Small Niche Banks Seen in M&A Focus; Smith Barney Predicts Starring Role When Deals Pick Up
Padgett, Tania, American Banker
Analyst Jacqueline Reeves says the kinds of banks she knows best could soon find themselves thrust into the spotlight.
Ms. Reeves, who recently left a post at Janney Montgomery Scott Inc. to join Smith Barney Inc., predicts small banks with special niches will be heavy participants when the mergers and acquisitions lull ends.
"There is a pause because most banks are making sure their own systems are in place, so that they can acquire more easily," said Ms. Reeves. "But when the consolidation picks up, certain niche players will find their place."
Analyst Henry "Chip" Dickson, also of Smith Barney, said the added coverage of small and midsize banks Ms. Reeves brings will go hand-in-hand with his coverage of larger banks.
"Consolidation is a reality," he said. "We're only in the third or fourth inning. Some banks have come up to bat, but were' still in the realization period."
Ms. Reeves, age 30, cut her teeth as an analyst at Merrill Lynch as a financial consultant trainee, where she covered a "broad spectrum of industries."
She did similar research in a year-and-a-half stint at Rothschild Inc.
But it was under banking guru Thomas Hanley at CS First Boston that she embarked on a specialty of covering small and midsize banks.
"I thought it was fantastic," said Ms. Reeves, who stayed at CS First Boston for three years. "The company gives more in-depth understanding of the industry."
Mr. Hanley, who has trained many banking analysts, said Ms. Reeves was one of his proteges. "She had the ambition and the drive for (bank analysis) ... she was very diligent - more so than most analysts that I have trained," said Mr. Hanley, who has since moved to UBS Securities Inc.
Ms. Reeves has brought coverage of 11 midsize banks to Smith Barney, including nine southeastern banks and two banks in New Jersey: Summit Bancorp., Princeton and Commerce Bancorp, Cherry Hill.
She said coming to Smith Barney will enable her to expand her coverage list.
"The Southeast is a very attractive area for banking," said Ms. Reeves. "The economy (there) is definitely expanding at a rate faster than the rest of the nation."
But she noted that the Midwest "also has provided a good banking climate. …