If you are a bank, gobbling up other banks can do wonders to your stock – once an industrywide crisis recedes.

Sandler O’Neill analysts say in a research note they looked at bank stocks from the time of the last major recession and how shares did after touching bottom in roughly October 1990.

Contrary to conventional wisdom that takeovers often end up dragging on valuations, acquisitive banks’  median stock price rose by 214 percent three years later and as much as 290 percent five years later, “far outdistancing the performance of the broader bank group,” writes Mark Fitzgibbon, Sandler O’Neill’s director of research.

Among the reasons why the buyers did well: they were generally companies that had excess capital and less severe credit issues, had bold executives and were proactive. “They were able to buy good franchises cheap and fix them up,” according to the note.

The banks in the list included Union Planters Corp, which did 20 deals and saw its stock price rise 283 percent over the three year period. Bank One Corp, which also did 20 deals, saw its stock soar 161 percent over the same period, according to the note.  FleetBoston Financial Corp, which did one deal in that period, saw its stock price rise 239 percent, the note said.

Sandler O’Neill, a boutique investment bank that focuses on financials, goes a step further with a list of the “new breed of regional consolidators” that could be active acquirers, and if history is any any indication, do well when the current credit crisis is over. Among the banks that feature in that 21-name list are Wells Fargo, US Bancorp, BB&T Corp, SunTrust Banks and Regions Financial Corp.

Of course eating doesn’t mean you won’t be eaten at some point. Neither Union Planters (now part of Regions Financial), Bank One (taken over by JPMorgan Chase), or FleetBoston (Bank of America), has survived as an independent entity.

Photo Credit: Reuters