New Jersey-based Kearny Bank is set to acquire local rival Millington Bank in a deal valued at $94m.

A definitive agreement has already been executed between Kearny Financial (KRNY) and MSB Financial, the holding companies of the two lenders.

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Under the arrangement, Millington stockholders can trade each outstanding Millington common stock share for 1.3 shares of KRNY common stock or $18 in cash, or a combination.

Once complete, Kearny shareholders will own around 94% of the combined company, while the remaining 6% will be with Millington shareholders.

The Millington Bank acquisition will strengthen Kearny’s branch footprint in New Jersey. It will also add around $591m of assets to its books.

Once complete, the combined company will have around $7.25bn of assets with 52 full service branches.

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Kearny president and CEO Craig Montanaro said: “We are two strong community banks with well over two combined centuries of rich history serving our clients and the surrounding communities.

“We welcome the Millington employees and clients and feel that our expanded product suite and focus on digital technologies will offer an opportunity to further grow the combined franchise which makes this a winning combination for all concerned.”

Millington Bank president and CEO Michael Shriner said: “This merger will expand the banking opportunities and services available to our employees, customers and the communities that we serve.”

The Millington Bank acquisition is expected to close in the second quarter of 2020. The completion is subject to shareholders approval and regulatory green lights.