RJ and Makay

According to Money Morning, weak U.S. regional banks could be attractive targets for Canadian banks looking to expand their U.S. holdings. The upshot, according to the online article, is that a wave of mergers and acquisitions could lead to higher valuations, especially for smaller, regional banks.

The financial services industry has been subdued for the past three years as weak loan growth, shrinking profit margins, increased regulation and low valuations kept investors at bay. But forces now are pressuring the industry to contract and "will create more willingness to sell from bank management teams and board of directors over the next year," the article states.