Merger activity is expected to pick up again at the turn of the year, and three banks whose stock prices have risen strongly in recent weeks look like attractive takeover candidates, according to a Duff & Phelps analyst.

Claire M. Percarpio, group vice president at the Chicago-based firm, said First Interstate Bancorp, Crestar Financial Corp., and U.S. Bancorp all have significant upside potential in their share prices, even after a strong performance by all three stocks in December.

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