Texas Regional Banks May Become Acquisition Targets as Outer Banks Seek to Gain Exposure to the Positive Growth Trends in the Lone Star State

Wall Street Transcript

67 WALL STREET, New York - March 6, 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: SVB Financial Group (SIVB), Flagstar Bancorp Inc. (FBC), Western Alliance Bancorporatio (WAL), Sterling Financial Corp. (STSA), Hilltop Holdings Inc. (HTH), Texas Capital BancShares Inc. (TCBI), East West Bancorp Inc. (EWBC), City National Corp. (CYN), Cullen/Frost Bankers, Inc. (CFR), Comerica Incorporated (CMA) 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's your overall sentiment on the West Coast and Texas banks right now and why?

Mr. Rabatin: I've been modestly bullish the past two quarters, given a backdrop of profitability declining less than people are concerned about, loan growth potentially improving, M&A picking up, and just generally speaking, some of my banks being in markets and geographies where things are better than the overall country.

I think the bank space reflects to some degree a lot of that, given an improvement in the valuations, especially this past quarter. But I continue to think that despite the challenges, which are numerous, this space is going to have a pretty good 2013.

TWST: I was going to ask how Texas and the Western region compare to the rest of the country. What makes these markets better than the overall country - is it simply the local economies or something else?

Mr. Rabatin: I think it depends on where. If we're talking about Texas, I think that Texas itself may be the best in the country, and some of that's going to be energy-related, but you are also talking about a state that has the three fastest growing markets in the country - Houston, the Dallas/Fort Worth Metroplex and San Antonio. These markets are exciting for banks for a number of reasons. First is, economic growth there is faster than other areas of the country.

Secondly, you have, generally speaking, large markets where the bigger banks tend to have pretty high market share, so if you have any ability to pull market share away from some larger competitors, it's a pretty good opportunity to have really strong loan growth, especially in commercially focused type lending, whether it be energy, health care or other sectors. And then M&A; Texas in particular is a market where people want to be, and so those institutions in Texas that are focused either exclusively in Texas or mostly in Texas are going to get the benefit of ...

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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