Regional Banking Equity Analysis Interview: Richard D. Weiss of Janney Montgomery Scott Sees Slow-and-Steady Growth for Northeastern & Mid-Atlantic Banks

Wall Street Transcript

67 WALL STREET, New York - November 30, 2012 - The Wall Street Transcript has just published its 2012 Regional Banking Equity Analysis 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: Investing in Regional Banks

Companies include: People's (PBCT), Hudson City (HCBK), First Niagara (FNFG), and many others.

In the following excerpt from the 2012 Regional Banking Equity Analysis Report, an expert analyst discusses the outlook for the sector for investors:

TWST: What are some of the key things you're tracking as you look at your space?

Mr. Weiss: We are always looking at the credit situation, and I believe that credit has been getting better across the board. The one sticking point has been exposure to construction lending for some. We're trying to see if that improves; that's been slow. The next one is the regulatory environment, how banks are coping with the new rules that are going to be coming on from Dodd-Frank and the new Consumer Finance Protection Board, the Durbin Amendment, things of that nature. The flatter yield curve would be one. And the last one we would keep an eye out for is potential for a revitalized M&A market.

TWST: Starting with that one, when we spoke a year ago, you said M&A could be the dominant feature on the banking landscape in the next few years. Would you give us an update on what you've seen and your expectations for deal flows going forward?

Mr. Weiss: I'm glad you said within the next few years rather than held me to one year. I am surprised that it's taking longer to get into gear. There are still many reasons why there should be deals: there are far too many banks that are very small and could be too small to succeed. So there are reasons to sell. However, at this time, the reasons for not selling include the volatility in the market; still lingering credit issues, perhaps; the new rules that are coming still haven't defined what capital requirements will be. I think it makes it very difficult to structure a deal if you don't know how much capital is needed at the end of it. There's probably a disparity between what sellers would like to get, what buyers would like to pay. And finally, last but not least, is the issue of executive compensation. I think on the executive front, they might not be motivated to sell because they're doing OK remaining independent, personally.

TWST: Any sense of what it will take to maybe get this "wave of deals" that so many people are talking about and expecting to start happening?

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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