Upon the completion of the deal, Freehold Bank became a federal savings bank from a federal stock savings bank and currently operates as a wholly-owned subsidiary of Columbia Financial.

Rationale Behind Columbia Financial’s Merger Pursuit

Per the merger agreement, depositors of Freehold Bank will become depositors of Columbia Bank and will enjoy the same rights and privileges in the Freehold MHC, upon the completion of the merger of both entities.

This move is in line with CLBK’s efforts to address the financial needs of its customers and offer an enhanced service through streamlined functioning and operational integration.

CLBK’s Past Buyouts

Columbia Financial has been engaged in strategic acquisitions to expand its footprint and market share. In May 2022, the company acquired RSI and merged its depositors into Columbia Bank. In April 2020, CLBK purchased Roselle Entities while completing the acquisition of Stewardship Financial in November 2019.

Year to date, shares of Columbia Financial have lost 8.8% against the industry’s 5.9% growth.

Image Source: Zacks Investment Research

Currently, CLBK carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Similar Steps by Other Financial Services Firms

Earlier this month, State Street Corporation’s STT asset management unit, State Street Global Advisors, announced an investment in a leading Australian fintech platform, Raiz Invest Limited, which allows customers to grow their wealth by helping them save and invest.

As part of the equity investment agreement, State Street Global Advisors will acquire 5% of Raiz’s share capital through a placement.

Through this partnership, State Street Global Advisors’ trusted brand and deep knowledge of markets will come together with Raiz’s mobile-first platform, which will help retail investors in Australia with micro-investments primarily in exchange-traded funds and model portfolios.

U.S. Bancorp’s USB lead banking division, U.S. Bank, expanded its focus on the healthcare industry with the acquisition of Salucro Healthcare Solutions LLC. The buyout was completed on Aug. 21, 2024. The financial terms of the deal were kept under wraps.

Based in Tempe, AZ, Salucro is a provider of healthcare financial technology with a primary focus on patient payments and billing. Previously, Salucro had been a partner of Elavon, a subsidiary of U.S. Bank. In 2022, U.S. Bank made its initial investment in Salucro and its platform was sold through Elavon as MedEpay.

The acquisition of Salucro extends U.S. Bank's more than a century of service to healthcare-focused clientele. Following the acquisition, Salucro’s employees have now become part of U.S. Bank and will be integrated into Elavon, one of the largest global payments processing firms.