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KBW pegs Bank Mutual, Hancock, others as possible merger targets

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KBW pegs Bank Mutual, Hancock, others as possible merger targets

Keefe Bruyette & Woods has added five banks to its list ofpossible bank merger candidates.

In a May 3 research report by Michael Perito, Christopher McGrattyand Kelly Motta, Milwaukee-based BankMutual Corp.; West Point, Ga.-based Charter Financial Corp.; Denver-based Guaranty Bancorp; Gulfport, Miss.-based ; and Stuart, Fla.-basedSeacoast Banking Corp. of Floridawere added to the research firm's list of potential sellers. The list representsinstitutions that could potentially be in a transaction with a larger company innext 24 months.

For Bank Mutual, the analysts wrote that the company has an attractivefranchise due to its being the third-largest financial institution in Wisconsinand its presence in attractive markets in that state such as Milwaukee, Madison,Green Bay and Eau Claire. However, Bank Mutual is experiencing difficulty deployingexcess capital, and, due to a slowdown in loan growth and an elevated expense base,profits for the company are below its peers in the Midwest.

Potential buyers could also consider Charter Financial becauseof its significant presence in Atlanta after the recent close of its acquisition of CBS Financial. The company inApril passed the three-year anniversary of its mutual conversion.

Given Guaranty Bancorp's 28% private equity ownership, the analystsfeel that the company could likely sell itself, especially because of the scarcityvalue it offers in attractive Colorado markets, along with its improved profitabilitymetrics and substantially deployed excess capital.

For Hancock Holding, the analysts wrote that the negative effectsfrom its energy exposure and substantial underperformance over time could promptthe company's board to seek strategic alternatives which would include a sale ofthe company.

For Seacoast Banking Corp. of Florida, the analysts pegged shareholderactivists as possible catalysts that could drive the company to sell, especiallysince there would be buyers interested in the company's footprint.

The report also disclosed moves on the analysts' three otherlists: flippers, anticipated buyers and active buyers. Among the changes on theselists:

* Fresno, Calif.-based CentralValley Community Bancorp and Birmingham, Ala.-based were added as activebuyers.

* Irvine, Calif.-based Bancof California Inc. and Memphis, Tenn.-based First Horizon National Corp. were moved to anticipated buyersfrom flippers.

* Champaign, Ill.-based FirstBusey Corp. and Oak Ridge, N.J.-based Lakeland Bancorp Inc. were moved to active buyers from flippers.

* New Orleans-based FirstNBC Bank Holding Co. was moved to an anticipated buyer from a seller.

* Jacksonville, Fla.-based EverBank Financial Corp was removed as an anticipated buyer.

* Marietta, Ohio-based PeoplesBancorp Inc. and Souderton, Pa.-based Univest Corp. of Pennsylvania were removed as active buyers.