MBT Financial shares rallied 63.1% to $3.18 after the bank posted a first-quarter profit of 2 cents a share, compared to a single analyst's estimate the bank would lose 29 cents a share in the quarter. Volume topped 1.34 million shares, compared to the 50-day average daily volume of 42,000, according to the Nasdaq.
MBT Financial is the latest in a string of small-cap regional banks that have surprised with quarterly results. For instance, Dearborn Bancorp (DEAR) said late Tuesday that it swung to a first-quarter profit of 15 cents a share from a year-ago loss of 81 cents a share.
Both MBT Financial and Dearborn were only two of several small-cap bank names that were experiencing a sharp share price increase on massive volume. For example, Crescent Banking (CSNT) surged 172% to $2.23, as volume of 1.68 million was more than 70 times normal."We've been seeing better earnings from bigger regionals, like Fifth Third and SunTrust, so perhaps traders who dabble in these names are hoping for the same type of turnaround," says Robert Pavlik, chief market strategist with Banyan Partners. "The situation facing these financial companies certainly has improved." Pavlik, who does not cover or follow regional banks closely, also speculates that these bank stocks, which have a low float, could be rallying due to short squeezes. "If you get any type of movement in names with shorts, they get squeezed out. If a squeeze gets going, you typically get a tremendous run-up," he adds. Among other regional banks up on above-average volume, Integra Bank (IBNK) was up 46.3% to $1.58, FPB Bancorp (FPBI) gained 39.6% to $2.19, FNB United Corp. (FNBN) added 29.2% to $2.17, and Frontier Financial Corp. (FTBK) advanced 22.5% to $2.89. Also, United Western Bancorp (UWBK) rose 22.8% to $2.05, Western Alliance Bancorp (WAL) rallied 21.3% to $8.90, Pacific Capital Bancorp (PCBC) was up 16.7% to $5.10, and BankAtlantic Bancorp (BBX) was higher by 15.6% to $2.89. -- Written by Robert Holmes in Boston. Follow Robert Holmes on Twitter and become a fan of TheStreet.com on Facebook.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV