Some say the wave of bank consolidation seen in the last two decades is over, but an outspoken analyst who developed a formula for identifying banks that could be takeover targets on Thursday listed 17 he says are ripe, including Chicago-based MB Financial.
Richard Bove of Rochdale Securities screened 62 banks that have more than $10 billion in assets.
From that list, he selected banks selling at less than 10 percent their asset base, and then he chose those likely to meet new capital requirements — meaning they have reserves plus common equity of greater than 10 percent of assets.
Bove also looked for companies with high liquidity and a low level of non-performing assets, or past-due loans that are likely to be written off.
Finally, Bove said, he eliminated some that were too large and found 17 banks he thinks are vulnerable to takeover.
Bove’s mentions helped boost most of those banks’ stocks on a day the broader markets were also in positive territory.
On the list are three banks based in the northeast — Webster Financial Corp., Susquehanna Bancshares Inc. and Wilmington Trust Corp.
Shares of Webster — based in Waterbury, Conn., with about 180 branches in Connecticut, Massachusetts, Rhode Island and New York — gained 31 cents, or 2 percent, to $16.97 in midday trading.
Shares of Susquehanna, a 220-branch bank based in Lititz, Pa., added 35 cents, or 4 percent, to $9.10.
Shares of Wilmington Trust, a Wilmington, Del.-based institution that focuses on wealth advisory services and has offices in 14 states along with overseas affiliates, rose 16 cents, to $9.21.
The banks Bove identified in the southeast have the biggest names. They include credit card specialist Capital One Financial Corp., SunTrust Banks, Regions Financial Corp. and the smaller First Horizon National Corp.
Shares of Capital One, based in McLean, Va., rose 82 cents, or 2.1 percent, to $39.90.
Shares of Atlanta-based SunTrust, which has 1,675 branches throughout the Southeast, gained among the most, rising 83 cents, or 3.5 percent, to $24.91.
Shares of Regions Financial, based in Birmingham, Ala. and with 1,800 branches stretching from Florida to Illinois, edged up 12 cents to $7.
Shares of First Horizon National, a 185-branch bank based in Memphis, Tenn., rose 36 cents, or 3.4 percent, to $10.94.
Some well known names also appear in Bove’s list of midwest-based targets, including KeyCorp, Fifth Third Bancorp and Marshall & Ilsley Corp. Smaller names in this group are MB Financial Inc. and Citizens Republic Bancorp Inc.
Shares of Cleveland-based Keycorp, which has over 1,000 branches in 14 states, added 36 cents, or 3.3 percent, to $8.24.
Fifth Third, a Cincinnati-based bank with about 1,300 branches in the Midwest and Southeast, jumped 45 cents, or 3.9 percent, to $12.06.
Milwaukee’s Marshall & Ilsley, which has a scattered network stretching from Wisconsin to Arizona to Florida, added 31 cents, or 4.5 percent, to $7.16.
MB Financial, which has about 90 branches, edged up 17 cents to $16.60. Citizens Bancorp, a 230-branch bank based in Flint, Mich., was flat at 79 cents.
In the Southwest, Bove eyed three smaller institutions, BancorpSouth Inc., Whitney Holding Corp. and International Bancshares Corp.
BancorpSouth, a Tupelo, Miss.-based bank with 310 offices stretching south and west to Texas, gained 22 cents to $13.96.
Whitney Holding, a New Orleans company that operates in the five-state Gulf Coast region, added 20 cents, or 2.4 percent, to $8.43.
International Bancshares, based in Laredo, Texas, and with about 280 banking offices, rose 39 cents, or 2.4 percent, to $16.50.
Finally, Bove named two banks based in the western states, Zions Bancorporation and Cathay General Bancorp.
Salt Lake City-based Zions, which has close to 500 branches in nine states, added 70 cents, or 3.5 percent, to $20.49.
Cathay General, a Los Angeles-based commercial bank, was the biggest gainer in the western group, adding 62 cents, or 6.2 percent, to $10.68.
