DEALTALK-JPMorgan seen hunting for bank deals

By Paritosh Bansal and Elinor Comlay

NEW YORK, July 22 (Reuters) - JPMorgan Chase & Co (JPM.N) is one of a few U.S. banks strong enough to buy others, and some analysts suspect Chief Executive Jamie Dimon is on the prowl for deals but holding back for the right moment to pull the trigger.

Credit crunches usually spur strong banks to buy weak ones, to pick up assets on the cheap. JPMorgan would seem well positioned to acquire now.

There are obstacles to buying now, including accounting rules and the ever-weakening balance sheets of many targets, which gives potential buyers an incentive to wait. But many analysts think JPMorgan is at least looking at deals now.

JPMorgan declined to comment.

"I am pretty certain they are shopping," said Michael Nix, a principal at Greenwood Capital Associates, which has $750 million under management and owns JPMorgan shares. "The fact they haven't done anything yet suggests to me that they are not so sure we've seen the bottom."

On a recent conference call, Deutsche Bank analyst Mike Mayo asked Dimon, "You've been waiting your whole life for this environment ... so what is the impediment to you pursuing a merger right now in the retail banking side?"

"Nothing is impeding us," Dimon said. "But it's not just up to us."

Dimon has said in the past that JPMorgan would look to expand in Florida and California, and experts see several banks that could fit into JPMorgan's ambitions.

The list includes banks such as Washington Mutual Inc (WM.N) and Wachovia Corp WB.N that have a presence in the U.S. Southeast and the West Coast, experts said.

Other, somewhat smaller institutions like SunTrust Banks Inc (STI.N) and BB&T Corp (BBT.N) with a presence in the Southeast can help Dimon realize his Florida dreams, they said.

"If you've got the capital and the access to capital, why not do it when no one else can or when no one else wants it?" asked Cassandra Toroian, chief investment officer at Bell Rock Capital, which owns JPMorgan shares.

Washington Mutual, Wachovia, and SunTrust declined to comment. BB&T spokesman Bob Denham said, "We are committed as ever to remaining independent."

Toroian said Washington Mutual -- the largest U.S. savings and loan, now weighed down by mortgage losses -- would probably be at "the top of the list for JPMorgan."

OFFICIAL ENCOURAGEMENT?

JPMorgan offered to buy WaMu earlier this year, a person briefed on the matter previously told Reuters, but its $7 billion bid was spurned and the thrift instead opted for an infusion of that size from private equity firm TPG Capital LP [TPG.UL] and other investors.