Sterne Agee Selects Top Northeastern Regional Bank Stocks for 2014: A Wall Street Transcript Interview with Matthew Kelley, Senior Research Analyst, and Matthew Breese, a Research Associate with Sterne Agee & Leach, Inc.

Wall Street Transcript

67 WALL STREET, New York - January 7, 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 - Thrift Conversion

Companies include: PNC Financial Services Group I (PNC), JPMorgan Chase & Co. (JPM), Investors Bancorp Inc. (ISBC), Beneficial Mutual Bancorp Inc. (BNCL), Meridian Interstate Bancorp, I (EBSB), TFS Financial Corp (TFSL), Sterling Financial Corp. (STSA), Rockville Financial Inc. (RCKB), United Financial Bancorp (UBNK), Beneficial Mutual Bancorp Inc. (BNCL), Merchants Bancshares Inc. (MBVT), Financial Institutions Inc. (FISI), Hampden Bancorp, Inc. (HBNK), SI Financial Group Inc. (SIFI), Brookline Bancorp Inc. (BRKL), Astoria Financial Corporation (AF), Fox Chase Bancorp, Inc. (FXCB), Cape Bancorp, Inc. (CBNJ), Northfield Bancorp, Inc. (Stat) (NFBK), OceanFirst Financial Corp. (OCFC), Chicopee Bancorp, Inc. (CBNK), First Commonwealth Financial C (FCF), Dime Community Bancshares Inc. (DCOM), Susquehanna Bancshares, Inc. (SUSQ), The Bancorp Inc. (TBBK), Meta Financial Group, Inc. (CASH) and many others.

In the following excerpt from the Northeast and Mid-Atlantic Banks Report, two expert analysts from Sterne Agee discuss the outlook for the sector for investors:

TWST: Tell us about your coverage universe.

Mr. Kelley: Matt and I cover the Northeast and Mid-Atlantic community and regional bank landscape, which extends from Baltimore up to Bangor, Maine, and west over to Buffalo, New York. That's the quadrant of the universe where we troll for ideas. Market caps range from a $100 million on up to $6 billion or $7 billion.

Above that, we would pass the baton to our Regional Bank Analyst, Todd Hagerman, who covers the likes of PNC (PNC), JPMorgan (JPM) and the money center banks, etc. We also cover a couple of unique, one-off banks among the payments-oriented and prepaid-issuing banks. Finally, we also cover the mutual conversion space nationwide and track all new companies coming public from mutual form. Matt Breese is our point man for that product, all mutual conversion activity across the country.

TWST: Is that still a big theme for you?

Mr. Breese: This year in particular we've seen multiple expansion as measured by p/e ratios, where earnings forecasts have remained flat for 2014 and 2015, yet the value applied to that stream of earnings is increasing every day as you watch the S&P climb the new highs. In the mutual holding company space, we find not only relative value but also absolute value. You have older thrifts going through the conversion process, raising money and becoming fully public either through a second-step conversion or a standard conversion.

In that space, you still have companies issuing shares at or below book value in most cases, and there is a significant difference between where those companies offer stock and trade relative to their fully converted peers. Matt and I have been recommending ownership of the four remaining large mutual holding companies...

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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