Investors Bank Agrees to Buy Marathon Bank, Deepens Reach

“This continues our strategic initiative to expand in the boroughs, in the greater New York area,” Mr. Cummings said. “But certainly our New York franchise is very significant already. We kind of went in there in a big way and opened up our loan production office in January 2010 and that office has originated over, I would say through today, over $1.5 billion of loans.”

Marathon is the U.S. subsidiary of Piraeus Bank S.A., and so likely familiar to the city’s Greek community—the bulk of which is concentrated in the Astoria neighborhood of Queens. With the ongoing financial crisis in Greece, Mr. Cummings pointed out that the acquisition provided the upside of continued support of the city’s Greek community, without exposure to the calamitous events taking place there.

“Through our acquisition of Millennium Bank in 2010 we’ve been in Astoria,” he pointed out. “So we’ve been serving that community anyway with our two Astoria branches.”

Christine Barry, a research director at Aite Group—an independent research and advisory firm that focuses in part on business’ impact on the financial services industry—said that acquisitions like this one provide a leg up in New York’s competitive lending environment.

“We’re seeing a lot of the smaller banks trying to carve out a niche,” Ms. Barry said. “Competition is becoming a lot fiercer throughout all the markets—and in the New York market especially, because there are so many banks. So Investors Bancorp through this acquisition can go after Greek Americans, of which there are many in the New York area.” She said that special services and products tailored to particular communities can be part of the mix as well.

In Queens alone, there are over 16,000 Greek households according to the U.S. Census Bureau’s 2006—2010 American Community Survey.

Marathon is headquartered in Astoria and has $902 million in assets, $783 million in deposits and over a dozen full-service branches in the New York tri-state area.

“They’re much more like a commercial bank than we are because 94 percent of their assets are in commercial assets,” Mr. Cummings said. “And, more importantly, they have a lower cost of funds because they’re a commercial bank of 60 basis points and non-interest bearing deposits of approximately 28 percent.”

He added that Investors would now be able to service Marathon’s customers with “our larger lending capabilities,” making larger loans. “The bottom line is it’s a very clean portfolio from a credit perspective.”

Pending regulatory approvals, the deal is expected to close in the fourth quarter of 2012.