) --

Keefe, Bruyette & Woods


, a boutique investment bank that specializes in financial services firms, is making changes to three of its bank-related indexes.

KBW said after the market closed on Tuesday that it was replacing

Marshall & Ilsley

( MI), currently listed in its KBW Bank Index, with

New York Community Bancorp

( NYB). The KBW Bank Index, or more commonly referred to as the "BKX," tracks the largest 24 commercial banks in the U.S.

The BKX has seen strong gains in the past week, primarily due to renewed merger talk with U.S. commercial banks as well as a general sense that regional banks are looking to get out from underneath the government's TARP shackles. The index is up 3.8% since Dec. 15. M&A speculation has abounded in the bank sector for some time now, particularly as banks continue to suffer from credit headwinds, revenue challenges and a tough regulatory environment going forward.

M&I agreed last week to be acquired by

Bank of Montreal's

(BMO) - Get Report

U.S. division, Harris Bank.

Speculation that

PNC Financial Services

(PNC) - Get Report

was sniffing around at

Regions Financial

(RF) - Get Report


BankAtlantic Bancorp

(BBX) - Get Report

also buoyed bank stocks last week.

On Tuesday,

TD Bank

(TD) - Get Report

said it would acquire

Chrysler Financial

for more than $6 billion.

New York Community is being removed from the KBW Mortgage Finance Index, and replaced by

Old Republic International

(ORI) - Get Report

, KBW said.

KBW is also increasing the shares of

First Niagara Financial



Huntington Bancshares

(HBAN) - Get Report

-- both part of the BKX -- and

Wintrust Financial

(WTFC) - Get Report

, listed under the KBW Regional Banking Index.

First Niagara is getting a greater share due to its recent acquisition of New Alliance. Huntington Bank and Wintrust are being increased due to their recent equity offerings in order to repay TARP.

The changes will be effective before markets open for business on Monday, December 27, 2010.

-- Written by Laurie Kulikowski in New York.

To contact the writer of this article, click here:

Laurie Kulikowski


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