Republic Bank Will Acquire CrossLand Savings For $530 Million
NEW YORK (AP) _ Republic New York Corp. will acquire CrossLand Federal Savings Bank in a deal worth $529.6 million, the biggest buyout of a thrift this year.
The deal announced Monday further shrinks the number of New York banks and continues a nationwide spate of bank mergers fueled by a search for new customers and larger market shares.
Republic, a global investment bank that also operates a consumer bank in New York and Florida, will take over CrossLand’s 33 branch branches and 385,000 customer accounts. The combined bank will be the seventh largest New York area bank as measured by share of deposits, according to SNL Securities, Charlottesville, Va.
``Republic will have well over 1 million retail customers in the New York market,″ said Walter H. Weiner, chairman and chief executive of Repbulic, in a news release. ``CrossLand has a deposit base similar to our own.″
Under an agreement reached over the weekend, Republic will pay $41.50 for each share of Brooklyn Bancorp Inc., the holding company that operates CrossLand. Brooklyn Bancorp has $4.1 billion in assets and $3.7 billion in deposits.
Thrifts are savings and loans institutions that are similar to banks but have a different regulatory structure and concentrate mainly on home lending and consumer accounts.
Republic, a commercial bank with $41.7 billion in assets and $23.9 billion in deposits, has 66 branches in New York and south Florida and 950,000 accounts.
Banks all over the country are merging in a quest to better compete with companies like General Motors Co. and Charles Schwab, which offer traditional bank products like credit cards but don’t have high expenses from running branch networks.
In-market mergers are attractive to bankers because they can cut expenses by closing overlapping branches and consolidation operations. Last month, two of New York’s biggest banks, Chemical Banking Corp. and Chase Manhattan Corp., announced a $10 billion merger that will create the nation’s largest banking company and the No.1 consumer and business bank in New York. The combined bank will shut 100 branches and eliminate 12,000 workers.
Republic expects to complete the Crossland merger by the end of March 1996. The two banks will consolidate operations and expect ``significant″ cost savings as a result of the merger, Republic said. A spokesman said it is too early to determine how many branches or staff may be cut.
CrossLand was seized by the government in 1992 amid huge losses from bad realty loans. It was operated for a year by the Federal Deposit Insurance Corp., which sold shares to the public in August 1993. Since then CrossLand recovered by reducing bad loans and concentrating on its core mortgage and consumer banking business.
CrossLand’s shares rose $2.06 1/4 to $38.93 3/4 on the Nasdaq Stock Market. Republic’s shares were unchanged at $57.50 on the New York Stock Exchange.
As part of the agreement, Brooklyn Bancorp granted to Republic an option to purchase up to 19.9 percent of Brooklyn’s common stock under certain conditions.