Countrywide Credit Industries has long maintained its intention to remain independent, even as the rest of the mortgage banking industry has been swallowed up by commercial banks.

But last week an equity analyst went on record suggesting that selling to a commercial bank could make sense, both for the Calabasas, Calif., home lender and the buyer.

"Countrywide would be a crown jewel for the right acquirer," Michael McMahon, an analyst at Sandler O'Neill & Partners LP, wrote as an aside in a research note.

The main purpose of the report was to initiate coverage of Countrywide with a "buy" rating. In an interview, Mr. McMahon was quick to say that his takeover theory is "not important at all" to his assessment of the stock. "I would never recommend a company based on [the possibility of] a takeover."

Rather, he says he is recommending the shares mainly because he feels they are undervalued. Countrywide's stock price has taken a beating in the last year, as rising interest rates clipped mortgage production. Friday morning the lender's stock was trading at $26.75, compared with a 52-week high of $48.

"The selloff of the shares of Countrywide … is overdone, and the shares are currently cheap by any measure," Mr. McMahon wrote.

Countrywide is the only independent company among the top five originators and top five servicers. The rest are banks or thrifts, except GMAC Mortgage, which is a unit of General Motors Corp.

Through a spokeswoman, Countrywide chief operating officer Stanford L. Kurland said Friday:

"It remains our desire to grow the company independently and to build many of the ancillary businesses and create synergies that banks have. At the same time, we recognize ourselves as a valuable tool to access mortgage finance and are exploring possible alliances to allow smaller institutions to benefit from our expertise." He cited as an example the recent creation of an international consulting subsidiary.

But Mr. McMahon argued that by becoming part of a bank, Countrywide would eliminate the one competitive advantage that banks and thrifts have over it: leverage. The rating agencies permit banks and thrifts to use more debt relative to equity to finance their servicing rights, which gives them a greater return on that asset than Countrywide can get, he said.

Despite the current leverage disadvantage, Mr. McMahon said, Countrywide has "competed and stayed at top of the heap. Imagine if it was a level playing field."

Mr. McMahon said the buyer in the scenario he envisions would be a U.S. commercial bank "that is either not in the mortgage business in a major way or that has a perpetually underperforming operation," or a foreign bank, perhaps one in Europe.

In either case, he said, Countrywide could retain its cherished autonomy and the unique structure of its retail lending channel, in which loan officers are paid on salary rather than commission.

A European bank might be intrigued by Global Home Loans, Countrywide's joint venture with Woolwich PLC, which is outsourcing American technology and expertise to European lenders, Mr. McMahon suggested. Countrywide could fetch as much as $50 a share from an acquirer, he said.

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