Sterling Bancorp (NYSE: STL) and Astoria Financial Corp (NYSE: AF) said they agreed to merge in a stock-for-stock deal valued at $2.2 billion. Upon closing, Sterling stockholders will own approximately 60% of the combined company and Astoria stockholders will own approximately 40%.

The combined entity, to be known as Sterling Bancorp, will be the sixth largest regional bank in the New York City area with $29 billion in assets, $20 billion in loans and $19 billion in deposits, serving business owners and consumers in New York City, the Hudson Valley, Long Island and northern New Jersey. Its principal banking subsidiary will operate under the name Sterling National Bank.

“By joining forces, Astoria and Sterling will create one of the leading banking enterprises in the NYC metropolitan area and will be well positioned to deliver performance and value for our customers, shareholders, employees and communities,” said Jack L. Kopnisky, President and CEO of Sterling.

“We are very pleased to be merging with Sterling Bancorp. Astoria Bank’s strong presence in attractive markets should provide Sterling with an ideal platform from which to continue executing on their differentiated, team-based commercial relationship model,” said Monte N. Redman, President and Chief Executive Officer of Astoria.

The leadership team of the combined company will be assembled from both organizations, with Sterling Bancorp’s Jack Kopnisky serving as President and Chief Executive Officer and Luis Massiani serving as Chief Financial Officer. At closing, four members of the Board of Directors of Astoria will join the Board of Directors of the combined company.

The deal calls for a fixed exchange of 0.875 shares of Sterling common stock for each share of Astoria common stock. The resulting purchase price of $21.92 per Astoria share represents an 18.6% premium to Astoria’s share price as of the close of business on March 6, 2017.

The deal has been approved by the Boards of Directors of both companies, and is expected to close in the fourth quarter of 2017, subject to approval by each company’s stockholders, as well as regulatory approval and other customary closing conditions.

RBC Capital Markets and Citi are lead financial advisors to Sterling. Squire Patton Boggs is acting as Sterling’s legal counsel. Sandler O’Neill + Partners LP is serving as financial advisor to Astoria. Wachtell, Lipton, Rosen & Katz is acting as Astoria’s legal counsel.

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