Boston and DC Bright Spots for Loan Growth: A Wall Street Transcript Interview with Damon DelMonte, a Senior Vice President Covering Regional Northeast and Mid-Atlantic Banks with Keefe, Bruyette & Woods, Inc.

Wall Street Transcript

67 WALL STREET, New York - January 8, 2014 - The Wall Street Transcript has just published its Northeast and Mid-Atlantic Banks Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Interest Rates and Loan-Growth Strategies - Regulatory Outlook Gains Clarity - Regulatory Obstacles and Fee Income Replacement - Rise of Commercial and Industrial Lending - Pockets of Growth in Northeastern Banking - Annualized Loan Growth Acceleration - Prolonged Interest Rate Environment Challenges - Midcap Market Share Gains

Companies include: Rockville Financial Inc. (RCKB), United Financial Bancorp (UBNK), People's United Financial Inc. (PBCT), Webster Financial Corp. (WBS), First Niagara Financial Group (FNFG), WSFS Financial Corp. (WSFS), M&T Bank Corp. (MTB) and many others.

In the following excerpt from the Northeast and Mid-Atlantic Banks Report, an expert analyst discusses the outlook for the sector for investors:

TWST: Tell us about your coverage universe.

Mr. DelMonte: My coverage universe spans throughout all of New England, Upstate New York and down to the Mid-Atlantic area. I'm currently covering 14 companies.

TWST: How would you characterize the industry in your universe over the last year or so?

Mr. DelMonte: The Northeast and the Mid-Atlantic, by and large, have done pretty well. Some of the themes that we look at are margin trends, loan growth opportunities and ways that banks can accelerate earnings. Something that is notable about the Northeast is that while the broader economic recovery continues to slowly gain steam, we have seen pretty decent loan growth throughout most of this region. Some markets have done better than others, but overall I think this ongoing market disruption has allowed for a market-share grab opportunity for a lot of the banks that I follow. We have seen that with decent loan growth numbers over the last year.

TWST: What's happening with margins? It has been tight for a long time?

Mr. DelMonte: Definitely. The prolonged low interest rate environment has put pressure on banks' margins. On the funding side of the equation, you really can't go much lower than where deposits are priced right now. On the asset side, you are seeing lower-rate loans coming on the books than what's running off. Legacy loans that were originated years ago with much higher interest rates are being replaced by new loans at substantially lower rates. That pressure on the margins continues.

TWST: The Northeast has seen some loan growth. Are they performing better in comparison to other areas of the country?

Mr. DelMonte: There are pockets of good lending opportunities in the Northeast. The Greater Boston area has fared quite well. A couple of the banks that I follow in that area have been producing very strong double-digit growth rates over the last year. And again, there are a lot of opportunities to take market share from larger players.

Community banks tend to offer a better service proposition than some larger institutions, and I think that has been a great opportunity for the banks to take market share...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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