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NYCB-Astoria deal termination leaves more questions


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Essential IR Insights Newsletter - February 2023

NYCB-Astoria deal termination leaves more questions

The merger between New York Community Bancorp Inc. and Astoria Financial Corp. would have created an almost $65 billion company. But that deal has been called off, which Raymond James analyst William Wallace IV says was shocking. "Astoria probably asked a bunch of questions, and they might have asked for New York Community to sweeten the pot. It just doesn't make sense for them to do that," Wallace said. "Given the opportunity to look at the terms, the board of Astoria probably was in a position of strength to say, 'Hey, maybe we can get a better exchange ratio. Maybe we want more cash,'" Piper Jaffray analyst Matthew Breese speculated.

A study released by The Pew Charitable Trusts showed that small banks in the U.S. have overdraft practices comparable to large institutions, which Pew says still fail to meet overdraft best practices. After a review of disclosures from 50 of the largest banks, Pew reported that two out of five banks structure transactions in a way that maximizes overdraft fees.

Elsewhere in banking:

The Swiss Competition Commission has fined various major European and U.S. banks over four instances of interest rate cartels. It fined JPMorgan Chase & Co. approximately CHF33.9 million for operating a bilateral cartel with Royal Bank of Scotland Group Plc between March 2008 and July 2009 with the aim of influencing the Swiss franc LIBOR benchmark. The two banks, along with Deutsche Bank AG and Citigroup Inc., were fined a total of approximately CHF14.4 million for conspiring to manipulate certain Yen LIBOR submissions from 2007 to 2010, and in one of the infringements the Euroyen TIBOR.

Wells Fargo & Co. — looking to resolve its living will deficiencies — may adopt a model used by other banks that calls for the bankruptcy of a firm's holding company, while multiple units are kept running or sold off eventually, sources told The Wall Street Journal.

In Minneapolis, U.S. Bancorp is partnering with Dallas-based Stream Data Centers to build a $250 million data center in Chaska, Minn. The approximately 56,000-square-foot facility, which will employ 18 full-time employees, is expected to be completed in early 2018.

Jonathan Raul dropped his charges against Hattiesburg, Miss.-based First Bancshares Inc. after the latter agreed to disclose additional information regarding the issuance of additional First Bancshares common shares. Raul had accused the company of misstating and omitting information on the preliminary proxy statement, amendments, and definitive proxy statement filed with the SEC in connection with the issuance of its common stock.

At Banner Corp., the number of shares voted "for" a director nominee must exceed the number of shares voted "against" a director nominee for a director nominee to be elected in an uncontested election, according to an amendment to the company's bylaws adopted Dec. 15.

The FDIC and the North Carolina Commissioner of Banks issued a consent order to Branch Banking and Trust Co., a unit of BB&T Corp., over internal control deficiencies related to the bank's Bank Secrecy Act and Anti-Money Laundering compliance program.

Speaking of regulators, Igor Oystacher and his proprietary trading company 3Red Trading LLC agreed to pay $2.5 million to resolve a lawsuit by the Commodity Futures Trading Commission accusing them of engaging in a manipulative and deceptive spoofing scheme while trading futures contracts on multiple futures exchanges.

Meanwhile, the OCC released a final rule setting forth a framework for placing uninsured national banks into receivership. The final rule will become effective Jan. 19, 2017.

The Federal Reserve Board has named 12 chairs and 12 deputy chairs for all of its Federal Reserve Banks for 2017. Each Federal Reserve Bank has nine directors.

Also, the public comment period is now open for proposed guidelines used to evaluate requests for joint accounts at Federal Reserve Banks.

In addition, the Fed board extended the comment period for a proposed rule on adopting additional limitations on physical commodity trading activities conducted by financial holding companies.

A spokeswoman for Blackstone Group LP confirmed that the asset manager is shutting down its Senfina Advisors LLC hedge fund amid increasing losses on its investments this year, Reuters reports.

Business development company Harris & Harris Group Inc. is proposing to split itself into two companies, citing dissatisfaction with the company's stock price and a "pessimistic view" of its business model.

Broker/dealer Jefferies LLC formed an alliance with Thailand-based Kasikorn Securities to provide equity research on companies based in Thailand.

And the WSJ reports that Intercontinental Exchange Inc.'s NYSE Arca incurred another technical glitch on its platform yesterday, affecting over 700 securities worth more than $1 trillion.

In other parts of the world

Asia-Pacific: Macquarie to get nod for Green Bank buy; Cognizant to acquire Australian insurer

Europe: French banks sue ECB over capital rules; global banks fined over rate cartels

Middle East & Africa: Fraud prevention in South Africa; currency black market curb in Nigeria

The day ahead

Early morning futures indicators pointed to a mixed opening for the U.S. market.

In Asia, the Hang Seng was up 0.37% to 21,809.80, and the Nikkei 225 fell 0.26% to 19,444.49.

In Europe, as of midday, the FTSE 100 fell 0.10% to 7,036.59, and the Euronext 100 was down 0.36% to 928.34.

On the macro front

The Bank Reserve Settlement report, the MBA mortgage applications report, the EIA petroleum status report and the existing home sales report are due out today.

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