Peter J. Winter, Senior Analyst for BMO Capital Markets, Sees Upside for Selected U.S. Regional Bank Stocks in this Wall Street Transcript Interview

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67 WALL STREET, New York - January 7, 2013 - 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: Pockets of Growth in Northeastern Banking - Heightened M&A Activity - Demutualization and MHC Conversion Opportunities - Fiscal Cliff Effects on Banking

Companies include: M&T Bank Corp. (MTB), F.N.B. Corporation (FNB), Regions Financial Corp. (RF), Hudson City Bancorp, Inc. (HCBK), First Niagara Financial Group (FNFG)

In the following excerpt from the Northeast and Mid-Atlantic Banks Report, an expert analyst discusses the outlook for the sector for investors:

TWST: We've heard a lot about low interest rates in a difficult revenue growth environment. What kind of levers do the successful banks hold at this point?

Mr. Winter: One name in particular, Regions Financial (RF), has a couple of levers. The net interest margin has levers to keep it stable, while we expect margin pressure for most of the other banks. Regions still has a big CD book that's repricing. Most banks are already through that process of repricing CDs. There's still a credit recovery story at Regions. We think that for the most part, the credit recovery has played out for other banks. For the industry, credit is still expected to improve, but it's no longer a driver to earnings; for Regions, it's still a driver to earnings. In terms of capital management, banks should be in a great position to be more active returning capital to shareholders. For Regions, the focus this year was repaying TARP. They've done that. Next year, given that their strong capital ratios, sustained profitability and improving credit trends, they're going to be in a great position to return capital to shareholders. We're forecasting they will show the biggest increase in terms of returning capital to shareholders.

TWST: Can you speak to some of the differences between the environment in the Northeast and Mid-Atlantic versus Texas or other parts of the country?

Mr. Winter: One thing that stood out with banks in Texas and parts of the Northeast and Mid-Atlantic regions was that there was no housing bubble to the degree that we saw in other parts of the country, which helped support the economies during the financial crisis. That's not to say that housing wasn't under pressure in the Northeast, but home prices did not increase to the level that we saw in some of the other markets, particularly Arizona, Nevada, Florida and California. So credit quality for a lot of the banks in the Northeast, Mid-Atlantic and Texas have held up somewhat better than other parts of the country, which really stands out. Three names that I cover that stood out as having very good credit quality during the height of the financial crisis were M&T Bank, New York Community Bank and F.N.B. Corp...

TWST: Do you have positive ratings on those three?

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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