) -- Investing in regional banks strong enough to buy failed banks from the

Federal Deposit Insurance Corp.

is increasingly looking like a winning strategy.

The latest example of a regional bank acquirer getting a nice share boost comes courtesy of

City National Corp.


The Los Angeles-based lender saw its stock price climb nearly 14% on Monday following Friday's acquisition of

Imperial Capital Bancorp

( IMP) from the FDIC.

City National follows the examples of

East West Bancorp

(EWBC) - Get Report



(IBKC) - Get Report

, both of which lately saw huge share price gains the first trading day after they bought failed banks from the FDIC.

Not every acquirer of a failed bank sees such an immediate payoff. Shares of

Hancock Bank


, which bought People First Community Bank Friday, were up just 1.3% as of Monday afternoon. One reason for the muted investor enthusiasm may be that the FDIC will receive a "clawback" payment from Hancock if the losses from People First's loans turn out to be more moderate than expected, according to a report from Sterne Agee & Leach.

Still, there appears to be lots of money to be made buying the carcasses of failed banks. The strategy has worked for

JPMorgan Chase

(JPM) - Get Report

in its acquisition of

Washington Mutual

(WAMUQ.PK) and

PNC Financial

(PNC) - Get Report

, which

has reaped big benefits

TheStreet Recommends

from its purchase of

National City

last year.

Even more controversial deals, such as

Wells Fargo

(WFC) - Get Report

's purchase of



Bank of America

(BAC) - Get Report

's acquisition of

Merrill Lynch

show plenty of potential for success. Some would even argue they are already a success.

Private equity investors have been getting in on the act as well. Of late their tactic has been to invest in publicly-listed regionals that they think can buy failed banks. That's what

Corsair Capital

did in November, taking a 9.9% stake in East West Bancorp. Warburg Pincus made a similar play in July, when it invested $115 million in

Webster Financial

(WBS) - Get Report


How can retail investors capitalize on this trend? A good starting point would probably be to

take a look at a list of likely acquirers from Keefe, Bruyette & Woods that we published earlier this month

. City National and Hancock were both on that list.


Written by Dan Freed in New York


Read more:

A profile of


, one of the acquisitive regional players.

A story about private equity's attempts to buy failed banks.

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