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!

5 Bank Takeout Targets, Up to 26% Upside: KBW

Stocks in this article: C BBT MTB CMA USB GE FITB HCBK TD YAVI FFIC SNV UCBI MCBI

According to Penala, the "most logical buyer" for GE's private label card portfolio could be Citigroup. "At a 5% premium, a deal for the GE portfolio would be 10% accretive to EPS, and we estimate that C could rebuild Basel 3 capital back to 9.9% by 4Q13," Penala wrote. Then again, the analyst added that Citigroup "is highly sensitive to creating new intangibles, and we think it is unlikely C would bid a significant premium -- if any."

Potential Buyers

KBW analyst Frank Barlow in a note to clients on Tuesday said that banking industry M&A volume is "disappointing given the increased chatter about M&A we heard about at our February bank conference."


Based on comments from executives during earnings conference calls, while leaving out neutral on-the-fence comments, "larger buyers appear more hesitant about M&A than their smaller counterparts," according to Barlow. "The median buyer with negative commentary is $10.5B in size versus $5.3B for those with positive commentary (excluding the large regionals)," he wrote.

KBW maintains lists of potential buyers and sellers among regional banks. The firm on Tuesday updated the potential buyers list to include five large regional banks, although the three that discussed potential deals during their conference calls "were negative about their near-term M&A prospects," according to Barlow. The five large regional banks now on KBW's list of potential buyers include Comerica (CMA) of Dallas, Fifth Third Bancorp (FITB) of Cincinnati, M&T Bank (MTB) of Buffalo, N.Y., U.S. Bancorp (USB) of Minneapolis and BB&T (BBT) of Winston-Salem, N.C.

Following the completion of the Federal Reserve's stress tests in March, the regulator announced that BB&T would be required to file a revised 2013 capital plan by the end of the third quarter, since its original plan was rejected "based on "a qualitative assessment."


M&T is working to complete its pending acquisition of Hudson City Bancorp (HCBK), which was announced last August. M&T announced in April that the Federal Reserve had "identified certain regulatory concerns with M&T's procedures, systems and processes relating to M&T's Bank Secrecy Act and anti-money-laundering compliance program," which would delay approval of the Hudson City deal. M&T and Hudson City extended "the date after which either party may elect to terminate the merger agreement if the merger has not yet been completed," to Jan. 31, 2014, but the two companies also said there were "no assurances" the deal would be completed. Shareholders of both companies approved the merger.

2 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

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.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
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 17,778.15 +421.28 2.43%
S&P 500 2,061.23 +48.34 2.40%
NASDAQ 4,748.3960 +104.0840 2.24%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

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