Analysts Calling Wachovia Deal Good -- for Competitors

Looking to play the First Union (FTU Quote)-Wachovia (WB Quote) deal? Check out regional competitors, starting with BB&T (BBT Quote) and SunTrust (STI Quote), analysts say.

The proposed $13 billion deal between North Carolina powerhouses Monday had analysts scratching their heads and talking up competing banks. While First Union CEO Ken Thompson has shown a commitment to undoing the acquisition-driven damage done by his oft-criticized predecessor, Edward Crutchfield, analysts say the Wachovia deal risks reviving the very demons Thompson sought to drive out: clashing cultures and out-of-control costs. Specifically, observers wonder how First Union's aggressive, acquisitive business style will meld with the conservative one at Wachovia, longtime banker to Tobaccoville. Others worry that growth numbers won't add up. Those factors could add up to opportunity for more focused regional names, analysts say. First Union shares slipped Monday while Wachovia's crept ahead, on a mixed day for bank stocks.

Manna a Manna

Robinson Humphrey banks analyst Christopher Marinac called the marriage "manna from heaven" for the smaller regional players, saying rivals like Atlanta-based SunTrust should get a boost should the task of completing the deal distract First Union and Wachovia. Prudential banks analyst Mike Mayo downgraded First Union to hold from strong buy, saying the timing is "early for FTU" and noting the cultural risk. ...