State Bancorp Inc. in Jericho, N.Y., said Wednesday that it redeemed $36.8 million of preferred stock issued to the Treasury Department as part of the Troubled Asset Relief Program.
The $1.6 billion-asset company said in a news release that the repayment is being funded by cash received from a senior note it issued to Valley National Bancorp in Wayne, N.J. Redeeming the preferred stock, issued in December 2008, is a condition of closing a merger between the two companies.
The $14.2 billion-asset Valley National will assume the outstanding warrant issued with the preferred stock to the Treasury Department.
Valley National’s acquisition of State Bancorp is expected to close in early January. Under the deal announced in April, State Bancorp shareholders will receive one Valley National share for each share they own, after making adjustments for a Valley National stock dividend. State Bank of Long Island branches will operate as Valley National Bank branches.