Two of the biggest savings and loans in New York announced a $1.6 billion merger Friday, consolidating their loan portfolios in an environment of increasingly thin lending margins.
New York Community Bancorp
, a $12 billion-in-assets thrift based in Westbury, N.Y., will exchange stock worth $20.33 for each share of
,a $10 billion-in-assets thrift based in Jericho, N.Y.
The combined company will be slightly larger than New York's currently biggest thrift,
The companies expect the transaction to be immediately accretive to earnings. They also announced a concurrent balance-sheet restructuring in which they will sell off some $3.5 billion of securities, probably mortgage-backed bonds that are traditionally owned by home lenders.
North Fork Bank
, another New York-area savings and loan, announced a similar balance-sheet cleanup Tuesday.
North Fork's announcement was coupled with an earnings warning that cited a contracting lending margin, reflecting the 13 consecutive interest rate cuts carried out by the