Sterling Bancorp in Montebello, N.Y., is hoping its latest Community Reinvestment Act rating will put to rest questions about its ability to buy Astoria Financial in Lake Success, N.Y.
The $14.7 billion-asset company said in a press release Monday that its bank received a “satisfactory” rating from the Office of the Comptroller of the Currency after its most recent examination. The exam covered a three-year period that ended on Jan. 27.
The OCC also noted that the bank had fully resolved the CRA data issues previously referenced in a confidential supervisory letter that was inadvertently released by the Federal Reserve on May 12.
“Sterling is proud of its significant community lending, investment, and service accomplishments and we are pleased with this outcome,” Jack Kopnisky, Sterling’s president and CEO, said in the release. “We remain confident that we face no obstacles to obtaining prompt regulatory approval for our pending merger with Astoria.”
Questions surfaced when the Fed, in part of a May 11 letter, outlined several issues it wanted Sterling to clarify before approving the company’s $2.2 billion deal for Astoria. The merger, announced in March, is this year’s biggest bank M&A deal.
The Fed noted that the OCC had determined that Sterling’s CRA data for 2014 to 2016 was “not reliable” and that the bank “lacks an effective process for collecting, verifying and reporting such data.” The Fed requested a description of Sterling’s efforts to address the deficiencies.
The letter’s comments on Sterling's CRA-related deficiencies were part of a confidential section posted by Matthew Lee, executive director of Inner City Press/Fair Finance Watch. Lee and the OCC were given copies of the letter.
Sterling, in Monday’s release, said it still expects to complete its purchase of the $14.6 billion-asset Astoria in the fourth quarter.