- Loan growth will likely suffer from the pandemic. However, the overall loan growth will likely be positive because of the residential mortgage market and the acquisition of bank branches.
- The provision expense will likely remain low because of subdued loan growth and limited credit risk.
- The margin will likely decline as higher-yielding loans are replaced by new loans originated at lower rates. Maturing deposits and the acquisition of Berkshire’s branches will limit the margin compression.
- The potential price upside and the forward dividend yield combine to imply an attractive total expected return.
For further details see:
Investors Bancorp: Acquisition, Low Credit Cost To Drive Earnings Growth