Sterling Bancorp To Buy Astoria Financial In a $2.2 Billion Stock Deal

Sterling Bancorp announced Tuesday a deal to buy Astoria Financial Corp. in a stock deal valued at about $2.2 billion, to create a regional bank serving the New York City metropolitan area. Under terms of the deal, Sterling will exchange 0.875 of its shares for each Astoria share outstanding. Based on Monday's closing prices, the deal values Astoria shares at $21.92 each, or an 18.6% premium. After the merger closes, which is expected in the fourth quarter of 2017, Sterling shareholders will own 60% of the combined company, which will be known as Sterling Bancorp. The deal is expected to boost Sterling's tangible book valued per share by 12%, increase earnings per share by 9% in 2018 and by 16% in 2019, and generate $100 million synergies. Astoria's stock surged 8.6% in premarket trade after a halt was lifted, while Sterling shares were still inactive. Over the past three months through Monday, Astoria's stock has gained 4.2%, Sterling shares have tacked on 3.5%, the SPDR S&P Regional Banking ETF has climbed 5.1% and the S&P 500 has advanced 6%.