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Valley National (VLY) Completes Acquisition of Bank Leumi USA
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Valley National Bancorp (VLY - Free Report) has completed the previously announced acquisition of Bank Leumi Le-Israel B.M.’s U.S. banking arm, Bank Leumi USA. The deal, announced in September 2021, will broaden Valley National’s commercial product offerings, and expand its technology and venture capital banking business.
Therefore, it will solidify the company’s position as a top-tier, relationship-focused commercial bank. The pro-forma company, formed as a result of the merger, is the 29th largest publicly traded U.S. bank by assets.
As of Dec 31, 2021, Bank Leumi had $8.3 billion in assets, $5.8 billion of diverse commercial loans and $7.1 billion of low-cost deposits.
Ira Robbins, the CEO of Valley National, stated, “This transaction further solidifies Valley’s position as one of the premier full-service commercial banks in the country. We are incredibly excited about the new business capabilities and the differentiated growth opportunities that Bank Leumi will bring to our combined organization. On behalf of our board of directors and our executive leadership team, I’d like to welcome Bank Leumi clients and employees to the Valley family. We look forward to continuing our journey together.”
Per the deal, Valley National will issue 85 million shares and pay cash worth $113 million. Shareholders of Bank Leumi USA will receive 3.8025 shares of Valley National’s common stock and $5.08 in cash for each of their own shares held.
At the time of the deal announcement, the transaction was expected to be 7% accretive to Valley National’s earnings (on a fully phased-in basis) in 2023. A 1% dilution to tangible book value was projected, which will be earned back in nearly a year.
Also, the deal was projected to be effectively neutral to Valley National’s tangible common equity to tangible asset ratio at close.
Our Take
Valley National has been strengthening its footprint and product suites, as well as expanding inorganically through strategic buyouts. Last year, the company acquired Westchester Bank Holding Corporation and Dudley Ventures. These, along with the past acquisitions, have expanded its footprints and resulted in revenue and cost synergies.
In the past year, shares of Valley National have lost 5.6% against the industry’s growth of 8%.
M&T Bank Corporation (MTB - Free Report) also completed its acquisition of People's United Financial, Inc. for $8.3 billion. The combined company now has a network of more than 1,000 branches and 2,200 ATMs, spanning 12 states from Maine to Virginia and Washington, DC.
The acquisition accelerates M&T Bank’s growth trajectory and strengthens its financial profile for continued success. MTB will build on the complementary footprint of People’s United to reach a broad range of customers and expand into new regions.
The chairman and CEO of MTB, Rene Jones, said, “People’s United is a strong strategic and cultural fit and I am truly excited about the positive impact our combined company will have in the communities we serve. Together, we have the capabilities and scale of a regional bank with the engagement model of a community-based organization to help us better serve new and existing customers, businesses and communities.”
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Valley National (VLY) Completes Acquisition of Bank Leumi USA
Valley National Bancorp (VLY - Free Report) has completed the previously announced acquisition of Bank Leumi Le-Israel B.M.’s U.S. banking arm, Bank Leumi USA. The deal, announced in September 2021, will broaden Valley National’s commercial product offerings, and expand its technology and venture capital banking business.
Therefore, it will solidify the company’s position as a top-tier, relationship-focused commercial bank. The pro-forma company, formed as a result of the merger, is the 29th largest publicly traded U.S. bank by assets.
As of Dec 31, 2021, Bank Leumi had $8.3 billion in assets, $5.8 billion of diverse commercial loans and $7.1 billion of low-cost deposits.
Ira Robbins, the CEO of Valley National, stated, “This transaction further solidifies Valley’s position as one of the premier full-service commercial banks in the country. We are incredibly excited about the new business capabilities and the differentiated growth opportunities that Bank Leumi will bring to our combined organization. On behalf of our board of directors and our executive leadership team, I’d like to welcome Bank Leumi clients and employees to the Valley family. We look forward to continuing our journey together.”
Per the deal, Valley National will issue 85 million shares and pay cash worth $113 million. Shareholders of Bank Leumi USA will receive 3.8025 shares of Valley National’s common stock and $5.08 in cash for each of their own shares held.
At the time of the deal announcement, the transaction was expected to be 7% accretive to Valley National’s earnings (on a fully phased-in basis) in 2023. A 1% dilution to tangible book value was projected, which will be earned back in nearly a year.
Also, the deal was projected to be effectively neutral to Valley National’s tangible common equity to tangible asset ratio at close.
Our Take
Valley National has been strengthening its footprint and product suites, as well as expanding inorganically through strategic buyouts. Last year, the company acquired Westchester Bank Holding Corporation and Dudley Ventures. These, along with the past acquisitions, have expanded its footprints and resulted in revenue and cost synergies.
In the past year, shares of Valley National have lost 5.6% against the industry’s growth of 8%.
Image Source: Zacks Investment Research
Currently, Valley National carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
M&T Bank Corporation (MTB - Free Report) also completed its acquisition of People's United Financial, Inc. for $8.3 billion. The combined company now has a network of more than 1,000 branches and 2,200 ATMs, spanning 12 states from Maine to Virginia and Washington, DC.
The acquisition accelerates M&T Bank’s growth trajectory and strengthens its financial profile for continued success. MTB will build on the complementary footprint of People’s United to reach a broad range of customers and expand into new regions.
The chairman and CEO of MTB, Rene Jones, said, “People’s United is a strong strategic and cultural fit and I am truly excited about the positive impact our combined company will have in the communities we serve. Together, we have the capabilities and scale of a regional bank with the engagement model of a community-based organization to help us better serve new and existing customers, businesses and communities.”