Valley National Bancorp (VLY) is expanding its footprint in the Westchester County market with the acquisition of The Westchester Bank. The acquisition is expected to close in Q4.
Under the agreement, Westchester investors will receive 229.645 Valley National shares for each Westchester share held, translating into about $210 million worth of Valley National shares.
Valley National Chairman, President, and CEO Ira Robbins said, “The ability to offer Valley’s comprehensive suite of financial solutions to Westchester’s commercial customers, along with the support of our larger balance sheet and significant capital resources, should drive meaningful growth for Valley in the Westchester County market.” (See Valley National stock chart on TipRanks)
This strategic acquisition will enhance Valley National’s current lending activities in Westchester County and provide it with a core low-cost funding base. The combined entity will have assets of $43 billion and loans and deposits of $34 billion each.
Recently, Morgan Stanley analyst Ken Zerbe reiterated a Hold rating on the stock with a price target of $15.30 (15% upside potential).
During the company’s recent Q1 earnings call, Zerbe asked for more color on the mortgage banking revenue dynamics.
To this, Valley National’s Senior Executive Vice President and Chief Banking Officer Tom Ladanza answered that the level of refinancing activity and lower interest rates led to fair value adjustments going down, but he expects a rebound in Q2.
Based on 1 Buy, 1 Hold, and 1 Sell, consensus on the Street is a Hold. The average Valley National price target of $14.10 implies 6% upside potential. Shares are up 70.2% over the past year.
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