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Citizens Financial's (CFG) Investors Bancorp Buyout Gets Fed Nod

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Citizens Financial Group, Inc. (CFG - Free Report) has received regulatory approval from the board of governors of the Federal Reserve System to close the acquisition of Investors Bancorp, Inc. , announced previously in July 2021.

The Fed is set to use the 2023 stress test to recalculate the stress capital buffer requirement for CFG to reflect the material impact of Investors Bancorp’s acquisition into the company’s capital requirements.
    
Citizens Financial generally requires a two-year stress test cycle and will be receiving a new stress capital buffer this year. However, since this year's test does not include the effects of the acquisition, recalculation for 2023 is additionally required.

The acquisition of Investors Bancorp is expected to close early in the second quarter of 2022 in a cash-and-stock deal for an approximate value of $3.5 billion. This deal will solidify Citizen Financial’s banking franchise in the greater New York City and Philadelphia, PA metropolitan areas, and across New Jersey with additional 154 branches.

CFG’s total assets are expected to increase by approximately $27 billion, while deposits will grow by $20 billion post the acquisition. Further, the acquisition of Investors Bancorp will provide the company with an attractive commercial and consumer customer base.

Citizens Financial’s solid loan and deposit balances are likely to aid the company’s financials. It has been strengthening its balance sheet position through strategic acquisitions.  In February 2022, the company bought 80 East Coast branches and the national online deposit business from HSBC Bank U.S.A, N.A. In November 2021, the company acquired JMP Group LLC, while in September 2021, it acquired Willamette Management Associates.

Over the past year, shares of the company have rallied 18.2% compared with 7.2% growth of the industry.

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Currently, Citizens Financial carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Inorganic Moves by Other Finance Companies

First Horizon Corporation (FHN - Free Report) and TD Bank Group (TD - Free Report) signed a definitive agreement, wherein the latter will acquire FHN in an all-cash deal valued at $13.4 billion or $25 for each FHN common share.

TD anticipates the FHN acquisition to close by Nov 1, 2022. The buyout is subject to customary closing conditions, including approvals from First Horizon's shareholders, and the United States and Canadaian regulatory authorities.


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