Turnover at Janney Montgomery Scott's investment banking unit, culminating with the departure of capital markets chief Jordie Maine and yesterday's firing of 40 stock analysts, traders and institutional salespeople and the bank's retreat from some non-East Coast offices, has bank-watchers wondering whether owner Penn Mutual Life Insurance Co. is clearing the decks and dressing Janney's remaining businesses, which employ 1,800 -- including 500 at its Philadelphia headquarters -- for a possible sale or merger of the capital-markets group and/or the firm's money-maker, its network of 800 financial advisers in offices along the East Coast.

Latest departure: Tom Kozlik, a Janney municipal bond analyst named to Institutional Investor's 2014 All-America Fixed-Income Research Team for Municipal Strategy, has left to join PNC. The recent streamlining followed investment bank turnover and cuts earlier this year, frustrating Pennsylvania's hope that an $11 million grant to help Janney move across Market St. in 2011 would spark financial job growth in Center City Philadelphia.

Who would buy Janney, if Penn Mutual would sell? Stifel & Co. (which has acquired the former Keefe Bruyette & Woods, Stern Agee, Thomas Weisel, and other regional or specialized brokerages in the last couple years) "has approached Penn Mutual (to buy Janney), and I believe that offer still stands," a former Janney executive told me. "Stifel has been on a buying binge," an ex-Janney stock analyst agreed. "Stifel is the aggregator of regional financial advisory firms," says another departed Janney manager.

Or not: "Logically that deal should have happened long ago. But Penn Mutual is not a profit-driven company. Their management's goal is to hit financial targets and distribute gains to the policyholders. They are not (likely to sell Janney, if a sale) is not going to do anything for them," acknowledges the departed manager.

Janney long relied on Philadelphia-area fund managers and bank trust departments to direct deals its way, out of regional loyalty and convenience. But that business has just about dried up in recent years, with the decline of the local active-investment firms.

Janney still has its retail broker network, which has prospered in the stock price run-up of recent years, and continues to add rep offices, for example in the Carolinas and Florida. That business could be worth a lot more when interest rates start rising again and the business of sweeping customer cash into overnight loans regains its old profitability.

A suburban money manager blames Janney for not going after new business more aggressively: "They buy (existing brokerage) businesses. They aren't known as hustlers. You need to hustle or you end up part of someone else," he told me.

Could Penn Mutual keep all those the registered advisers without the investment bank? "Banking fees are a big part of the distribution model," and plans to go after new bank deals (and hire salesmen, analysts and traders to support those deals) are a temptation for anyone who owns an investment distribution business, says the former manager. "My gut tells me they won't sell this thing," he concluded.

Of course, if Janney can't make more money from its remaining equity capital markets group (infrastructure, energy, financial instutions, healthcare), or from its newly-reinforced bond teams, there may be renewed consideration of still more cuts, and capital markets layoffs, in a couple of years.

Then it'll again be up to Penn Mutual, to decide whether the insurer wants to bear the resulting write-offs of sunk costs and lost business, or hire yet another team of million-dollar-a-year managers to try and build a next-generation regional investment bank.