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F.N.B. Corporation (FNB) Gets Final Nod for Yadkin Merger

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Pennsylvania-based financial services company, F.N.B. Corporation (FNB - Free Report) received the final regulatory clearances from the Board of Governors of the Federal Reserve System and the Office of the Comptroller of the Currency (OCC) for its proposed merger with Yadkin Financial Corporation . The all-stock deal is expected to close by Mar 13, 2017, subject to customary closing terms.

F.N.B. Corporation and Yadkin had signed a definitive merger agreement in Jul 2016. Per the terms of the deal, shareholders of Yadkin will receive 2.16 shares of FNB common stock for each common share of Yadkin. This transaction will likely be tax free for shareholders of Yadkin. The merger was approved by shareholders of both the companies in Dec 2016.

The merger will enable F.N.B. Corporation to enter high-growth markets with enhanced products and services. According to the president and chief executive officer of F.N.B. Corporation, the company is now looking forward to deliver high-quality services and robust results for its shareholders, customers, and communities.

Upon closure, this transaction will expand F.N.B. Corporation’s operational base from the Mid-Atlantic region to the Southeast, with nearly $30 billion in total assets and more than 400 full-service banking offices. At present, the company carries a significant share in the retail deposit market in Pittsburgh, PA; Baltimore, MD; and Cleveland, OH. After the acquisition, the bank will add Charlotte, Raleigh-Durham and the Piedmont Triad (Winston-Salem, Greensboro and High Point) in North Carolina to its branch network.

Since the announcement of the merger deal on Jul 21, 2016, shares of F.N.B. Corporation and Yadkin have jumped significantly. F.N.B. Corporation’s shares increased 32.4%, while Yadkin surged 36.1%. However, the companies underperformed the Zacks categorized Banks - Southeast industry’s gain of 45%, over the same period.

Despite the substantial rise in prices and the merger declaration, the F.N.B. Corporation stock seems underpriced with respect to the Price-to-Book (P/B) ratio of 1.34 and Price-to-Earnings (P/E) ratio of 15.54 compared to the industry P/B and P/E ratios of  1.5 and 18.41.

Currenctly, F.N.B. Corporation carries a Zacks Rank #3 (Hold).

Stocks to Consider

Some better-ranked stocks in the same industry include Customers Bancorp, Inc. (CUBI - Free Report) and DNB Financial Corporation (DNBF - Free Report) . Both the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here

Customers Bancorp, Inc. has witnessed an upward earnings estimate revision of 5% for the current year in the past 60 days. Also, its share price is up 13.4% for the past three months.

DNB Financial Corporation recorded an upward earnings estimate revision of about 15% for the current year over the past 60 days. Moreover, its share price is up 20.7% for the past three months.

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