Brookline Bancorp in Boston has agreed to buy PCSB Financial in Yorktown Heights, N.Y.
The $8.6 billion-asset Brookline said in a press release Tuesday that it will pay $313 million in cash and stock for the $2 billion-asset PCSB. The deal, which is expected to close in the second half of this year, priced PCSB at 117.6% of its tangible book value.
PCSB Bank will retain its New York charter and operate as a separate bank unit of Brookline after the deal closes. PCSB has $1.3 billion of loans and $1.6 billion of deposits.
“This transaction represents a unique opportunity for Brookline to expand its banking operations into one of the country’s largest deposit markets through the acquisition of a complimentary commercial banking organization,” Paul Perrault, Brookline’s chairman and CEO, said in the release.
“PCSB has a high-quality loan portfolio, deposit base and talented employees, making it an excellent addition to our organization,” Perrault added.
Brookline said it expects the deal to be 13% accretive to its earnings per share. It should take the company less than four years to earn back an expected 7.5% dilution to its tangible book value.
Brookline said it plans to cut about 30% of PCSB’s annual noninterest expenses, or about $10.8 million. The company expects to incur $21.4 million of merger-related charges.
Michael Goldrick, PCSB’s chief lending officer, will become president and CEO of PCSB Bank. One PCSB director will join Brookline’s board.
Brookline was advised by Performance Trust Capital Partners and Goodwin Procter. PCSB was advised by Piper Sandler and Luse Gorman.