It almost made sense: a transaction between PNC Financial Services Group Inc. and Regions Financial Corp., involving branches in Florida.

Between the pressure on Regions to repair itself and the growing sense that Florida is once again fertile ground for banking, all it took was an unsourced report that PNC is interested in Regions — posted on a local newspaper blog and amplified by a pickup from national news outlets — to generate a quick spike in Regions' stock early Wednesday.

"That's why these rumors can get some traction and excitement — everybody is waiting for the next big, blockbuster deal that is going to happen," said Marty Mosby, an analyst with Guggenheim Partners LLC.

But shares of Regions retreated from a session high of $6.56 to a closing price of $6.31 (up 1.8% on the day) as the idea of a takeover by PNC got batted down.

A more plausible scenario might be the second component of the initial report by the South Florida Business Journal, that PNC also is weighing a deal with BankAtlantic Bancorp, which has been shopping around its Tampa Bay-area branches for months. Analysts said PNC is one of a half-dozen or so companies with the motivation and financial wherewithal to acquire BankAtlantic's 19 branches there, and BankAtlantic shares remained elevated throughout the trading session, rising 11.63% on the day, to $0.96.

Regions declined to comment, and BankAtlantic officials did not return calls.

Right or wrong, the rumors touched a nerve with investors, who are eager for straggling banks like Regions and BankAtlantic to get back on course. Regions has lost money in seven of the last eight quarters. BankAtlantic has not turned a profit since mid-2007, and is working on its third capital raise of the year to shore up a tangible common equity ratio that slipped below 2% in the past two quarters.

The market's reaction to the rumors also gave further validation to the notion that Florida is a logical place for a bank like PNC to expand. The Pittsburgh company already has 109 branches there, acquired in the takeover two years ago of National City Corp. And though the financial crisis decimated the Florida real estate market, taking down dozens of banks in the process, the resulting wellspring of relative residential real estate bargains makes it likely that Florida will keep attracting people from the Northeast and Midwest, along with their banks.

"When you look at the [failed Florida] banks that have been purchased from the [Federal Deposit Insurance Corp.], a lot of the buyers have been out of state. I look at that as good news because it shows that people still have an interest in coming here," said Alex Sanchez, president and chief executive of the Florida Bankers Association.

PNC spokesman Frederick Solomon declined to comment on the Business Journal report from late Tuesday or on the company's interest in Florida. But analysts say PNC still has an appetite for acquisitions — though it probably would hold off until after the Federal Reserve's upcoming round of stress tests.

"Generally speaking, I would expect that PNC would be back on the trail," said Standard & Poor's equity analyst Erik Oja, who has a "buy" rating on PNC shares. "PNC is one of the best-capitalized, big banks out there. Their coverage for nonperforming loans is above 100%. They probably have some cash to play around with if they want to look around at distressed assets — but not too distressed. And once all the bad loans have been written off, [Florida] makes sense because it's one of the few states actually growing."

That's the rationale that has kept PNC rival Fifth Third Bancorp committed to Florida even though the Cincinnati company got burned there by its exposure to real estate.

Fifth Third Chairman and CEO Kevin Kabat said Wednesday that "while the real estate sector has been challenging over the past several years, we view Florida more holistically and expect to benefit from broad-based lending and continued deposit growth when the economy recovers. In spite of the fact that Florida was hit hard by the recession, over time we believe that the state will again grow faster than other areas within our footprint, particularly the Midwest."

Painful as it was, the real estate bust didn't do much to reduce the attraction of Florida as a state with laws seen as friendly to wealth and business, and weather friendly to retirees on the golf course. Toronto-Dominion Bank and New York Community Bancorp used the downturn as a chance to crack the Florida market, something both companies had long wanted to do. TD this year bought three failed Florida banks as well as South Financial Group Inc. of Greenville, S.C. In late 2009, New York Community bought the failed AmTrust Bank of Cleveland, which had a presence in Florida.

PNC could easily digest BankAtlantic's Tampa Bay-area branches, which according to industry sources have about $400 million of deposits that should fetch a premium of 5% to 8%. It is less likely PNC would use Regions as a vehicle for expansion in Florida. Analysts said PNC would have limited interest in Alabama and Mississippi, where Regions is heavily concentrated. And Regions' ongoing problems with construction and development loans gone bad would make the company's $140 billion in assets and 1,770 branches a challenge for any bank to take on.

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