Astoria Financial Corp. agreed Wednesday to acquire Fidelity New York Federal Savings Bank for $160 million in cash, creating a $6.4 billion-asset thrift.
The purchase, at 1.6 times book value, is the third big thrift deal announced in the New York area in as many weeks. In late June, North Fork Bancorp agreed to buy Metro Bankshares for $142 million in stock, and last week Dime Bancorp said it would merge with Anchor Bancorp in a $511 million stock transaction.
Astoria, based in Garden City, will be the 14th-largest publicly traded thrift in the United States, with deposits of $4.1 billion and 46 branches.
Converted in April
The acquisition, which is expected to close in 1995's first quarter, is Astoria's first since it raised $330 million last November by converting to stock ownership. Fidelity shareholders will receive $29 cash for each share.
"Consolidation in this industry is inevitable and absolutely necessary," said George L. Engelke Jr., president and chief executive of Astoria. "Only the low-cost, efficient producers will survive."
Astoria will not close any of Fidelity's 18 branches on Long Island.
The bank expects to save $7 million by 1996, or 25% to 30% of Fidelity's expenses, from job cutbacks and back office consolidation.
Mr. Engelke plans to grow Astoria to $10 billion in assets.
Astoria shares closed at $33, up $1.625.
"It's a win for the Fidelity shareholder, who is getting a fair price for an attractive franchise," said Thomas F. Theurkauf Jr., analyst at Keefe Bruyette & Woods. "It's a win for Astoria, which will be larger, more efficient, and more profitable."
Fidelity expects to report a second quarter loss of $800,000 from a writedown of a derivative security that lost market value.
Thomas V. Powderly, chairman, president, and chief executive officer of Fidelity, will serve on Astoria's board and will consult for the new entity.