Singapore markets open in 5 hours 59 minutes
  • Straits Times Index

    -43.52 (-1.37%)
  • S&P 500

    +24.83 (+0.63%)
  • Dow

    +293.99 (+0.92%)
  • Nasdaq

    +18.90 (+0.16%)
  • Bitcoin USD

    -321.87 (-1.14%)
  • CMC Crypto 200

    +8.91 (+1.49%)
  • FTSE 100

    +68.45 (+0.93%)
  • Gold

    +13.60 (+0.69%)
  • Crude Oil

    +0.57 (+0.85%)
  • 10-Yr Bond

    +0.1070 (+3.15%)
  • Nikkei

    -388.12 (-1.42%)
  • Hang Seng

    -517.88 (-2.65%)
  • FTSE Bursa Malaysia

    -9.92 (-0.70%)
  • Jakarta Composite Index

    -65.75 (-0.98%)
  • PSE Index

    -18.70 (-0.29%)

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

Citizens Financial Group, Inc. CFG has received regulatory approval from the board of governors of the Federal Reserve System to close the acquisition of Investors Bancorp, Inc. ISBC, 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.

Zacks Investment Research
Zacks Investment Research

Image Source: Zacks Investment Research

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 and TD Bank Group TD 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.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

First Horizon Corporation (FHN) : Free Stock Analysis Report

Toronto Dominion Bank The (TD) : Free Stock Analysis Report

Investors Bancorp, Inc. (ISBC) : Free Stock Analysis Report

Citizens Financial Group, Inc. (CFG) : Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research