The value to this stock is that every bank needs to have a presence in the Northeast since it is one of top financial markets in the country. There are only two or three options of any size. PBCT has a good franchise but need a strategic alliance or merger to unlock the value. They will not earn enough on its own to increase maximum shareholder value.
what they really need to do is pay out a special div of about $5/shr, so you get a stock price of $6.5-$7 plus the $5 cash, then cut the div to $0.30/shr. That will boost their ROE to acceptable levels, PE of 12 or so, and now it looks attractive to a buyer while you've banked that extra cash payment, and in the meantime you can get a decent +4% yield that is actually covered by earnings.
With the HCBK announcement today, I'm surprised that PBCT didn't attract any buying interest. It'll be interesting to see if there's a delayed reaction in the next few days. It doesn't appear that there's any takeover premium built into this stock, so I have to conclude that there's absolutely no expectation of any combination in the foreseeable future.
Quote from CEO Robert G. Wilmers of M & T bank in todays Buffalo News "Connecticut is a new but very desirable market." "We've done some business in connecticut, and we think we can continue to grow there."