This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Regional Banks May Soon Be Buyers

Stocks in this article: STI RF BBT

Don't be surprised to see large regional banks making acquisitions in the banking sector this year, as healthier banks are pushed to scoop up weaker competitors.

The federal government is expected to complete stress tests on the 19 banks with at least $100 billion in assets later this month. Some banks are expected to receive new cash infusions from the government or private sources after the tests, much of which will be needed to cushion the companies against rising losses. But analysts and observers also believe this recapitalization effort may be a pre-emptive move encouraged by regulators to position some banks to make acquisitions, as weaker competitors go under.

Large regional banks such as BB&T (BBT - Get Report) , SunTrust (STI - Get Report), KeyCorp (KEY), US Bancorp (USB - Get Report) and other banks with market caps between $2 billion and $20 billion are the "logical consolidators," says Robert Patten, an analyst at Morgan Keegan.

"While these banks may not need the capital because of credit, our view is that the regulators may need these banks to take the capital in order to take care of the consolidation, which must happen," Patten says. " T hose consolidators will likely get flushed with capital -- whether they want it or not."

Large banks currently have their hands full digesting recent acquisitions that for the most part were either forced, federally assisted or both.

The other problem is that several large banks are coming dangerously close to hitting the national 10% deposit market share limit, which will make it hard for the companies to acquire any significant-sized bank holding company.

1 of 5

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,672.60 -141.38 -0.79%
S&P 500 2,051.82 -11.33 -0.55%
NASDAQ 4,757.8790 +7.4820 0.16%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs