Citigroup Buying Long Island's EAB

Updated from 5:52 p.m. EST:

Powerhouse financial Citigroup (C Quote) agreed Monday to acquire European American Bank for $1.6 billion, boosting its presence in the lucrative Long Island market and giving it a foothold in small- and middle-market commercial lending.

Citibank said the deal will make it the leading bank in terms of deposits on Long Island. EAB, a unit of Netherlands-based ABN Amro (ABN Quote), has $15.4 billion in assets and 97 branches, including 67 on Long Island and 30 in New York City.

The deal also includes the assumption of $350 million in preferred stock and is expected to close at midyear. Citigroup said it expects the deal to be accretive to earnings soon, adding a few cents by the end of the calendar year. The current consensus earnings estimate is $3.10, according to First Call/Thomson Financial. ...