Sterling Bancorp in Montebello, N.Y., has agreed to buy Astoria Financial in Lake Success, N.Y., just a few months after other merger plans by Astoria fell through.
The $14.2 billion-asset Sterling said Tuesday that it would pay $2.2 billion in cash and stock for the $14.6 billion-asset Astoria. The deal, which is expected to close in the fourth quarter, is the biggest in banking announced so far this year.
The acquisition values Astoria at 159% of its tangible book value.
Sterling would have $29 billion in assets, $20 billion in loans and $19 billion in deposits when the deal closes.
The combination “will create one of the leading banking enterprises in the [New York City] metropolitan area and will be well positioned to deliver performance and value for our customers, shareholders, employees and communities," Jack Kopnisky, Sterling’s president and CEO, said in a news release.
"We are excited about the opportunity to … extend Sterling's business banking solutions across a substantially larger market area, while introducing Astoria's retail products to a wider financial center network,” Kopnisky added.
The agreement comes three months after Astoria and New York Community Bancorp in Westbury
Basswood Capital Management, which had once
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Sterling said it expects the deal to be about 12% accretive to its tangible book value per share at closing. The acquisition should be 9% accretive to 2018 earnings per share, excluding restructuring charges, and 16% accretive the following year.
Sterling said it expects to cut 35% of Astoria’s annual noninterest expenses, or about $100 million.
Four Astoria directors would join Sterling’s board.
RBC Capital Markets, Citigroup and Squire Patton Boggs advised Sterling. Sandler O'Neill and Wachtell, Lipton, Rosen & Katz advised Astoria.