Regional Bankers Offering Bundled-Product Model, M & A Advice to Mid-Tier Companies

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Regional Banks Come Courting for Business

• Summary: In what analysts see as the start of a new trend, regional bankers are looking for ways to sell customers advice on deals as the mergers boom continues. After largely abandoning investment banking in the aftermath of the 2000 tech-stock bust, regional banks have gotten back into the game. This is highlighted by two recent acquisitions. Wells Fargo & Co. (WFC), the nation's fourth-largest bank by market value, recently announced the purchase of Barrington Associates, a 40-person investment bank in Los Angeles that specializes in advising midsize businesses with annual revenue of between $25 million to $1 billion. The deal follows a similar move last year by PNC Financial Services Group Inc. (PNC), the nation's 14th-largest bank by market value, which purchased Harris Williams & Co., a 110-person boutique investment bank in Richmond, Va., that is considered a leader in middle-market mergers-and-acquisition advisory work. These deals mirror strategies pursued by the industry's biggest players - Citigroup Inc. (C), Bank of America Corp. (BAC) and J.P. Morgan Chase (JPM) - the three largest banks in the U.S. by market value. The regional banks aren't looking to compete with the big players on a global scale, but want to offer more services to existing customers and attract new ones that are often ignored by the financial giants. "What is happening is that the bundled-product model is coming more into the middle market," said Jim Lawson, a co-founder of Lincoln International, a Chicago midmarket investment bank with 100 bankers in the U.S. and Europe. "You will see more consolidation between M&A boutiques ... and financial institutions."
• Comment on related stocks/ETFs: For more on the regional bankers, see Seeking Alpha's Regional & Commercial Banks page. In addition, the Regional Bank HOLDRS ETF (RKH) covers a selection of regional banks.

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