Northfield Bank, the wholly-owned subsidiary of Northfield Bancorp, has agreed to acquire Hopewell Valley Community Bank for $54.9m.

The two parties will now merge into a 40-branch bank with$3.6bn in assets, $2.6bn in loans, and $2.4bn in deposits.

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The combined entity will operate with 19 branches in Hunterdon, Mercer, Middlesex, Somerset and Union counties, New Jersey as well as 21 branches in Staten Island and Brooklyn, New York.

Under the terms of the stock-cash transaction, 75% of Hopewell Valley’s outstanding shares of common stock will be exchanged for Northfield’s common stock at a fixed ratio of 0.9592 Northfield shares for each Hopewell Valley share, while the other 25% will be exchanged for $14.50 in cash.

Upon completion of the transaction, Hopewell Valley chairman Patrick Ryan will join the board of directors of both Northfield Bancorp and Northfield Bank.

Besides, Hopewell Valley CEO and president James Hyman will remain with Northfield in the role of regional president for the Hopewell Valley franchise.

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The deal, scheduled to be completed in the first quarter of 2016, has already received the nod from the boards of directors of Northfield, Northfield Bank and Hopewell Valley.

It is now subject to Hopewell Valley’s stockholder approval and customary regulatory approvals.

Northfield Bancorp chairman and CEO John Alexander said: "Hopewell Valley is a strong, commercially-focused, community bank, and we are very pleased with the opportunities this acquisition presents. This merger will establish an important presence for Northfield in Western New Jersey, and it complements and adds strategically to our franchise.

"We expect this combination to add loan diversity to Northfield’s operations, provide greater lending capacity in Hopewell Valley’s marketplace, and increase deposit market share in the communities served by Hopewell Valley."