Merger activity in the banking sector has cooled, but takeover appeal is becoming a more important factor in bond analysts' recommendations.

During a conference call Monday, bank bond analyst Eric J. Grubelich of Keefe, Bruyette & Woods Inc. listed several banks he recommends that have takeover appeal as well as robust business operations, including Mercantile Bankshares of Baltimore, Susquehanna Bank Shares of Lititz, Pa., Mellon Bancorp, and Dime Bancorp.

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