March 7 (Reuters) - 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 Astoria Financial. (Reporting by Nikhil Subba in Bengaluru; Editing by Sai Sachin Ravikumar)