Hanover Bancorp in Mineola, N.Y., has agreed to buy Savoy Bank in New York.
The $838 million-asset Hanover said in a press release Thursday that it will pay $63 million in cash and stock for the $597 million-asset Savoy. The deal, which values Savoy at 125% of its tangible book value, is expected to close in the first half of 2021.
Savoy’s board owns about 49% of the bank’s outstanding stock.
Hanover will have eight branches and $1.1 billion in deposits when the deal closes. The company plans to use Savoy’s branch in midtown Manhattan to coordinate business development efforts in New York.
"We are very pleased to announce this transformational partnership … which accelerates each company’s expansion efforts and strategic initiatives while truly creating a best-in-class community bank in the New York City market," Michael Puorro, Hanover’s chairman and CEO, said in the release.
"We have been focused on a high-growth and high-profitability strategy that has created significant shareholder value since the company was recapitalized in 2012,” Puorro added. “As a combined company we will better be able to compete in this fast-evolving marketplace.”
Mac Wilcox, Savoy’s president and CEO, will join Hanover as chief revenue officer and head of commercial lending. Two Savoy directors will join Hanover’s board.
Savoy has a focus on Small Business Administration lending and owner-occupied commercial real estate. Hanover, which expanded in New York with last year’s purchase of Chinatown Federal Savings Bank, has focused on mortgages and commercial lending.
The deal is expected to be more than 20% accretive to Hanover’s earnings per share. It should take two years for Hanover to earn back any dilution to its tangible book value.
Stephens and Windels Marx Lane & Mittendorf advised Hanover. Janney Montgomery Scott and Gallet Dreyer & Berkey advised Savoy.
