Latest news with #regulatoryeasing
Yahoo
26-07-2025
- Business
- Yahoo
Pinnacle, Synovus to combine in $8.6B deal
This story was originally published on Banking Dive. To receive daily news and insights, subscribe to our free daily Banking Dive newsletter. Nashville, Tennessee-based Pinnacle Bank and Columbus, Georgia-based Synovus will combine in an all-stock, $8.6 billion deal that's expected to close in the first quarter of 2026, the companies announced Thursday. The transaction marks, by far, the largest bank combination announced since the second Trump administration has taken office – and the highest-profile example of a bank primed to cross the $100 billion-asset threshold amid expected regulatory easing. The combined entity will operate under the Pinnacle name once the transaction closes, and the Pinnacle holding company will move its headquarters to Atlanta, the banks said Thursday. Synovus CEO Kevin Blair will serve as president and CEO of the combined company, while Pinnacle CEO Terry Turner will be chair of the board of directors. That board will comprise 15 directors – eight from Pinnacle and seven from Synovus. Among other anticipated C-suite moves, Pinnacle Chair Rob McCabe will become vice chair and chief banking officer of the combined company. Meanwhile, Synovus CFO Jamie Gregory will serve as CFO of the combined company. Under the deal, Pinnacle will add Synovus' roughly $61 billion in assets to its current $54.8 billion total, and embrace the Georgia bank's 244-branch presence that spans five states. 'This is a strategic expansion, not a market consolidation,' Blair said on a call discussing the transaction. 'The merger creates a complementary footprint that fits together like puzzle pieces.' Market reaction, however, could be dismissed as underwhelming, as shares for Pinnacle and Synovus fell after the announcement. Jeff Davis, managing director of financial advisory firm Mercer Capital, credited the fact that none of the U.S.'s super-regionals were involved as an acquirer. 'Wall Street loves acquisitions that entail a premium for a seller, and Wall Street will have a much more nuanced view to mergers of equals,' Davis told Bloomberg. As it stands, Pinnacle and Synovus shares will be converted into shares of a new Pinnacle parent company at a ratio of 0.5237 Synovus shares per Pinnacle share, representing a value of $61.18 for Synovus shares, or roughly a 10% premium. The deal, though, validates speculation that circulated this week indicating Synovus had drawn interest as a takeover target – a complication Turner noted Thursday. 'We've been through a long few days having to stand on the sidelines while rumors swirled and stocks traded wildly,' Turner said, according to The Atlanta Journal-Constitution. Once the transaction closes, Pinnacle shareholders will own roughly 51.5% of the combined company, and Synovus shareholders will own the remaining 48.5%. 'We are two high-performing institutions with one powerful future,' Blair said in a statement Thursday. 'Our belief in the success of this merger is grounded in a decade of strong results and proven execution from both companies. … Together with Terry and the Pinnacle team, we are primed for continued outperformance, as we are not just combining forces – we are multiplying our impact.' 'First domino' Critically, the deal may represent 'the first domino in a new round of 'rack 'em and stack 'em,'' Michael Ashley Schulman, partner at Running Point Capital Advisors, told Reuters. 'A friendlier regulatory environment may help mint several new trillion‑dollar megabanks over the next decade, figuratively making Wall Street even more competitive,' he said. Indeed, early in President Donald Trump's second term, the $35.3 billion combination of Capital One and Discover had been marked as the go-to test case for what banks could expect from regulators amid a business deal. While banks have proposed perhaps a couple dozen deals since regulators signed off on Capital One-Discover, few transactions surpassed the $1 billion threshold. Notable exceptions include Columbia Banking System's roughly $2 billion acquisition of Pacific Premier, proposed in April, and Huntington Bank's $1.9 billion pending purchase of Veritex, announced last week. In the Pinnacle-Synovus deal, the banking space now has a multibillion-dollar potential template it can observe from start to finish under Trump-era regulators and supervisors. While Biden-era holdovers such as Federal Reserve Gov. Michael Barr have warned policymakers to 'resist the pressure' to deregulate, his successor as the central bank's vice chair for supervision, Michelle Bowman, ran point this week on a conference that gauged expectations on banks' capital framework. Meanwhile, regulators like Federal Deposit Insurance Corp. Acting Chair Travis Hill have long bemoaned the lengthy approval timelines for proposed deals. Indeed, where a combination like Capital One-Discover took 14 months for the Fed and Office of the Comptroller of the Currency to approve, Pinnacle and Synovus are hedging their bets on an eight-month timeline. Then there's the hotly contested Sun Belt in which the combination will play out. Synovus had already stated its intention to hire roughly 85 relationship managers by 2027 in markets such as Atlanta; Miami, Orlando and Tampa, Florida; Birmingham, Alabama; and Charleston and Columbia, South Carolina. Add to that the pressure cooker into which Fifth Third, PNC, Huntington, Citizens and Bank of America are vying to expand. Turner on Thursday said he expects the deal will 'extend our legacy of building share in the most attractive markets nationally.' Executives added they are making "significant employment commitments" in Nashville, Atlanta and Columbus, Georgia. Local market leadership, meanwhile, will remain intact, Blair said. "To me, this is so much more compelling than continuing to grow the bank organically," Blair said, according to American Banker. The companies said they expect to realize $250 million in cost savings from the deal, which is estimated to be roughly 21% accretive to Pinnacle's operating earnings per share in 2027. The bank expects to earn back its tangible book value per share in 2.6 years. Recommended Reading TD, BMO adjust their timelines for First Horizon, Bank of the West deals
Yahoo
28-06-2025
- Business
- Yahoo
Bull Market Ahead for Financial ETFs?
In the current market, investors are turning bullish on the financial sector. The Dow Jones U.S. Financials Index has added 22.94% over the past year, significantly outperforming the S&P 500 Index, which has gained 11.39%. The likelihood of the Fed cutting interest rates, along with signs of regulatory easing, has shifted investor sentiment in favor of the financial sector. According to Jay Woods, chief global strategist at Freedom Capital Markets, as quoted on Axios, the Fed may be on track to ease interest rates sooner than what investors had expected, potentially lowering capital costs for banks. Additionally, easing regulatory pressure appears to support the forecast. Per Woods, a potential deal between Bank of New York Mellon and Northern Trust can be a significant bullish factor for the sector. According to Axios, technical indicators suggest that the financial sector is primed for a recovery, following the tech sector's lead. According to Yahoo Finance, in a major move signaling a broader deregulatory shift, U.S. regulators proposed one of the most significant rollbacks of bank capital rules since the 2008 financial crisis. The proposal targets the enhanced supplementary leverage ratio (eSLR), which requires the largest U.S. banks to hold additional capital, based solely on their size. Under the new plan, that requirement would be reduced by 1.4 percentage points, from the current eSLR of 5%, which the largest U.S. banks, such as JPMorgan Chase JPM, Goldman Sachs Group GS and Morgan Stanley MS, are supposed to maintain. The aim is to make it easier for these institutions to lend more freely and increase demand for U.S. Treasuries, with additional regulatory changes for major banks on the horizon. According to TD analyst Jaret Seiberg, as quoted on Yahoo Finance, the proposed change is expected to have a broadly positive impact on major U.S. lenders. Below, we highlight funds for investors to increase exposure to the U.S. financial sector. These funds have performed better than the SPDR S&P 500 ETF SPY over the past year, which has gained 13.41% but have underperformed over the past month, when SPY has added 6.28%. Financial Select Sector SPDR Fund seeks to track the performance of the Financial Select Sector Index with a basket of 73 securities. The fund has amassed an asset base of $48.29 billion and charges an annual fee of 0.08%. XLF has Zacks ETF Rank #1 (Strong Buy) and has a dividend yield of 1.41%. The fund has a one-month average trading volume of about 35.98 million shares. Financial Select Sector SPDR Fund has gained 4.42% over the past month and 24.23% over the past year. Vanguard Financials ETF seeks to track the performance of the MSCI US Investable Market Index (IMI)/Financials 25/50 with a basket of 416 securities. The fund has amassed an asset base of $12.33 billion and charges an annual fee of 0.09%. VFH has Zacks ETF Rank #2 (Buy) and has a dividend yield of 1.74%. The fund has a one-month average trading volume of about 418,000 shares. Vanguard Financials ETF has gained 5.20% over the past month and 24.12% over the past year. iShares U.S. Financials ETF seeks to track the performance of the Russell 1000 Financials 40 Act 15/22.5 Daily Capped Index, with a basket of 136 securities. The fund has amassed an asset base of $3.52 billion and charges an annual fee of 0.39%. IYF has Zacks ETF Rank #2 and has a dividend yield of 1.32%. The fund has a one-month average trading volume of about 361,000 shares. iShares U.S. Financials ETF has gained 5.05% over the past month and 23.72% over the past year. Fidelity MSCI Financials Index ETF seeks to track the performance of the MSCI USA IMI Financials 25/50 Index, with a basket of 403 securities. The fund has amassed an asset base of $2.23 billion and charges an annual fee of 0.08%. FNCL has a Zacks ETF Rank #2 and a dividend yield of 1.53%. The fund has a one-month average trading volume of about 98,000 shares. Fidelity MSCI Financials Index ETF has gained 5.21% over the past month and 24.17% over the past year. First Trust Financials AlphaDEX Fund seeks to track the performance of the StrataQuant Financials Index is a modified equal-dollar weighted index, with a basket of 102 securities. The fund has amassed an asset base of $2.1 billion and charges an annual fee of 0.61%. FXO has a Zacks ETF Rank #2 and has a dividend yield of 2.12%. The fund has a one-month average trading volume of about 64,000 shares. First Trust Financials AlphaDEX Fund has gained 5.95% over the past month and 17.50% over the past year. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Goldman Sachs Group, Inc. (GS) : Free Stock Analysis Report JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report Morgan Stanley (MS) : Free Stock Analysis Report SPDR S&P 500 ETF (SPY): ETF Research Reports Financial Select Sector SPDR ETF (XLF): ETF Research Reports Fidelity MSCI Financials Index ETF (FNCL): ETF Research Reports Vanguard Financials ETF (VFH): ETF Research Reports First Trust Financials AlphaDEX ETF (FXO): ETF Research Reports iShares U.S. Financials ETF (IYF): ETF Research Reports This article originally published on Zacks Investment Research ( Zacks Investment Research
