Mon, Nov. 2, 8:40 AM
- KeyCorp's (NYSE:KEY) move on Friday to buy First Niagara Financial (NASDAQ:FNFG) for $4.1B in stock and cash was greeted with a "Bronx cheer" by the market - its stock closed more than 10% lower.
- KBW and Citigroup buy the dip, with KBW upgrading to Outperform from Market Perform and Citigroup boosting to Buy from Neutral.
- Also tumbling on Friday, First Niagara catches an upgrade to Neutral from Sell at Goldman Sachs.
- KEY +1.8%, FNFG +0.5% premarket
- Previously: Investors not impressed as animal spirits return to bank M&A (Oct. 31)
- Previously: KeyCorp buying First Niagara Financial for $4.1B (Oct. 30)
Sat, Oct. 31, 2:04 PM
- Sizable bank mergers were supposed to be no-brainers as lenders - weighed down by a sluggish lending environment, overlapping branch networks, and high regulatory costs - sought operating synergies. Unfortunately, regulators since the financial crisis have had different ideas about what banks should be doing with their capital (namely, storing it for a rainy day).
- The M&T/Hudson City merger finally getting approval (after a three-year delay), along with quick green lights for a couple of BB&T purchases began to give investors hope, and this week they got KeyCorp (NYSE:KEY) agreeing to buy First Niagara (NASDAQ:FNFG), and New York Community Bancorp's (NYSE:NYCB) deal for Astoria Financial (NYSE:AF).
- The reaction: KeyCorp is lower by more than 10% since the news was announced, and First Niagara by more than 6%; NYCB is off nearly 14%, and Astoria 11%.
- "This level of selloff is not typical," says Sterne Agee's Peter Winter. "Early reactions to bank transactions often are bumpy," says KeyCorp CEO Beth Mooney.
- CLSA's Mike Mayo calls Key's purchase "strategically good," but isn't a fan of the bank's plan to fund a major portion of the deal with stock. NYCB is also funding much of its buy with stock, and the deal includes a cut in the dividend - maybe not the greatest move considering the income-oriented lean of the bank's investor base, says Winter.
- Previously: More losses for NYCB as secondary prices; Astoria lower too (Oct. 30)
- Previously: KeyCorp not expecting M&T-like deal hold-up (Oct. 30)
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, BTO, IAT, SEF, IYG, FXO, FNCL, KBWB, FINU, QABA, KRU, KBWR, RWW, RYF, FINZ, KRS, XLFS
Fri, Oct. 30, 10:06 AM
- Speaking on a post-deal conference call, KeyCorp (KEY -6.9%) CEO Beth Mooney says the purchase of First Niagara (FNFG +0.2%) has been discussed with regulators, and she's not expecting it to get held up the way M&T Bancorp's acquisition of Hudson City was.
- Presentation slides
- The combined bank will be tops in market share in the Buffalo region and other areas in Upstate New York (M&T is currently #1 in Western NY). It also establishes Key in areas like Pittsburgh, Philadelphia, Hartford, and New Haven.
- Expect jobs cuts/branch closures, mostly in the Buffalo area as cost savings are hoped to be $400M annually, helping to boost ROTCE by 200 basis points and improve the cash efficiency ratio by 300 bps.
- Previously: KeyCorp buying First Niagara Financial for $4.1B (Oct. 30)
- Previously: Fed approves M&T's purchase of Hudson City; HCBK +5.4% (Sept. 30)
Fri, Oct. 30, 7:25 AM
- First Niagara (NASDAQ:FNFG) owners will receive 0.68 shares of KeyCorp (NYSE:KEY) and $2.30 in cash for each share of FNFG they hold. Based on KeyCorp's close of $13.39 yesterday, it works out to $11.40 per share for First Niagara vs. its close last night of $10.38, and $9 in September when the bank put itself on the block.
- The combined bank will have about $135B in assets, making it the 13th biggest in the U.S.
- Annual cost savings are expected to be north of $400M. KeyCorp sees the deal as being accretive to EPS in 2017 and providing IRR of roughly 15%.
- Needless to say, regulators must first give their approval, but the deal is hoped to close in Q3 of 2016.
- A conference call is set for 8 ET
- Source: Press Release
- FNFG +2.9% to $10.68, KEY -0.9% to $13.26 premarket
Thu, Oct. 29, 12:01 PM
- The deal could value First Niagara Financial (FNFG -2.2%) at modest premium to its current market cap of just under $4B, reports the WSJ, which says we could see an official announcement as soon as tomorrow.
- Before First Niagara owners are too disappointed, they should be reminded the stock is higher by about 18% since reports of the bank being on the block first hit one month ago.
- KeyCorp (KEY -1.4%)
Fri, Oct. 23, 9:04 AM
Fri, Oct. 23, 7:57 AM
- Q3 net income of $52.9M or $0.15 per share vs. $53.3M and $0.15 in Q2.
- Net interest income of $263.5M up from $263.1M in Q2, down from $273.3M a year ago, with NIM slipping to 2.98%.
- Noninterest income of $83.4M vs. $75.4M a year ago. Mortgage banking income of $5.1M vs. $4.4M, Deposit service charges of $22.9M vs. $20.4M, Wealth management of $14.6M vs. $15.4M.
- Noninterest expense of $245.4M vs. $249.5M a year ago. Salaries and employee benefits of $113.8M vs. $116.2M. Occupancy and equipment of $25.5M vs. $27.5M. Professional services of $18.1M vs. $14M.
- Total loans of $23.4B vs. $22.465B a year ago, with commercial loans of $14.249B vs. $13.679B.
- CET 1 ratio of 8.5%.
- Conference call at 8:30 ET
- Previously: First Niagara EPS in-line, misses on revenue (Oct. 23)
- FNFG flat premarket
Fri, Oct. 23, 7:30 AM
Thu, Oct. 22, 5:30 PM
Fri, Oct. 2, 11:33 AM
- The long-awaited regulatory approval of the M&T Bank's purchase of Hudson City Bancorp, and the relatively quick green light for BB&T's acquisition of Susquehanna Bancshares has lifted M&A animal spirits in the regional bank sector.
- Another possible buyer could be Regions Financial (NYSE:RF) - its done well on its annual stress tests, and has expressed a willingness to look into deals. There's also Memphis-based First Horizon National (NYSE:FHN), though at least one activist believes the bank is more target than hunter.
- Possible sellers include First Niagara Financial (NASDAQ:FNFG), which has already put itself on the block.
- A target for BBT or Regions might be Georgia's Synovus Financial (NYSE:SNV), with $27B in assets, and an activist investor pushing for a sale.
- Another target might be Astoria Financial (NYSE:AF), with $15.3B in assets, and a neighbor in New York Community Bancorp (NYSE:NYCB) which might be on the hunt for acquisitions.
Thu, Oct. 1, 2:53 PM
- "At a time when acquirers are seeking deposit-rich franchises, First Niagara (FNFG +1.9%) offers an attractive footprint with a clean balance sheet and a desirable loan/deposit ratio of 82 percent," says Compass Point's Laurie Hunsicker, initiating coverage with a Buy rating and $12 price target.
- She notes the bank's bloated efficiency ratio of 70% offers plenty of fat to trim for enterprising acquirer.
Wed, Sep. 23, 12:40 PM
Wed, Sep. 23, 9:12 AM
Tue, Sep. 22, 8:48 PM
- First Niagara Financial (NASDAQ:FNFG) +4.9% AH reportedly is exploring a sale of the company or other strategic opportunities, and has hired JPMorgan Chase to advise it on possible moves.
- DealReporter said earlier that the bank had contacted possible buyers, and listed New York Community Bancorp (NYSE:NYCB), Toronto-Dominion Bank (NYSE:TD) and Huntington Bancshares (NASDAQ:HBAN) among possible suitors.
Tue, Sep. 22, 5:40 PM
Fri, Jul. 24, 10:14 AM
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