[NEW YORK] Webster Financial agreed to purchase Pearl River, New York-based Sterling Bancorp in an all-stock transaction that values the target at US$5.14 billion.
Under the terms of the deal, Sterling investors will receive 0.463 share of Webster for each of their shares, the two companies said Monday in a statement. That values Sterling shares at US$26.56, or more than 11 per cent higher than the closing price on Friday.
US regional banks have been combining in response to pressure from low interest rates, tepid loan demand and the need to boost technology spending to compete with bigger lenders. Giants such as JPMorgan Chase & Co are moving into new states and spending billions annually on digital offerings.
"This combination provides exceptional financial benefits and enables us to more aggressively invest in key businesses and activities," John Ciulla, Webster's chief executive officer, said in the statement. Ciulla will retain the CEO title at the combined company, which will keep the Webster name.
After the deal is completed, the bank will have US$63 billion in assets and US$52 billion in deposits. It will based in Stamford, Connecticut, according to the statement.