NEW YORK ( TheStreet) -- Investors Bancorp ( ISBC) of Short Hills, N.J., has agreed to purchase the troubled Brooklyn Federal Bancorp ( BFSB) for 80 cents a share, or an aggregate of $10.3 million. The deal price represents a discount to Brooklyn Federal's closing price of 85 cents a share, on Tuesday. Investors Bancorp also announced "a separate agreement with a real estate investment fund," to sell most of Brooklyn Federal's commercial real estate loan portfolio upon completion of the merger, which is expected in the fourth quarter. The deal will expand Investors Bancorp's presence in New York, with five full-service branches in Brooklyn and Long Island, and $411 million in deposits. As of June 30, Brooklyn Federal's main subsidiary Brooklyn Federal Savings Bank had $469.5 million in total assets and $117.3 million in nonaccrual loans, according to regulatory data supplied by SNL Financial, for a very high nonperforming assets ratio of nearly 25%. Most of the problem loans are categorized as commercial real estate or multifamily mortgage loans. The thrift subsidiary was operating under an Office of Thrift Supervision cease and desist order from March 31, under which it agreed to raise additional capital or merge with another institution. Investors Bancorp was recently included among TheStreet's 10 Banks with Solid Revenue, which highlighted bank and thrift holding companies that had achieved significant year-over-year revenue improvements, irrespective of the releases of loan loss reserves that have boosted the bottom line earnings of the most familiar U.S banking names over the past several quarters. Both holding companies are mutual holding companies, meaning that only some of the common shares float publicly, while the rest are held by a mutual holding company, which is controlled by the depositors. Brooklyn Federal's common shareholders will receive 80 cents in cash for each common share they hold, while Brooklyn Federal's common shares held by the mutual holding company will be converted into common shares of Investors Bancorp. Investors Bancorp said the deal would result in "0.5% dilution fully-converted tangible book value at closing," and that the transaction was expected to be "accretive to EPS in 2012," with an estimated "internal rate of return in excess of 20%."