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Investors Bancorp discussing sale with advisors: WSJ
Posted on Wednesday, 07 November 2018 14:30
US-based regional lender Investors Bancorp is weighing a potential disposal and has appointed advisor Keefe, Bruyette & Woods to sound out interested suitors, the Wall Street Journal (WSJ) reported.
Citing people with knowledge of the matter, the paper cautioned the process is at an early stage and there is no guarantee the company will go ahead with a sale.
However, the WSJ did observe that since lawmakers raised the threshold for lenders to undergo the Federal Reserve’s stress tests from USD 50.00 billion in assets under management to USD 250.00 billion earlier this year, there is a wider pool of potential buyers for Investors Bancorp.
The group’s shares jumped 9.9 per cent after the report went public yesterday, closing at USD 12.51 and valuing the business at USD 3.65 billion.
Investors Bancorp’s stock price was down 17.6 per cent since the start of this year, prior to the news of the potential sale.
The New Jersey-headquartered lender, at a typical premium, could potentially be one of the largest commercial banking takeover targets in recent years, should an agreement eventually be made, according to Zephyr, the M&A database published by Bureau van Dijk.
A slow in loan growth in the industry, as well as increase in deposit costs has caused many banks to face challenges as of late, the WSJ noted, adding Investors Bancorp is among those that have been struggling.
It paid customers a 1.4 per cent rate on interest-bearing deposits in the third-quarter, compared to 0.5 per cent by Bank of America in the same timeframe.
The company, as of 30th September 2018, had total assets of USD 25.52 billion, net loans of USD 20.73 billion, total deposits of USD 17.40 billion and a non-interest income of USD 10.30 million for the third quarter of 2018.
Additionally, Investors Bancorp is tied to an agreement with regulators to improve its anti-money laundering controls, an area that often holds up mergers and acquisitions from taking place.
© Zephus Ltd