Provident Financial, the parent organisation of Provident Bank, has reached an agreement to acquire SB One Bancorp, the parent company of SB One Bank, in a deal valued at approximately $208.9m.

The merged entity will have approximately $12bn in assets, $8.6bn in deposits, and $8.9bn in net loans.

It will be the third-largest bank headquartered in New Jersey, US.

The deal has been unanimously approved by the boards of directors of both the firms.

Under the deal terms, SB One Bancorp will merge into Provident Financial, and SB One Bank will merge into Provident Bank, with Provident and Provident Bank as surviving entities.

Provident chairman and CEO Christopher Martin said: “This business combination provides attractive financial attributes to shareholders of both Provident and SB One.

“At $12bn in assets, the combined company comfortably surpasses the $10bn asset threshold and provides Provident with a clear management succession plan.”

As per the terms of the agreement, Provident will trade its common shares for all outstanding shares of SB One, with an exchange ratio fixed at 1.357 provident shares for each share of SB One.

SB One president and CEO Anthony Labozzetta said: “The merger between our two companies creates the size and scale necessary to compete in the markets that we serve.”

SB One board chairman Edward Leppert said: “Provident and SB One are two healthy and vibrant financial institutions who will be even stronger as one.

“This merger makes strategic, cultural, and fiscal sense.”

Subject to receipt of regulatory approvals, the merger is expected to close in the third quarter of this year.