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Md. banks in deal; Goldman eyes Europe M&A; SEC chiefs to attend House hearing

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Md. banks in deal; Goldman eyes Europe M&A; SEC chiefs to attend House hearing

Olney, Md.-based Sandy Spring Bancorp Inc. agreed to acquire Rockville, Md.-based Revere Bank in a deal valued at $460.7 million. Upon closing, Sandy Spring shareholders will own approximately 74% of the combined company and Revere shareholders will own approximately 26% of the combined company. The deal is expected to close in the first quarter of 2020. Sandy Spring will have $11.2 billion in assets after the acquisition.

Goldman Sachs Group Inc. plans to add more than 30 wealth advisers over the next three years to cater to its clients in Switzerland, Germany and the U.K., Bloomberg News reports, citing Stefan Bollinger, co-head of Goldman's private wealth management for Europe, the Middle East and Africa. The investment bank would also consider acquisitions to grow assets in Europe, but any target would have to be "exclusively holding wealth of ultra-high-net-worth clients," Bollinger said.

Berkshire Hills Bancorp Inc. is bracing for an "adversely affected" third-quarter net income thanks to its unit Berkshire Bank's participating interest in a $16 million loan that went sour due to potentially fraudulent activity by the borrower. The Boston-based parent is working with the lead lender to pursue remedies. Based on the size of the loan and the timing of the event, Sandler O'Neill analysts Mark Fitzgibbon and John LaViola suspect the borrower is MyPayrollHR, which suddenly shut down Sept. 4. Pioneer Bancorp Inc. (MHC) previously disclosed it was the lead lender and had $16 million of exposure on the loan.

Russian hacker Andrei Tyurin pleaded guilty to charges that he stole data on more than 80 million JPMorgan Chase & Co. clients, Bloomberg News reports. Tyurin, who was accused of stealing customer data from 12 financial news companies, banks and other financial firms, including Fidelity Investments and E*TRADE Financial Corp. pleaded guilty to charges of conspiracy, wire fraud, illegal online gambling and computer hacking, according to the report.

The SEC fined PricewaterhouseCoopers LLP $7.9 million for allegedly violating its auditor independence rules by undertaking forbidden non-audit services during an audit engagement. The regulator also charged PwC partner Brandon Sprankle with causing the audit firm's independence violations.

Sean Stewart, a former Perella Weinberg Partners LP and JPMorgan Chase investment banker, was again convicted of insider trading, Bloomberg News reports. Stewart disclosed information related to five healthcare deals to his father, Robert Stewart, and the latter, along with two conspirators, profited off of the information from 2011 to 2014, prosecutors alleged.

Securities and Exchange Commission Chairman Jay Clayton and the agency's four commissioners — Robert Jackson Jr., Hester Peirce, Elad Roisman and Allison Herren Lee — are set to appear before the House Financial Services Committee today to discuss a range of topics, including cryptocurrencies, brokerage industry rules and environmental, social and governance disclosures.

Federal Reserve Bank of St. Louis President James Bullard said that the central bank may cut interest rates again in light of slowing global growth. Bullard, who voted against the Fed's Sept. 18 rate cut, indicated that the Fed policy "may be too restrictive" but did not explicitly say if he would support further lowering of rates again in 2019.

Charles Himmelberg, chief markets economist at Goldman Sachs Group, said at a conference that three-month real rates in the U.S. are at a 30-year high relative to the average for other developed economies, a strong signal that rates in the U.S. have further to fall.

The U.S. Treasury Department said it will publicly release data on Treasuries trading on a weekly basis through the Financial Industry Regulatory Authority, with the first publication scheduled for early 2020.

In other parts of the world

Asia Pacific: Chinese bank gets Hong Kong IPO approval; Japan mulls further easing in October

Europe: Greece's Piraeus, German bank fined; top Deutsche investor looking for new chair

Middle East & Africa: Tanzania fines 5 banks for anti-money laundering breach; Kenya holds rate

Now featured on S&P Global Market Intelligence

Lower for longer puts US banks behind eight ball: While the recent declines in interest rates could keep credit quality issues at bay for now, U.S. banks' net interest margins are heading lower. Lower rates will offer some relief from the rising funding costs of the last few years, but the challenging rate environment will put even more pressure on loan yields, causing margins to fall, according to S&P Global Market Intelligence's recently updated five-year outlook for the U.S. banking industry.

Ohio's largest community banks go hunting: Some of Ohio's largest community banks have been in an acquisitive mode recently, with two of the top seven announcing M&A deals with in-state peers in the last month.

California community banks growing faster than US median, but not as profitably: The median return on average equity for California's community banks and thrifts with less than $10 billion in assets was 9.35% in the second quarter, down 53 basis points year over year and much lower than the 10.45% median ROAE for community banks in the Western U.S. and 9.59% for the nation as a whole.

The day ahead

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

In Asia, the Hang Seng rose 0.22% to 26,281.00, and the Nikkei 225 lifted 0.09% to 22,098.84.

In Europe, around midday, the FTSE 100 fell 0.12% to 7,317.41, and the Euronext 100 was up 0.24% to 1,091.47.

On the macro front

Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

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