Flushing Bank’s acquisition of Empire National Bank is expected to create a bank with $8bn in assets, $5.8bn in deposits and 23 branches

Flushing Bank

Image: Flushing Financial to acquire Empire National Bank. Photo: Courtesy of Gerd Altmann/Pixabay

New York-based Flushing Financial Corporation, the parent company of Flushing Bank, has signed an agreement to acquire Empire Bancorp, the holding company of Empire National Bank, for $111.6m.

Under the terms of the agreement, each share of Empire has been valued based on the closing stock price on 24 October 2019 and each share of Empire will be exchanged for either 0.6548 shares of Flushing common stock or $14.04 in cash.

The deal is subject to proration procedures specified in the merger agreement which allow for an aggregate split of the total consideration of 50% of Flushing common stock and the remaining 50% in cash.

Empire National Bank offers financial services to small and medium-sized businesses, professionals, non-profit organisations, real estate investors and consumers through a variety of customised loan and deposit products and business banking services.

The bank has four full-service banking offices in Islandia, Shirley, Port Jefferson Station and Mineola.

Flushing Bank will remain as the surviving entity after the deal is closed

After the deal is closed, Empire National Bank will merge with and into Flushing Bank, with Flushing Bank as the surviving entity.

Flushing Bank stated that the value of the transaction represents 1.4 times Empire’s tangible book value and 3.6% deposit premium based on 30 June 2019 financial information.

The transaction is expected to be accretive to earnings by 19% in 2021, but will be dilutive to tangible book value by 7% at closing. The projected earn-back period has been calculated to be 3.2 years using cross-over method.

Closure of the deal will be subject to customary closing conditions such as the receipt of regulatory approvals and approval from Empire Bancorp’s shareholders.

The combined entity is expected to have $8bn in assets, $6.3bn in loans, $5.8bn in deposits and 23 branches across Queens, Brooklyn, Manhattan and Long Island.

Flushing Financial president and CEO John Buran said: “I am pleased to welcome Empire National Bank, a commercial bank with deep ties to the Long Island community and a strong track record of growth, into the Flushing Bank family. I am confident that combining our two companies will be compelling to our respective shareholders, customers, and employees.

“There are some strong synergies between our two organizations both culturally and operationally. We both share a similar focus towards serving small and medium sized businesses and have a similar core customer base. Additionally, we are both focused on building relationships with the communities we serve and believe strongly in giving back to those communities.

“This transaction will allow Flushing Bank to expand its Long Island presence with the addition of three Suffolk County locations. I am confident the Empire National Bank customers will be pleased with the warm welcome and exceptional level of service they will receive from the Flushing Bank staff.”