Flushing Financial and Empire Bancorp agreed to complete their merger under an extended time frame.

“I am pleased that our respective boards have agreed to extend the timeframe for Flushing to complete the acquisition of Empire Bancorp Inc. (Empire) (OTC:EMPK), and we are now anticipating a fourth quarter close,” John R. Buran, president and CEO of Flushing Financial, said. “With this acquisition, we will create a community bank of superior scale and operational leverage that presents us with a greater ability to improve service to our customers and enhance shareholder value. The acquisition of Empire is consistent with our stated strategic objectives. This acquisition will reduce our cost of funds and increase our non-interest bearing deposits. It will make us more efficient in both the short and long term. The merger will expand Flushing’s presence in Long Island, a market of over 140,000 businesses with consumers having a median household income of over $100,000. Most importantly, we expect earnings accretion of 20% in 2021 with additional future opportunities as we build upon Empire’s business relationships. Finally, both of our companies have enjoyed a long history of conservative credit discipline. We believe the benefits of that discipline will be demonstrated in this challenging economic environment.”

“We believe the combination of these two strong community banks will further lever the significant investments both entities have made in people, processes and technology and positively impact our earnings potential,” Douglas C. Manditch, chairman and CEO of Empire, said. “We look forward to continuing to provide our customers with exceptional service and deliver enhanced value to our shareholders.”

The transaction value based on Flushing’s recent stock trading price represents 0.96x Empire’s tangible book value and a 0.4% deposit discount based on June 30, 2020 financial information. On a combined basis, the transaction is expected to be accretive to earnings by 20% in 2021. It will be dilutive to tangible book value by 7.2% at closing with a projected earn-back period of 3.4 years using the cross-over method.
The combined company at close is expected to have approximately $8.2 billion in assets, $6.7 billion in loans, $6.0 billion in deposits and 24 branches in New York across Queens, Brooklyn, Manhattan and Long Island.

Under an amendment to the current merger agreement, Flushing and Empire will have the flexibility to close the proposed transaction on a basis that may result in all of the merger consideration received by Empire shareholders being taxable for U.S. federal income tax purposes, including the shares of Flushing common stock received in exchange for Empire common stock. The merger consideration will not otherwise be affected.

Completion of the proposed transaction is subject to customary closing conditions, including the approval of the amendment by Empire’s shareholders at a special meeting of shareholders, which will be held as soon as practicable. As previously announced, the required regulatory approvals for the proposed transaction have been obtained, although the amendment is subject to receipt or waiver of regulatory approvals related to the amendment in accordance with the prior approval orders.

In addition, the deadline by which Empire shareholders must submit their election to receive cash, shares of Flushing common stock, or both as “merger consideration” in connection with the proposed transaction will be 5 p.m. EST on the date of the supplemental shareholder meeting. All elections will be subject to the election, allocation and proration procedures set forth in the merger agreement and the amendment and Empire shareholders will receive updated election materials at the time of the distribution of the proxy materials for the supplemental shareholder meeting.