No investment bank has benefited from the uptick in bank mergers more than Stifel Nicolaus Weisel, which has become the No. 3 advisor by deal volume this year.

Stifel Nicolaus — the investment banking arm of Stifel Financial (SF) in St. Louis — had advised 10 bank and thrift deals worth $500 million as of Sept. 30, according to SNL Financial.

Its bank M&A outfit was the No. 6 advisor by deal count in 2011, with 5 transactions worth $70 million. Its bank M&A results this year are its best since 2007, and they reflect market upheavals that are reshaping the pecking order of advisors. Boutiques Sandler O'Neill & Partners and Keefe Bruyette & Woods (KBW) — which ranked No. 1 and No. 2 advisors by deal volume in the first nine months of the year — have long dominated small-bank M&A, but the other players are catching up.

New hires and preparations for a long-expected wave of bank consolidation have fueled Stifel's gains, says Rick Maples, the co-head of investment banking. Stifel acquired Stone & Youngberg last year and Thomas Weisel Partners in 2010.

Its gains also reflect how rivals such as Hovde Financial and Raymond James & Associates have lost this year because of talent defections, intensifying competition and other factors.

The pace of bank deals has increased this year but is still relatively modest in historical terms. The 160 transactions announced through the end of September put 2012 on track to surpass the 178 deals announced in 2011, but last year was one of the slowest in decades, according to SNL.

"I would say generally that there are a fair amount of conversations happening," Maples says. "We have seen a couple of decent-sized transactions."

Michael Barry, managing director in charge of financial institutions M&A, concurs.

"We think the drivers are in place" for more deals to occur," Barry says. "There are way too many banks. … It is very difficult for these smaller institutions [to thrive] in a low-growth, low-interest rate environment."

Lisa Schultz, Stifel's managing director in the equity capital markets group, says a recent spate of stock offerings by banks indicates that the public markets "are open for selected companies today."

In September Stifel named Robert Hutchinson a managing director covering bank M&A in the Northeast. Hutchinson, who left Sterne, Agee & Leach, will head up Stifel's burgeoning mutual conversion practice.

"The platform here is extremely robust," Hutchinson says. "When you think of depositories you have to be able to provide them advice on numerous products."

Recruiting Hutchinson was part of the firm's broader expansion. It has hired 52 fixed income sales and trading specialists, 103 financial advisors and a number of investment bankers who focus on the gaming, industrial, maritime and retail industries.

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