Smaller Banks Ripe for the Buying

Schultz says the conservative money that is looking for the strong bank with the weak valuation will "pay off, just not very big."

Morgan Keegan Senior Bank Analyst Bob Patten in July told TheStreet.com that banks in poor housing markets like Florida could bounce back in a few years. But M&A would remain challenging until potential buyers were more comfortable with the credit market, he added.

" The simple fact is if you're having a hard time figuring out what your problems are on your own balance sheet, why would you want to buy somebody else's?" he asked.