March 7 Sterling Bancorp said on Tuesday
it would buy Astoria Financial Corp in an all-stock deal
valued at about $2.2 billion to create the sixth largest
regional bank in the New York City area by deposits.
The deal follows a spree of mergers between regional U.S.
banks last year, which were spurred by low interest rates,
lagging returns on equity and tough regulations.
However, U.S. President Donald Trump last month ordered
reviews of major banking regulations that were put in place
following the 2008 financial crisis.
Federal Reserve policymakers have also recently signaled
that a long-stalled 'liftoff' of interest rates may finally get
underway this year.
The deal between Sterling and Astoria will create a regional
bank that will have a diverse business mix, serving
business-owners as well as consumers in the greater New York
City metropolitan area, the companies said.
Astoria's shareholders will receive 0.875 Sterling shares
for each share they hold. The resulting offer price of $21.92
per share represents a premium of 18.6 percent to Astoria's
Monday closing price.
Sterling said it expects the deal to add about 9 percent to
its earnings per share in 2018 and about 16 percent in 2019,
assuming the merger closes in the fourth quarter.
Once the deal closes, Sterling stockholders will own about
60 percent of the combined company while Astoria stockholders
will own the rest.
RBC Capital Markets and Citi were lead financial advisers to
Sterling Bancorp while Sandler O'Neill + Partners advised
(Reporting by Nikhil Subba in Bengaluru; Editing by Sai Sachin