The bank space saw the priciest deal announced in a year on Monday, May 14, as Cadence Bancorp. announced it would acquire State Bank Financial Corp. for $1.4 billion.
The all-stock deal is the largest aggregate deal value since May 2017 and will create a regional bank with about $16 billion in assets with geographic concentrations in Texas and Georgia. Shares of Cadence dropped 3.08% to $29.30, while State Bank improved 1.60% to $33.61.
In broader markets, investors were heartened by reports the U.S. and senior Chinese officials were discussing a targeted deal that would relax penalties on ZTE Corp., a Chinese telecom company, in exchange for unspecified demands from President Donald Trump, according to The Washington Post. The article said the discussions about the company, and its ability to operate under sanctions imposed by the United States, show how ZTE became a point of leverage for the United States. Investors interpreted headway in this space as signs that trade tensions between the two countries may be easing.
The Dow Jones Industrial Average grew 0.27% to 24,899.41, the S&P 500 added 0.09% to 2,730.13 and the Nasdaq Composite Index expanded 0.11% to 7,411.32.
In big banks, JPMorgan Chase & Co. rose 0.04% to $113.90, Citigroup Inc. dropped 0.33% to $72.62, Bank of America Corp. added 0.65% to $31.12 and Wells Fargo & Co. improved 0.06% to $54.48. The Federal Reserve disclosed that the unprecedented asset cap on Wells Fargo's growth will only be lifted by a vote of the Federal Reserve's Board of Governors, according to a letter from Fed Chairman Jerome Powell to Sen. Elizabeth Warren, D-Mass. Previously, the decision was considered to be in the hands of the Federal Reserve Bank of San Francisco, with the approval of the Fed's director of supervision and regulation.
In movers, Columbia Financial Inc. (MHC) added 1.31% to $16.19, East West Bancorp Inc. increased 0.96% to $70.28 and First BanCorp. expanded 2.28% to $7.62. BofI Holding Inc. fell 3.50% to $40.59, ServisFirst Bancshares Inc. declined 2.38% to $42.58 and Hilltop Holdings Inc. decreased 1.41% to $22.32.
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