Valley National Bancorp VLY closed the sale-and-leaseback deal for 26 out of the previously-announced 29 properties, for $100.5 million. The properties consisted of 25 branches and one corporate location.
The pre-tax net gain from these 26 properties is nearly $78 million (after transaction-related expenses). Valley National expects to complete the sale and leaseback of the remaining three properties in the second quarter of 2019, subject to due diligence. The company projects pre-tax net gain of more than $3 million from the remaining properties.
At the time of the deal’s announcement this February, Valley National had projected the above-mentioned decisions to be slightly accretive to its earnings over the first full year of the transactions. This will exclude severance charges likely to be incurred by the company.
Further, Valley National’s CFO, Alan Eskow, had stated that the properties identified in the sale-and-leaseback transaction are in sync with the company’s long-term strategic plan, as well as the previously-announced Branch Transformation. The company is aimed at achieving efficiency ratio of less than 51% by 2020 through Branch Transformation.
Valley National’s shares have lost 12.5% over the past six months compared with the industry’s decline of 11.4%.
Valley National currently carries Zacks Rank #4 (Sell).
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