Community Bank To Acquire Northeast Retirement Services

Community Bank System, Inc. (NYSE:CBU) has inked a deal to acquire Northeast Retirement Services, Inc. (NRS). The deal is subject to regulatory approval and is expected to close in the first quarter of 2017.

Once the deal is closed, Northeast Retirement Services, which provides plan accounting, transfer agency, fund administration, trust and retirement plan services, will operate as a subsidiary of Benefit Plans Administrative Services, Inc., a wholly-owned subsidiary of Community Bank.

Moreover, this will lead to the creation of an organization with over $80 million in annual revenue, over $50 billion in trust assets and 3,800 retirement and other employee benefit plan administration clients throughout the United States and Puerto Rico.

The transaction is valued at $140 million and will be settled both in cash and stock. Per the terms of the deal, shareholders of NRS will be paid $70 million in cash and the remaining in shares of Community Bank.

Excluding acquisition-related expenses, the transaction is likely to be accretive by 4 cents to Community Bank’s GAAP earnings per share (EPS) in its first full year and by 5 cents in the second year.

Moreover, the company is of the opinion that the deal should be accretive by 16 cents to its cash EPS in the first full year (excluding acquisition-related expenses) and by 17 cents in the second year.

Notably, following the announcement of the deal, shares of Community Bank increased 3.5%.

Also, shares of the company have gained 47.3% year to date, significantly outperforming the 26.7% gain of the Zacks categorized Northeast Banks industry over the same time frame.



This deal along with another one that the company announced in Oct 2016 should keep the price momentum alive.

Currently, Community Bank sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Some other stocks worth considering in the same space include First Bank (NASDAQ:FRBA) , Horizon Bancorp (NASDAQ:HBNC) and Tristate Capital Holdings, Inc. (NASDAQ:TSC) .

First Bank has witnessed an upward earnings estimate revision of 8.6% for the current year over the past 60 days, while its share price is up 58.4% in the past six months.

Horizon Bancorp has witnessed an upward earnings estimate revision of 2.7% for the current year over the past 60 days, while its share price is up 4.5% in the past six months.

Tristate Capital witnessed an upward earnings estimate revision of 5.4% for the current year over the past 60 days. Its share price has risen 58.6% in the past six months.

Confidential from Zacks

Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>

COMMNTY BK SYS (CBU): Free Stock Analysis Report

HORIZON BNCP-IN (HBNC): Free Stock Analysis Report

TRISTATE CP HLD (TSC): Free Stock Analysis Report

FIRST BK HAM NJ (FRBA): Free Stock Analysis Report

Original post