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While bears and profit-takers were controlling the broad markets this morning, Friday's collapse of two Irwin Union Bank subsidiaries were the big news today in the financial sector as the FDIC and First Financial Bancorp (FFBC) came to the rescue over the weekend. Also on the bullish side of today's trading; Nektar Therapeutics (NKTR) announced a $1.12 billion drug licensing deal with AstraZeneca this morning and Brooks Automation (BRKS) got a significant upgrade from research house Stifel Nicolaus.
Gaining 19.13% ($1.59) today on the heels of its weekend bailout of a collapsing competitor, First Financial Bancorp (FFBC) http://www.ffbc-oh.com/ set a new market cap this morning of $495 million. FFBC is currently trading in the $9.65 range on the Nsadaq. FFBC has a 3-Month average daily trading volume of 252,012 shares and it doubled that volume today within the first hour of trading.
FFBC and the FDIC put together a deal late Friday to rescue two Irwin Union Bank subsidiaries in Kentucky and Indiana that were being closed by banking regulators. The FDIC said Irwin Union Bank and Trust Co. in Indiana had $2.7 billion in assets, $2.1 billion in deposits as of August 31, and Irwin Union Bank F.S.B. in Kentucky had $493 million in assets and $441 million in deposits as of August 31.
That brings the total number of U.S. bank failures this year to 94.
FFBC CEO Claude E. Davis will host a conference call and webcast today to discuss the acquisitions. Details for this event are on the FFBC web site.
... what FFBC gets ...
The Indiana Department of Financial Institutions and the Office of Thrift Supervision declared Irwin closed Friday and appointed the FDIC as receiver. In total, FFBC has acquired 27 banking centers located in nine states. The deal also includes approximately $3.2 billion in assets and approximately $2.5 billion in deposits. The deposits are being assumed at a premium of less than 1%. The loan portfolios were purchased under modified offerings by the FDIC whereby all non-performing assets, other real estate owned; acquisition, development and construction loans; and residential and commercial land loans were excluded from the purchased portfolio. All performing loans were purchased at a discount of approximately 25% and are covered by FDIC loss share agreements with a loss share threshold of an aggregate $636 million. Approximately $2.5 billion in assets are covered under these loss share agreements. Generally, losses up to $636 million are covered by the FDIC at 80% and losses beyond the threshold are covered by the FDIC at 95%.
FFBC is a Cincinnati, Ohio based bank holding company. On June 30, 2009, FFBC had $3.8 billion in assets, including $2.9 billion in loans and $2.8 billion in deposits. Before this weekend's acquisition of Irwin, FFBC operated 131 banking centers. Its primary operations are located within the tri-state region of Ohio, Kentucky and Indiana.
At $9.65, FFBC is below its 52-week high of $15 set on 10-03-08 and is above its 52-week low of $5.07 set on 03-09-09. At $9.65, FFBC is ahead of both its 50-day and 200-day moving averages. FFBC has trailing twelve month revenues of $142 million and a trailing twelve month diluted EPS of $0.35. FFBC is widely held by institutions. Its shares out versus float ratio is near-parity.
Setting a new 52-week high this morning and gaining 10.28% ($0.87) is Nektar Therapeutics (NKTR) http://www.nektar.com/ currently trading in the $9.33 range on the Nasdaq. NKTR has a new market cap of $863 million. NKTR has a 3-Month average daily trading volume of 826,720 shares and it easily topped that within two hours of the open.
NKTR announced this morning that it licensed a pair of experimental pain treatments to AstraZeneca PLC in a deal valued at about $1.12 billion. AstraZeneca will pay NKTR $125 million upfront for the rights to two drugs: NKTR-118, an oral product intended to treat constipation caused by opioid pain drugs, and NKTR-119, which is intended to combine NKTR-118 with opioid pain drugs to create a painkiller that doesn't cause constipation.
REGULATION
London-based AstraZeneca will handle further development of the drugs, including the start of late-stage clinical trials for NKTR-118, as well as manufacturing and marketing. It expects to file for regulatory approval in 2013. NKTR-119 is in early-stage development. NKTR could receive up to $235 million in payments if the constipation drug NKTR-118 advances through regulatory review and another $375 million if it reaches projected sales goals. NKTR could also receive $75 million in development payments for NKTR-119, and $310 million in sales milestone payments, according to a filing with the Securities and Exchange Commission. If the drugs are approved, NKTR will receive royalty payments of at least 10% on each.
NKTR will host a conference call today to further explain the deal to shareholders and analysts. Details for this event can be found at the Company's web site.
NKTR is a biopharma company utilizing PEGylation Technology, a multi-platform collection of therapies. NKTR technologies are used in 10 approved products; 3 partner programs that have been filed for with the FDA; and 12 development programs in human clinical trials. NKTR has numerous proprietary and partnered products in Phase I, II, and III clinical trails in the U.K. and the U.S.
At $9.33, NKTR beat its previous 52-week high of $8.61 set on 09-11-09 and is far above its 52-week low of $2.45 set on 10-10-08. At $9.33, NKTR is ahead of both its 50-day and 200-day moving averages. NKTR has trailing twelve month revenues of $72 million. NKTR is widely held by institutions. Its shares out versus float ratio is near-parity.
Gaining 9.85% ($0.72) this morning is S&P SmallCap 600 company Brooks Automation (BRKS) http://www.brooks.com/ trading in the $8.03 range on the Nasdaq. BRKS has a new market cap of $518 million. BRKS has a 3-Month average daily trading volume of 255,815 shares and it surpassed that volume today two hours into the session.
BRKS got a significant upgrade today from 'Hold' to outright 'Buy' from prestigious research house Stifel Nicolaus. While BRKS has had some tough quarters during the recession, analysts seem to love this Company. In August, another prestigious research house, Caris & Company upgraded BRKS from 'Average' to 'Above Average' and that endorsement sent the stock higher.
BRKS provides automation, and vacuum and instrumentation solutions primarily to the semiconductor manufacturing industry worldwide. It operates in three segments: Automation Systems, Critical Components, and Global Customer Operations. BRKS also serves customers in data storage, advanced display, analytical instruments, and solar markets.
At $8.03, BRKS is below its 52-week high of $11.30 set on 09-19-08 and is above its 52-week low of $2.52 set on 11-21-08. At $8.03, BRKS is ahead of both its 50-day and 200-day moving averages. BRKS has trailing twelve month revenues of $261 million. BRKS is widely held by institutions. Its shares out versus float ratio is near-parity.
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