First Niagara Financial made a splash in the Connecticut market last week when it acquired NewAlliance Bank for $1.5 billion, but one analyst says it may have Webster Bank and other Northeast lenders in its cross hairs.
Mark Fitzgibbon, an analyst for the financial advisory firm Sandler O’Neill & Partners, told HBJ Today that the banking company will likely look to acquire more banks in Connecticut or the Northeast, and that Waterbury-based Webster could be a target.
Although Webster officials have given no indication that the bank is for sale, the company’s stock price jumped as high as 8 percent to 17.70 on Aug. 19 — the day the NewAlliance deal was announced.
Fitzgibbon said that could be a sign investor’s think Webster Bank could be First Niagara’s next targeted acquisition.
“More combinations are certainly feasible,” Fitzgibbon said.
In a statement Tuesday morning, Gerald Plush, Webster senior executive vice president and CFO said, “Our focus is on continuing to pursue our strategy to be the leading regional bank from Westchester County, New York to Boston.”
Even if that deal doesn’t happen, First Niagara’s acquisition is likely a signal of more M&A activity in the Northeast in the coming months, said Damon DelMonte an analyst for Keefe Bruyette & Woods in Hartford.
DelMonte said M&A activity in the region has been slow in recent years creating a lot of pent up demand. Additionally, “we are coming out of a cycle where there are numerous management teams that are fatigued,” and where many more regulatory burdens are being placed on banks, he said.
All of that could lead to more consolidation in the weeks and months ahead, DelMonte said.
