Valley National is buying a 14-branch Chicago bank for $247m, and the deck says the price sits below both sets of comparable deals it prints

Two documents landed at 8.44 on Tuesday morning, and the interesting one is the slide deck.

Valley National Bancorp has agreed to buy Providence Financial Corporation, the parent of Providence Bank and Trust, for about $247m. Providence runs 14 branches around Chicago and northwest Indiana and held roughly $1.6bn of assets, $1.3bn of deposits and $1.1bn of loans at 30 June, with a further $800m of wealth assets under management.

The consideration is 4.3854 Valley shares and $21.47 in cash for every Providence share. On Valley's closing price of $14.10 on Monday, which is the price the filing uses, that is $83.30 a share. About 74 percent of it is stock and about 26 percent is cash, and roughly 13 million new Valley shares are involved, leaving Providence holders with 2 percent of the combined company.

The bank has priced its own deal against the market and published the result

Most acquirers assert that they paid a sensible price. Valley printed the comparison.

The deck puts the transaction at 1.45 times tangible book value and sets two bars beside it: 1.65 times for every Chicago-focused bank deal since 2010, and 1.52 times for every American bank deal since September 2025 in the $200m to $500m range. Both sit above it. The same slide gives 9.7 times annualised first-half earnings.

One caution about that multiple. Providence's tangible common equity is given elsewhere in the same deck as $163m at 30 June, and $247m over $163m is 1.52 times, not 1.45. The presentation does not say which equity base or which date its own figure uses, so the 1.45 is reported here as the company's number rather than as a checked one.

What the deal costs to do

Cost savings are put at about 25 percent of Providence's non-interest expenses, or $10m a year before tax, three quarters of it in 2027 and all of it after that.

Getting there costs $17m of restructuring charges, also before tax. That is 1.7 times a full year of the savings, and the deck says so in those words rather than burying it.

The other marks are the ordinary furniture of a bank purchase and are worth reading for what they say about the loan book. Valley is taking a credit mark of 1.65 percent of total loans, which it describes as 1.1 times Providence's own reserves, with no CECL double-count. Core deposit intangibles come in at 3.0 percent of $1.0bn of non-time deposits, amortised over ten years. Owned branches are written up by $10m and released over thirty.

Why Chicago, on the bank's own account

Valley entered the market in 2022 through Bank Leumi USA and has been commercial-only there since, with $0.3bn of deposits against $0.8bn of loans. Providence brings the other side of the balance sheet. The combined Chicago franchise is put at $1.6bn of deposits and $1.9bn of loans.

The funding is the point the deck returns to. Providence paid 1.49 percent for its deposits in the second quarter. The deck names eight Illinois banks with most of their deposits in the Chicago area and prints each one's cost, and Providence comes in cheaper than six of them and dearer than two, the two being Old Second at 1.00 percent and Marquette Bank at 1.04 percent. Twenty-six percent of the deposits pay nothing at all, none are brokered, and the average account outside certificates of deposit has been open more than twelve years.

Steven G. Van Drunen, Providence's chief executive, becomes Valley's Market President for Chicago on close. Valley has also committed $3m over three years to civic and community organisations in the city.

What has to happen next

The transaction needs regulatory approvals and a vote of Providence shareholders, and Valley expects it to close early in the first quarter of 2027. A registration statement on Form S-4 is still to be filed, and the proxy statement and prospectus that go to Providence holders will sit inside it.

Until Valley's share price settles, so does the price. The exchange ratio is fixed and the cash is fixed, so the $83.30 is Monday's arithmetic and nothing more.