As I said before AF is waiting to see how Congress acts on lifting the SIFI threshold. If nothing is decided in this year AF may decide to look for a merger partner shortly thereafter. I don't believe AF will be an independent company by this time next year.
They should get at least 1.5 book. I believe AF is waiting until the SIFI threshold is raised by Congress which will push up the stock price of potential suitors. For example NYB's stock price would probably go into the low 20's if the aforementioned occurred which could make it more acceptable for both companies in terms of price ie a 1 for 1 stock swap.
Community Could Lift EPS With Buy
The acquisition of Astoria Financial alone could provide New York Community with accretion of 14% in earnings per share.
August 10, 2015
We recently met with New York Community Bancorp’s management team and discussed the company’s current strategy, which is on a dual track that includes both an organic strategy and an acquisition strategy.
We believe New York Community (ticker: NYCB ) could spring past $50 billion to over $55 billion in mid-2016 organically; however, with Astoria Financial ( AF ) now potentially for sale with influence from an activist shareholder, we believe the probability of an acquisition has increased.
We believe the best strategic fit for New York Community would be an acquisition of Astoria. In an Astoria acquisition, New York Community could restructure and de-lever Astoria while raising some equity to restructure New York Community’s borrowings and provide excess capital to solve for future liquidity coverage ratio (LCR) needs.
In this scenario, we believe Astoria alone could provide New York Community with accretion of 14% in earnings per share and accretion of 9% in tangible book value per share (TBVPS), while an additional restructuring and capital raise would provide 19% EPS accretion and a 7% TBPVS with 7.5% tangible common equity/tangible assets (TCE/TA) after adding $5 billion of securities to improve liquidity.
While management has noted a list of potential deals once the regulatory environment or the right deal emerges, it does not appear to us that Astoria previously has been considered as a merger partner; therefore, we believe the recent activist investor filing of an investment in Astoria is new information and a new alternative for New York Community.
We are raising our pri
This explains why the stock has been moving up. I might be wrong but AF management has been setting the bank up to be sold but there may be no buyers at the price they want. I don't think anyone wants to sell at below 1.5 x book so AF may start to buy back stock or increase their dividend. AF stock is not trading at significant premium to make an acquisition accretive enough.
Things are about to get very interesting!
AF has for a long time has been prepping the bank to be acquired. They haven't made acquisitions, bought back stock or increased their measly dividend.
If and when the SIFI threshold is increased banking M&A will pick up. Because of their low cost deposits NYB may make a run at them. Either way AF will get taken over for at least 1.5 x book. I think 23 or 24 will get it done.
Be patient - it is only a matter of time!
This #$%$ is trying to hinder congress from raising the SIFI threshold above 50 billion. Fed members and even Obama aren't against this. I hope she doesn't have the influence over other democrats to vote against raising the threshold. Warren is an extremist who is a bad as an extremist Tea Party member. No wonder we have a dysfunctional congress!
This selloff is just an example of the Wall Street Charade. The manipulators move AAL up and now are moving it down so they can buy it cheap and move it up again. AAL moves up 20 - 25 percent and moves down the same percentage. Any time now the bell will ring and the stock will start to move up again. Rinse and repeat. That is how the " money changers" make their money - follow the bouncing ball!