Today's Financial Stock Winners and Losers
Bank of New York will sell its retail and regional middle-market businesses to J.P. Morgan for $3.1 billion with a premium of $2.3 billion, while J.P. Morgan will sell its corporate trust business to Bank of New York for $2.8 billion with a premium of $2.15 billion. The difference in premiums results in a net cash payment of $150 million to Bank of New York. There is also a contingent payment of up to $50 million to Bank of New York tied to customer retention.
Shares of Bank of New York were down $1.45, or 3.9%, to $35.38. J.P. Morgan was adding 49 cents, or 1.2%, to $42.19.
United Bankshares (UBSI) has sold low-yielding investment securities and used the sale proceeds to repay higher-cost debt. The company prepaid a $50 million variable interest rate Federal Home Loan Bank advance and terminated a fixed interest rate swap associated with the advance. United recognized a $3.1 million pretax gain on the termination of the swap, and no prepayment penalty was incurred on the early repayment of the advance.Additionally, United sold around $86 million of impaired low-yielding fixed-rate investment securities. United recorded a loss of roughly $2.9 million in the first quarter related to the impairment. The effect on net income and earnings was minimal in the first quarter. United's shares were up 33 cents, to 0.9%, to $37.40. Community Bank System (CBU) was losing 51 cents, or 2.4%, to $21.21 after FTN Midwest downgraded the company's shares to sell from neutral. CIBC World Markets upgraded BB&T (BBT), SunTrust (STI) and AmSouth Bancorp (ASO) to sector perform from sector underperform, lifting all of the companies' shares. SunTrust was up $1.07, or 1.5%, to $74.03, and BB&T was rising 83 cents, or 2.1%, to $40.44. AmSouth was higher by 56 cents, or 2.1%, to $27.63. Commerce Bancorp (CBH) was gaining 35 cents, or 0.9%, to $38.62 after CIBC raised its price target on the company's shares. CIBC lifted its target to $43 a share from $35 previously. The firm said it believes investors are focusing on Commerce Bancorp's long-term growth possibilities.
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