A New York investment group that is planning to buy a Long Island community banking company has agreed to pay the seller a $500,000 break-up fee if the oft-delayed deal is not completed by the end of this month.
FNBNY Bancorp Inc. announced in October 2010 that it was buying the $308 million-asset Madison National Bancorp Inc. in Melville, N.Y., for $33.7 million in cash. The deal was initially scheduled to close in last year's first quarter, but was twice delayed while the buyer waited for the Federal Reserve Board to approve its application to become a financial holding company.
The companies announced in early February that the deal had received all necessary regulatory and stockholder approvals, so it is unclear what has caused the latest delay. Officials at FNBNY and Madison were not immediately available to comment.
In a news release Tuesday, Madison said that the buyer had agreed to put $500,000 in escrow account at the bank and that it will have the right to terminate the deal and keep the funds if the sale is not completed by March 31.
If the deal is completed, Madison's bank subsidiary would be renamed First National Bank of New York and would continue to be run by its chief executive, Daniel L. Murphy. Madison said in Tuesday's news release that no branches would be closed as a result of the deal and that most of its executive officers and staff would remain at the bank.