Managing Director Matthew Kelley and Senior Research Analyst Matthew Breese of Sterne Agee & Leach, Inc., Interview with The Wall Street Transcript: More M&A Activity in Northeastern Banking

Wall Street Transcript

67 WALL STREET, New York - June 28, 2013 - The Wall Street Transcript has just published its U.S. Banking Review 2013 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 and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: U.S. Banking Review 2013

Companies include: Bryn Mawr Bank Corp. (BMTC), Center Bancorp Inc. (CNBC), Berkshire Hills Bancorp Inc. (BHLB), Eagle Bancorp, Inc. (EGBN), Provident New York Bancorp (PBNY), Investors Bancorp Inc. (ISBC), Susquehanna Bancshares, Inc. (SUSQ), Signature Bank (SBNY), First Niagara Financial Group (FNFG), Fulton Financial Corp. (FULT), Fox Chase Bancorp, Inc. (FXCB), TFS Financial Corp (TFSL), Oritani Financial Corp. (ORIT), National Penn Bancshares Inc. (NPBC) and many more.

In the following excerpt from the U.S. Banking Review 2013 Report, an expert analyst discusses the outlook for the sector for investors:

TWST: M&A has been fairly quiet, as I understand. Are you expecting that to change? You mentioned both acquirers and then potential acquirees.

Mr. Kelley: Actually, compared to national averages, we're seeing a lot more M&A activity throughout the Northeast corridor, and we think in the year ahead, the Northeast once again will see a higher level of M&A activity than other parts of the country. I think a couple of factors are driving that. Number one, again, you have a little bit stronger regional economy, particularly in New England. Number two, you have a long list of companies that either have a very strong currency advantage over their peers, or they have a lot of capital and liquidity in their balance sheets that they need to put to work.

And then you have some activism. Those are three pretty unique characteristics to the Northeast region, and we think they will drive more M&A activity in 2013. The one thing we would note is that we think it's going to be more smaller institutions that elect to sell in the year ahead. We don't think we're going to see a lot of large-scale M&A where sellers north of $5 billion in total assets are exiting public life.

TWST: What are some of the names you like on the buy side of that trade?

Mr. Breese: A couple of our favorite buyers are Bryn Mawr Bank Corp. (BMTC) and Center Bancorp (CNBC). Bryn Mawr fits into that best-of-breed camp. Close to 45% of their revenues are actually in the way of wealth management, trust business and, to a lesser extent, mortgage banking. This is compared to many of our other names that rely solely on spread income.

Bryn Mawr has a large portion of revenue coming from noninterest, fee-generating businesses, and they have a healthy currency. We think they're going to go out there and be on the hunt for smaller institutions. In the Philadelphia region especially, we think...

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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