Investors Bancorp (ISBC) today reported first-quarter earnings of $0.31 per share . . . $0.03 better than expectations. Great news.

However, the more important headline here is that the bank agreed to be acquired by Citizens Financial (CFG) in a cash-and-stock deal that values ISBC at $3.5 billion, or about $14.16 per share as I write this.

I suspect we aren’t alone in being disappointed that the buyout doesn’t rate a bigger premium. ISNC is up only 8% on the announcement, revealing some vulnerability around the CFG stock component.

While I still need to do some analysis on CFG, my initial inclination is to continue to hold ISBC. Citizens Financial is cheap at 10X next year’s EPS and I believe regional banks can rally big once the current COVID fears decline and long-term interest rates rally.

Hold ISBC for now. I will have my final decision on what to do next shortly.