Compass Point analysts pointed to Investors Bancorp Inc. as a possible suitor for Lake Success, N.Y.-based Astoria Financial Corp., especially considering a recent bank stock rally increases the chances of another bidder emerging.
On Dec. 20, Astoria Financial and Westbury, N.Y.-based New York Community Bancorp Inc. announced that they mutually agreed to terminate their merger deal, effective Jan. 1, 2017.
Continuing with their extrapolation that Investors was the unnamed "Party A" bidder for Astoria mentioned in merger documents, Laurie Havener Hunsicker, Scott Valentin and Jesus Bueno noted that at the time of Party A's all-stock bid for Astoria in October 2015, Investors' stock was valued at $12.66. It closed at $14.05 on Dec. 23.
The analysts added that the Short Hills, N.J.-based company is capable of doing a deal, despite currently being under an informal agreement with the FDIC over Bank Secrecy Act and anti-money laundering compliance issues. Investors' pending acquisition of Bank of Princeton is not likely to stand in the way, either, according to the analysts, as closing is slated to occur during the first quarter of next year, allowing for new M&A activity.
However, FBR & Co. analyst Bob Ramsey earlier wrote that he believes Investors' informal agreement is precisely the reason it will not be able to pursue a deal anytime soon, as he estimates the agreement would sideline the company from any M&A activity for the next two or three years.