A small deal last week could be a great sign for bank investors if strategic M&A really is revving up for a return to the sector.

On June 29, privately held Eastern Bank agreed to acquire Wainwright Bank & Trust

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[WAIN  Loading...      ()   ] for roughly $163 million. While that number isn't particularly substantial in the grand scheme of things, the $19 per share cash consideration for Wainwright's stock was a 98% premium to the prior session's close, and a 105% premium to the target bank's tangible book value, according to SNL Financial.

Historically, paying two times book value for a strategic acquisition to expand market share is not a very high premium, but in this market the deal looks very expensive. Spokesman Joe Bartolotta told TheStreet that Eastern Bank viewed the deal as "not a financial transaction but a strategic one" and aggressively pursued it.

The two banks' branch networks compliment each other very well, Bartolotta added, noting that Eastern Bank would seek further expansion to fill in other gaps in its retail network, either by opening new branches or more acquisitions.

Eastern Bank had $6.6 billion in total assets as of March 31, while Boston-based Wainwright had $1 billion in assets, so Eastern Bank will be about 15% bigger if the deal closes in the fourth quarter as expected. The combined bank would operate more than 90 branches in eastern Massachusetts.

While it may have made sense for the community-focused Eastern Bank to pay twice the market price for a well-capitalized and profitable competitor to expand in its preferred market, the deal might not be a trend setter, since there are so many other reasonably healthy banks priced close to book value.

Still, if strategic M&A does become a bigger factor in the next year or so, as some analysts have already hypothesized, the profile of the Wainwright deal — relatively small-scale, complimentary footprint, no major holes in the balance sheet, and the ability to pay an eye-popping premium because of depressed valuations — may provide the blueprint for future transactions.

Out of 959 publicly traded U.S. banks and thrifts — excluding those traded on the pink sheets — for which the data was available from SNL Financial, about two-thirds were trading below tangible book value at the end of last week.

Narrowing down potential prey for regional expansion to banks and thrifts with total assets between $1 billion and $10 billion, 263 names fit the bill, and 122 of those closed below book value on July 2.

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