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Quote of the Day
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“No loss should be more regrettable to us than losing our time, for it’s irretrievable”
- Zeno
The Big Idea
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🤝 Banking’s Newest Couple
The West’s Sweetheart Couple: Banc of California agreed to buy PacWest Bancorp in a move to further shore themselves up following a regional banking crisis earlier this year.
While the value of the tie-up isn’t huge by M&A standards, at just over $1B, it is a major milestone for a banking sector that was in turmoil earlier in the year and still faces questions about its health
The deal didn’t require an assist from the federal government, which had stepped in to rescue other banks and broker sales earlier this year
Consideration: In the all-stock transaction, PacWest stockholders will receive 0.6569 of a Banc of California share for each share they own, or about $9.60 based on Banc of California’s closing price Tuesday. That is a roughly 25% premium to PacWest’s $7.69 closing price Tuesday.
Source: Wall Street Journal
Daily Scoop
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📈 Fed Set to Raise Rates
July’s FOMC Meeting Preview: Federal Reserve policymakers are poised to hike interest rates to the highest level in 22 years, while retaining a tightening bias that signals the possibility of an additional move later in the year.
Market Expectations: The Federal Open Market Committee is expected to raise rates a quarter point to the 5.25% to 5.5% range, an 11th increase since early 2022. It will release the decision at 2 p.m. in Washington. Chair Jerome Powell will hold a press conference 30 minutes later.
Source: Bloomberg
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🏦 Wells Approves Share Buyback Program
Shareholder Announcement: Wells Fargo said on Tuesday its board had authorized a new share buyback program of up to $30B. The bank's shares rose 1% in extended trading after earlier jumping almost 4% after the announcement.
Wells Fargo announced the buybacks days after it reported a 57% jump in profit in the second quarter, which was lifted by customer interest payments
The lender and rival U.S. banking giants raised their third-quarter dividends after sailing through the Federal Reserve's annual health check, which showed they have enough capital to weather a severe economic downturn
Source: Reuters
Market Movement (YTD)
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