Kevin Cummings went looking for a mutual thrift in New York City and came away instead with a Greek-owned national bank in Queens.

The chief executive of Investors Bancorp (ISBC) — itself a mutual — says he was happy to take what he could get in the $135 million cash deal for Marathon Banking, which has 13 branches and asset of $902 million.

Mutuals "are difficult to come by," says Cummings, whose Short Hills, N.J., bank entered New York in 2010 and has 10 branches in the city after buying the Brooklyn Federal Bancorp thrift in January. "It'd be difficult to do another transaction," he says. "If a [mutual] comes up we'll certainly have to look at that."

But Marathon, its sixth bank deal in five years, could be Investors' last until it takes the final step in its conversion to a bank holding company "in the near future or next year," Cummings says.

Investors sold $500 million shares in a 2005 initial public offering; its mutual holding parent still holds about 54% of its shares, worth roughly $934 million. The Marathon deal could move it closer to the conversion by improving its returns on equity.

Investors had been looking to buy another savings bank owned all or in part by its depositors because of certain financial perks in mutual-to-mutual mergers. Dilution to the buyer's equity is minimal, and partially converted mutuals tend to trade at low prices but surge in value after fully going public. That has given Cummings a window to persuade would-be sellers to do a cheap stock swap on the promise of a post-conversion windfall.

A deal for a mutual would have been nice, but the numbers behind the Marathon deal are favorable, Cummings says. Cash-strapped Piraeus Bank S.A. is the seller.

Marathon would fetch a slightly higher price than market watchers were predicting when news of an auction for the company was first reported in May. Investors agreed to pay 151% of Marathon's $89 million of tangible common equity. Experts had pegged the sale price at a likely 100% to 150% tangible book.

There were at least five bidders and two finalists, sources said. Investors could justify paying up for Marathon, which is profitable and has very few overdue loans.

Piraeus officials were also won over by Investors' certainty to close and concessions on social matters. Investors pledged to create an advisory board, give Marathon depositors the same second-step liquidation rights as Investors depositors and give Marathon's chairman and CEO, Paul Stathoulopoulos, a board seat.

"There was a competitive situation," Cummings says.

American Banker reported in May that New York Community Bancorp of Westbury, N.Y., (NYB), People's United Financial (PBCT) of Bridgeport, Conn., and Investors had expressed interest in Marathon. Valley National Bancorp (VLY) of Wayne N.J. was said to have been interested, too.

The price is fair, the deal's loan mark is low, and the potential cost savings are high, Cummings says.

Marathon is very liquid, with $250 million in securities and cash that Investors intends to use to fund loans. The deal would put Investors in Manhattan and Staten Island and nearly double its New York-area presence to 22 branches and deposits of $1.3 billion.

Investors noted in a presentation to analysts that five recent deals for other Northeastern banks with urban operations had median prices to tangible book of 184%.

The deal — announced late Thursday scheduled to close in the fourth quarter — would lower Investors' tangible book value by an estimated 2.5%, to $977 million. That is fairly a low dilution that Investors expects to recover through earnings within six months.

Sandler O'Neill & Partners analysts wrote in a research note on Friday that the "deal assumptions look reasonable" for Investors.

It "bolsters [Investors'] New York franchise and strengthens the funding profile," and "reduces the company's reliance on mortgage lending," the note said.

The price bodes well for other New York area banks and thrifts viewed as potential takeover targets. That includes New York Private Bank & Trust's Emigrant Savings Bank, which is reportedly exploring a sale of its 32 New York branches or online bank, as well as Astoria Financial (AF) and Dime Community Bancshares (DCOM).

Cummings had previously expressed interest in Emigrant's branches before his cautious M&A guidance Friday.

RBC Capital Markets advised Investors, which received a fairness opinion from Stifel Nicolaus (SF). KBW's Keefe Bruyette & Woods (KBW) advised Piraeus.

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