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New York Community Bancorp Ceases $2B Deal with Astoria
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New York Community Bancorp, Inc.’s (NYCB - Free Report) shares declined more than 3% on Tuesday, after the company declared to call off the $2-billion strategic in-market merger deal, announced in Oct 2015, with Astoria Financial Corporation , the second largest thrift depository in the city. The deal was expected to be immediately accretive to NYCB’s earnings and tangible book value per share.
Both companies stated that their boards of directors have mutually agreed not to extend the merger agreement and to terminate the same, effective Jan 1, 2017.
The termination does not come as a surprise for the market. Last month, NYCB’s management had provided an update, stating that the company does not anticipate obtaining the required regulatory approval for closing the proposed merger, by the end of 2016.
Hence, under terms of the agreement, either of the company may end the proposed collaboration, if the merger does not take place by the end of 2016. Moreover, any extension would need to be approved by the companies’ board of directors, despite the parties’ commitment to the transaction.
Background
The deal was unanimously approved by the board of directors of both companies in Oct 2015, under which Astoria was planned to merge with and into New York Community, and Astoria Bank to merge with and into New York Community Bank. The merger was awaiting shareholders and regulatory approval and was approved by the shareholders in Apr 2016.
The collaboration was anticipated to enhance NYCB’s capacity as a residential mortgage lender and expand its franchise throughout the New York region, benefiting the customers of both the companies.
Notably, NYCB’s plans included a strong mixture of additional value and capital-enhancing actions. The company had plans for an immediate follow-on offering of their common stock, which was likely to raise common equity of about $650 million. Further, the bank had announced to reposition nearly $10 billion of wholesale borrowings.
NYCB stock currently carries a Zacks Rank #4 (Sell). The stock has significantly underperformed the Zacks categorized Savings and Loan industry’s gain of 25%, so far this year. Further, over the last 60 days, the Zacks Consensus Estimate edged down 1.9% to $1.05 for the current year.
The Zacks Consensus Estimate for the current year moved up by 2.7% to $1.91 for Citizen Financial and 26.7% to $6.62 for Meta Financial, over the past 60 days.
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New York Community Bancorp Ceases $2B Deal with Astoria
New York Community Bancorp, Inc.’s (NYCB - Free Report) shares declined more than 3% on Tuesday, after the company declared to call off the $2-billion strategic in-market merger deal, announced in Oct 2015, with Astoria Financial Corporation , the second largest thrift depository in the city. The deal was expected to be immediately accretive to NYCB’s earnings and tangible book value per share.
Both companies stated that their boards of directors have mutually agreed not to extend the merger agreement and to terminate the same, effective Jan 1, 2017.
The termination does not come as a surprise for the market. Last month, NYCB’s management had provided an update, stating that the company does not anticipate obtaining the required regulatory approval for closing the proposed merger, by the end of 2016.
Hence, under terms of the agreement, either of the company may end the proposed collaboration, if the merger does not take place by the end of 2016. Moreover, any extension would need to be approved by the companies’ board of directors, despite the parties’ commitment to the transaction.
Background
The deal was unanimously approved by the board of directors of both companies in Oct 2015, under which Astoria was planned to merge with and into New York Community, and Astoria Bank to merge with and into New York Community Bank. The merger was awaiting shareholders and regulatory approval and was approved by the shareholders in Apr 2016.
The collaboration was anticipated to enhance NYCB’s capacity as a residential mortgage lender and expand its franchise throughout the New York region, benefiting the customers of both the companies.
Notably, NYCB’s plans included a strong mixture of additional value and capital-enhancing actions. The company had plans for an immediate follow-on offering of their common stock, which was likely to raise common equity of about $650 million. Further, the bank had announced to reposition nearly $10 billion of wholesale borrowings.
NYCB stock currently carries a Zacks Rank #4 (Sell). The stock has significantly underperformed the Zacks categorized Savings and Loan industry’s gain of 25%, so far this year. Further, over the last 60 days, the Zacks Consensus Estimate edged down 1.9% to $1.05 for the current year.
Citizens Financial Group, Inc. (CFG - Free Report) and Meta Financial Group, Inc. (CASH - Free Report) are two Zacks Rank #1 (Strong Buy) stocks in the same space that have outperformed the broader industry’s growth year to date. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for the current year moved up by 2.7% to $1.91 for Citizen Financial and 26.7% to $6.62 for Meta Financial, over the past 60 days.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>