Laughing all the way to the bank ?

The hottest M&A sector for the last 2 years has been the banking/S&L area. Based on my observation, i can say that there was easily one merger/buyout every other day (yes!). And i am sure i have missed some mergers. If you consider other mergers (say of private entities ) the number could be much higher. The premiums have ranged from 5% to close to 60%.
This obviously got a lot of press coverage and most banks were priced for takeovers. Now interest rate worries are making some banks a bit more approachable.
Overall the banking sector is among the most mature of various industries due to regulation resulting from past blowups. A loss of capital is highly unlikely. The M&A season has been so busy that even the Fed stepped in to comment on it - saying that this activity is healthy.
Given the precarious state of the economy w.r.t debt/mortgages, a bank failure is something the govt just cannot afford right now.
While city/county/regional/rural banks get the best premiums, most of these also tend to trade very lightly making it hard to get the right price. The state/national level bank stocks make for better trades, but these already have a big Street ownership.
One another factor contributing to activity here is the interest shown by foreign banks to get a piece of US banking. Deutsche Bank, Royal Bank of Scotland, Barclay's and HSBC are among the ones that have publicly announced that they are looking for US buys.
Here is a list of the bank stocks in my portfolio with some additional details for each.

• Gold Banc - acquired by a private equity firm.
  
• Columbia Bank - recently mentioned by Barrons as a takeover candidate.
  
• US Bancorp - another candidate for Citigroup or Bank of America.
  
• Greater Bay Bancorp - a regional candidate.
  
• Huntington Bancshares
  
• Mellon Financial
  
• Washington Mutual : probably the one that will be most hurt by mortgage failures. But still a very attractive target given its size.
  
• Private Bancorp: "private banking" catering to rich clients is a growing subsector. Likely target for medium sized banks.
  
• PNC Financial
  
• Banc Corp
  

If you extend this to credit card companies, there is definitely some more activity pending. Here is the list of credit card stocks i own:

• Providian Financial : has been rumored to be a target more than once in the past! I made a good short term profit from it as it went up from 2 to 12 over the last year or so. Holding onto a few and waiting for the buyout.
  
• MBNA : was reported recently that Bank of America may be interested!