Regional Banks Stampede To Sell Stock

NEW YORK (TheStreet) -- Regional banks took the opportunity last week to hit the capital markets with equity offerings and observers say that more banks are likely to get on the bandwagon.

In the past week or so, banks priced a total of $1.96 billion in stock offerings, according to Dealogic. The proposed sales follow the recent rally in U.S. stocks amid the growing belief among investors that the economy is improving. Following Friday's close, the Dow Jones Industrial Average had bounced more than 50 percent from its March low, and was closing in on 10,000.

The largest deal was Synovus Financial Corp. (SNV Quote), which priced $600 million worth of stock late Wednesday. Huntington Bancshares (HBAN Quote) and Washington Federal (WFSL Quote) also priced $399.8 million and $350.2 million worth of stock respectively last week, according to Dealogic. (Huntington also completed last week a $150 million at-the-market offering announced on Sept. 9.)

Also getting in the act were smaller banks, such as Home Bancshares (HOMB Quote), Flushing Financial (FFIC Quote), Eagle Bancorp (EGBN Quote) and Heritage Financial Corp. (HFWA Quote), among others, Dealogic says.

Several other banks announced plans for at-the-market equity injections last week. E*Trade Financial (ETFC Quote) is offering up to $150 million worth of common stock, while Zions Bancorp (ZION Quote), a Salt Lake City-based company, said it anticipates selling up to $250 million worth of common stock over the next several quarters. Zions also priced $450 million worth of senior notes.

"They're all in the same boat -- shoring up their balance sheets, protecting against downturn in commercial real estate market and protecting against regulators balance sheet [requirements]," says Roger Cominsky, a partner in Hiscock & Barclay's financial institutions and lending practice.