Just last week, Atlanta-based Omni National Bank was closed by the Office of the Comptroller of the Currency. SunTrust acquired Omni's $400 million in insured deposits from the FDIC and six branches located across the country.
It's also possible that regulators will force more mergers of equals among the large regional banks if the outcomes of the stress tests are negative, says Paul Miller, an analyst at Friedman, Billings, Ramsey, who covers large and mid-cap banking companies.
Miller says that most of the companies that he covers are "very weak" on capital.
He wrote in a recent note that investors should avoid purchasing shares of PNC until the Pittsburgh-based company can rebuild its capital levels."PNC's credit quality is better than that of its peers. It will be a survivor, but its future capital structure is nearly impossible to predict," Miller wrote. "Given the significant risk of dilution, we would avoid the shares until the company is better capitalized and its ability to build capital through earnings is stronger." Regional banks aside for a moment, there are other financial firms that could throw their hats in the mix to make an acquisition. After the Lehman Brothers failure and BofA-Merrill Lynch merger agreement last fall, the remaining two securities firms, Morgan Stanley (MS) and Goldman Sachs (GS), became bank holding companies. Morgan Stanley has openly said it is looking for ways to build its deposit base, inferring that it is interested in buying a bank.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV