Boston, MA, 03/19/2014 – Yadkin Financial Corporation (NASDAQ:YDKN) may be setting up an acquisition target. The bank holding company is said to be targeting a regional bank with strong financial results.
The acquisition target:
It is said that Yadkin Financial Corporation (NASDAQ:YDKN) and VantageSouth Bancshares, Inc. (NYSEMKT:VSB) are looking at a deep partnership, maybe an acquisition or a merger. Banks and financial institutions have seen some very difficult times and understand that the key to inorganic growth is only through mergers and acquisitions. Yadkin has already prepared a war chest of $299 million to fund the purchase. Once the deal is approved, the combined entity will have assets of $4 billion, making it the largest community bank in North Carolina. There are other compelling reasons apart from this. The combined entity will be able to expand the customer network and also provide a better return to shareholders.
In fact, VantageSouth has also used the merger and acquisition route in the past. It acquired East Carolina Bank about one year back. The results are now reflecting in its improved financial results. The company got advantage of the portfolio of higher interest and non-interest income post the merger.
Disagreement in the Board:
However, not everyone is on board at Yadkin Financial Corporation (NASDAQ:YDKN)’s board. One member, James Smoak, has resigned from the board on account of his differences. He does not subscribe to the growth strategy and feels that the merger may not give expected results. He has since resigned from the board and is also liquidating his holdings. VantageSouth Bancshares was also in news recently after it used proceeds from the acquisition to pay off federal government monies that it owed under the Troubled Asset Relief Program (TARP)’s Capital Purchase Program. The program was established in 2008 to restore bank stability. VantageSouth is said to have paid a total of $42.8 million to the federal government.
Investors and analysts seem to be supporting the merger.