67 WALL STREET, New York - March 7, 2013 - The Wall Street Transcript has just published its Pacific and Southwest 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 and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Heightened M&A Activity - Regulatory Obstacles and Fee Income Replacement - Interest Rates and Loan-Growth Strategies - Pockets of Growth in Western Banking - Regulatory Outlook Gains Clarity
Companies include: Pacific Continental Corp. (PCBK), Sterling Financial Corp. (STSA), Heritage Financial Corp. (HFWA) and many more.
In the following excerpt from the Pacific and Southwest Banks Report, an expert analyst discusses the outlook for the sector for investors:
TWST: What are your favorite stocks right now and why?
Ms. Chimera: Right now I am a fan of the banks that are able to get creative - that are able to look at what they have to work with and are looking to think outside of the box. I think that banks that are open to M&A, that are open to acquisitions, are the ones that stand to benefit the most, assuming that pricing remains rational.
Looking to a company like Pacific Continental (PCBK), it's looking to develop its capital ratios, it's looking to deploy its capital in any means that it can. It's increasing its dividend, it's doing special dividends, it recently completed an acquisition, it's also doing buybacks. The bank is really working to right size its capital levels and to grow its asset base so that it can be more profitable in the future.
I also think that banks that are open to contingencies within the M&A that they are looking at are going to be some of the winners within this cycle. We've seen different banks like Sterling (STSA), Heritage Financial (HFWA) and Washington Federal (WAFD) do deals that have had contingent payouts that are based on how the deal performs.
In M&A there is still a gap between the buyers and the sellers and what the buyers are willing to pay and what the sellers think they are worth. When you introduce contingencies based on performance into your M&A discussions, you are able to find a common ground, where the buyer can say, "I'm only going to pay this, but if what you say is accurate then I'll pay you this." In my opinion, I think sellers are more willing to work with that because then they feel like they are getting a better deal out of it.
TWST: Are there any names you are particularly cautious about?
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.