Wunderlich's "Burn-Down" Analysis

Wunderlich Securities conducted a mid-cycle "burn-down" analysis on the WSI Regional and Communicty Banks that incorporated cumulative loss expectations by loan type on peak loan balances since early 2008, which Wunderlich believes was the beginning of the credit cycle. Bancorp South (NYSE:

) Green Bankshares (NASDAQ:

) and Texas Capital Bancshares (NASDAQ:

) all appear to have significant core capital deficiencies, but Wunderlich believes the models overstate the loss content of loan portfolios given the success of underlying markets in the Texas Triangle. Wunderlich advises investors to exercise caution with these companies. Synovus Financial (NYSE:

) and Whitney Holding (NASDAQ:

) both appear to be priced at significant discounts to as "burn down" diluted shares, even after swallowing severe loan losses and raising common equity solely for the purpose of redeeming TARP. These companies are participating in FDIC-assisted acquisitions, according to Wunderlich: Bank of the Ozarks (NASDAQ:

)($37.64, Buy), CenterState Banks (NASDAQ:

)($9.12, Buy), Columbia Banking System (NASDAQ:

)($18.93, Buy), Hancock Holding Company (NASDAQ:

)($29.41, Buy), Heritage Financial Corporation (NASDAQ:

)($13.42, Buy), Home BancShares (NASDAQ:

)($22.45, Buy), IBERIABANK (NASDAQ:

)($51.02, Buy), PacWest Bancorp (NASDAQ:

)($18.77, Buy), Renasant Corporation (NASDAQ:

)($14.01, Buy), SCBT Financial Corp. (NASDAQ:

)($29.78, Buy), and Washington Banking Company (WBCO–$13.10, Buy).