F.N.B. Corp (FNB), BCSB Bancorp Inc (BCSB): Why This Company Looks Poised to Continue Growing

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F.N.B. Corporation’s Ongoing Expansion Plans

While its deal with BCSB will produce considerable synergies and improve its position in the competitive Baltimore market, this transaction is a relatively small part of F.N.B.’s overarching growth strategy. Over the past several years, the company has acquired banking properties in the Baltimore, Pittsburgh and Cleveland metropolitan areas. In addition to its recent acquisition of Maryland’s BankAnnapolis, the company also picked up Ohio-based Federal Savings Bank and a Pittsburgh-area bank known as Parkvale Financial. Collectively, these deals have added tens of millions of dollars to its top-line revenues and provided it with access to thousands of new customers.

Can Investors Profit?

For F.N.B., this deal offers synergies, revenue support and market expansion. Most pertinently, it builds on the company’s recent foray into the Baltimore area and may permit F.N.B. Corp (NYSE:FNB) to merge some of the assets of BCSB Bancorp Inc (NASDAQ:BCSB) and BankAnnapolis. It also allows F.N.B. to reduce its exposure to economically weak cities in northeastern Ohio and western Pennsylvania.

For investors, this situation offers a significant arbitrage premium and a juicy dividend yield of nearly 4.5 percent. It also provides investors with a legitimate chance to profit from F.N.B.’s future successes. Given the firm’s aggressive approach to growth, it seems likely that more acquisitions are in the cards. However, investors who wish to play this deal with a long position in BCSB should be aware of its potential risks. As always, it is crucial that interested investors investigate the legal issues that surround this deal before pulling the trigger.

The article Why This Company Looks Poised to Continue Growing originally appeared on Fool.com and is written by Mike Thiessen.

Mike Thiessen has no position in any stocks mentioned. The Motley Fool owns shares of Huntington Bancshares (NASDAQ:HBAN). Mike is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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