(RTTNews) - Monday, FBR Capital Markets upgraded New Alliance Bancshares Inc. (NAL: News ) shares to Outperform from Market Perform with a price target of $13.

Analyst Bob Ramsey attributed the upgrade based on FDIC acquisition opportunities. For NAL, even relatively small FDIC-assisted transactions can have a material impact on NAL's EPS, which is why the analyst expects that NAL shareholders will benefit, even if there are not many high profile failures in NAL's markets.

The analyst said that as little as $500 million of assets should be 10% accretive to earnings, although it likely takes $3 billion of assets, which could add $0.38 to 2011 EPS, to be a material catalyst for NAL's shares. The analyst considers this level achievable, either through one large transaction or multiple smaller ones, and he considers NAL a likely beneficiary of northeastern bank failures.
While the analyst considers assisted transactions a meaningful potential catalyst, he also favor other steps that NAL is taking to leverage its capital, improve profitability, and expand its commercial businesses, including its new asset-based lending business and recent additions to management, both the new CFO from Citigroup and new head of retail and business banking from SunTrust.

Currently, NAL is up $0.29 or 2.50% and trading at $11.90.

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by RTT Staff Writer

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