4 Bank Stocks That Could Be Acquisition Candidates in 2021
Regional bank consolidation has really ratcheted up in the final months of 2020, with three major deals announced since October. The trend is only expected to continue in 2021 as regional banks look to further add scale and invest in digital capabilities to better compete with the megabanks. Acquisitions can often result in a nice premium for the bank being acquired, so it's a good idea to look for acquisition candidates. Although it isn't always the case, one good indicator of a potential bank acquisition candidate is a low price-to-tangible-book (P/TBV) value. Banks with higher P/TBVs tend to go after banks with lower P/TBVs in order to maximize the value of their stock currency. Here are four banks with more than $20 billion in assets that recently had low P/TBVs.
Investors Bancorp (NASDAQ: ISBC) is a $26.6 billion asset bank based in New Jersey. It looks to be a pretty standard commercial bank with standard commercial and residential lending products. As of this writing, the bank traded at a slight discount to tangible book value.
Notably, the bank recently acquired about eight branches in New Jersey and Pennsylvania from the Boston-based Berkshire Hills Bancorp (NYSE: BHLB). Investors Bancorp President and COO said the bank partly made the deal to keep competitors out, suggesting the bank is worried about the competitive landscape going forward. However, net income for the bank in the first nine months of 2020 is essentially flat from the first nine quarters of 2019, which is pretty good considering everything that has happened.
Source Fool.com
