Investment bank Keefe Bruyette & Woods, which advises bankers on merger deals and has profited from the steady consolidation of U.S. banks since the 1980s, sent analysts Michael Perito and Collyn Gilbert to Philadelphia recently to check how banks are coping with the economy, and see whether the share of any are worth buying at current prices.

Bottom line: Perito is recommending that investors buy Meridian Bank of Malvern, whose shares at 1.1 times its tangible book value make it “cheap” compared with competitors. Gilbert recommended OceanFirst Bank as “fairly forward-thinking” — adding that could make it not just a likely acquirer, but also a takeover candidate, in turn.

Highlights from their report:

While one bank — PNC — dominates western and much of central Pennsylvania, "Philadelphia is far less concentrated,” with Wells Fargo losing some of its predecessors’ once-dominant market share, according to Perito.

BB&T’s attempt to digest two of the area’s former busiest local-business lenders — Susquehanna and National Penn — has “resulted in a lot of market disruption,” he added.

Four years ago, on the eve of the double takeover by BB&T, the market research service J.D. Power rated Susquehanna the area’s most-popular bank — for its customers. But over the next two years, as it struggled to cut costs to pay for the merger, BB&T lost $1 billion of the combined banks’ $6 billion in local deposits. BB&T has since merged with Atlanta-based SunTrust, and plans to rename itself Truist, promising a bit more confusion ahead.

With those kinds of merger follies — familiar from the bank takeovers of the 1980s and 1990s that vaporized the city’s half-dozen major banks, each of which had histories that stretched to the early years of the republic — it’s no wonder that surviving local lenders have moved to fill the vacuum and shown “much stronger organic growth” recently, Perito added.

He says Meridian, Souderton-based Univest Financial (Union National Bank & Trust), and the Main Line branch of Pittsburgh-based business lender TriState Capital Bank all expect to boost loans at near or above 10 percent next year — far faster than the growth rate of the U.S. economy.

New York-based JPMorgan Chase & Co. is building 50 branches in the Philadelphia area, and Republic Bank, chaired by the former Commerce Bank’s founder, Vernon Hill, has added branches in Philadelphia and New York recently. Citizens Bank has relocated branches to meet the new competition. WSFS of Wilmington acquired Philadelphia’s largest remaining bank, Beneficial, and has mounted a big marketing push. But these weren’t among the lenders reviewed by the analysts.

To be sure, U.S. corporate debt has hit a record high, as big corporations sell bonds at near-record cheap rates. Bankers have complained that small businesses have been more reluctant to expand, at least until last year’s tax cuts.

Gerry Cuddy, the last CEO of Beneficial Bank, the largest lender left in Philadelphia when he sold it to Wilmington-based WSFS last year, complained that weak loan demand had been a factor in depressing sales and profits and making a sale more likely.

But other bankers say the region’s innate conservatism creates opportunity. The perceived vacuum at the heart of Philadelphia banking since the last round of bank mergers has attracted competitors from upstate Pennsylvania. See Citizens & Northern’s purchase last week of its second Bucks County bank in two years and New Jersey. See OceanFirst’s expansion from the Shore into Philadelphia and its hiring of new loan officers for Pennsylvania and New York.

There’s plenty of money to lend to creditworthy customers: “All these banks are pretty much operating with strong capital levels,” Perito said.

Some are buying back shares to please investors; others are looking for smaller banks to buy.

Nearly all the banks are suffering from persistent low U.S. interest rates, which typically make it harder for banks to make money from the spread between their cost of funds and what they charge borrowers, said analyst Gilbert. But, surprisingly, banks have not passed all the savings along to customers; loan interest rates are higher than analysts expected.

Perito named Univest of Souderton, Fulton Financial of Lancaster, and New York-based Tompkins Financial Corp. among the banks looking to acquire others in the region. He named Meridian, whose assets topped $1 billion this year, among the scrappy local lenders who have no intention of selling out anytime soon, preferring to grow.

The analysts worry about weak hotel and farm lending in the region. Perito even sees signs of “a bit of a housing shortage” in the Philadelphia area, which has kept mortgage rates cheap — and discouraged loans to marginal, low-rated or first-time borrowers, Gilbert adds — because there’s a lot of competition for the relatively few home loans that are getting made.