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"Breakthrough": Bank Leumi's huge strategic move

Announces deal to merge Bank Leumi USA with Valley National Bank.

The transaction represents a value of approximately $ 1.2 billion for Bank Leumi USA (approximately 140% on equity).

Leumi is expected to post a profit after tax of NIS 650-750 million

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Thursday, 23 September 2021, 13:57 Updated: 14:01

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Tonight, Bank Leumi signed an agreement to merge Bank Leumi USA with Valley National Bank in a transaction that reflects Bank Leumi USA's value of approximately $ 1.2 billion (approximately 140% of equity). As a result of the merger, the Bank is expected to post a profit after tax of approximately NIS 650-750 million. After the merger, Leumi will hold more than 14% of the merged bank and will be the largest shareholder, but not the controlling shareholder. About 90% of the consideration for the transaction will be paid in shares of the merged bank and the balance in cash. Leumi will appoint two directors and observe the board of directors of the merged bank. Bank Leumi USA CEO Avner Mendelssohn is expected to serve as Deputy Chairman of the Board of Directors of the Merged Bank and members of the Board and senior executives will serve in a variety of key positions at the Merged Bank. Leumi and Valley National Bank also signed a cooperation agreement regarding Leumi's participation in the credit provided by Valley National Bank and the provision of banking services to customers of both banks. Leumi's significant holding in shares, ownership structure and cooperation agreement,Position Leumi in a position where it can realize its strategy to significantly expand its operations in the US market. The deal is expected to be completed during the first or second quarter of 2022.

The merged bank, which will become the 29th largest bank traded on the US stock exchange, will have the ability to grow in business activity in a variety of strategic areas, including a number of areas in which Leumi USA has unique expertise, including: tech, venture capital companies, entrepreneurship Real Estate and Private Banking. Bank Leumi USA operates in New York, Chicago, Florida and California.

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"Ensures customer commitment."

Bank Leumi CEO Hanan Friedman (Photo: Oren Dai)

Principles of the Leumi deal

• The transaction represents a value of approximately $ 1.2 billion for Bank Leumi USA (approximately 140% on equity).

  Leumi is expected to post a profit after tax of NIS 650-750 million

• This is a strategic move that will enable Leumi to significantly expand its operations in the United States and upgrade its commercial value proposition to its customers there.

• The merged bank will be the 29th largest bank among the banks traded on the US stock exchange. Leumi will be the largest shareholder in the merged bank and will hold more than 14% of the bank

• Leumi CEO Hanan Friedman: "This is a strategic move designed to intelligently expand business operations in the United States. The merger will give Leumi a significant and unprecedented presence for the Bank of Israel in the American market. This is a real line for our customers - the business and the high-tech industry, Now the capabilities of a large American bank with a commitment to Israeli customers "

"Significant and unprecedented presence of the Bank of Israel in the American market"

Valley National Bank operates in New Jersey, New York, Florida and Alabama. As of June 30, 2021, its pre-transaction assets are approximately $ 41 billion, with a credit portfolio of approximately $ 32 billion. Its profit for the first half of 2021 amounted to $ 230 million and for 2020 to about $ 378 million. Following the transaction, the merged bank will be able to expand its business operations to new markets throughout the United States and produce for its customers unique value propositions with a more diverse and comprehensive product portfolio.

Leumi CEO Hanan Friedman: "This is a strategic move designed to deepen and intelligently expand business operations throughout the United States. The merger will give Leumi a significant and unprecedented presence in the Bank of Israel in the American market. A wider product basket and capabilities of a large and prosperous American bank, led by a strong and experienced management team led by Ira Robbins, Chairman and CEO, joined by a management team from Bank Leumi USA. This ensures commitment to Israeli customers and employees, who will enjoy the benefits of work In a large bank with an impressive growth trend. "

Bank Leumi USA CEO Avner Mendelssohn: “After years of transformation, significant growth and establishing Bank Leumi USA as a leader in commercial banking, this merger is a natural step that is a strategic milestone in our journey to establish our unique operations and value proposition in the US market. At Valley as a bank and Ira Robbins, its chairman and CEO, we have found strategic partners unsuitable for realizing our vision. I am confident that our quality manpower and geographical distribution in our business areas will constitute growth engines for the merged bank. I am excited about the opportunities that the merger brings for the bank's employees and customers. "

Valley National Bank Chairman and CEO Ira Robbins: "We are very excited about the merger with Leumi USA Bank and the diverse growth opportunities we expect the partnership to bring with it. For the continuous improvement in the financing area we have been leading in recent years. In the lending segment, Leumi USA Bank will add diversity to emerging commercial and industrial sectors and help break into new geographic markets, including California and Illinois. "Leverage these new and unique platforms, together with the talented executives and employees of Leumi USA Bank, will constitute the next and exciting stage of our development as a large and leading commercial bank."

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