This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Regional Banks: Financial Losers

Stocks in this article: MTB KBE KRE C BAC WFC FULT

NEW YORK ( TheStreet) -- Regional bank stocks sold off sharply Monday, while shares of larger banks were down by a smaller margin.

The trend was visible in the SPDR KBW Regional Banking ETF (KRE), which was down by 3.88% to $21.79 shortly before Monday's close, compared to a drop of 1.64% for the SPDR KBW Bank ETF (KBE), which focuses on the largest U.S. banks.

Frank Schiraldi, analyst at Sandler O'Neill, attributes the phenomenon to the lower-than-expected price M&T Bank Corp. (MTB - Get Report)is paying for Wilmington Trust (WL), in a deal announced Monday.

The $351 million M&T will pay is roughly equal to Wilmington's tangible book value. The low price sent shares of Wilmington down 42.05% to $4.12. M&T, meanwhile, saw its shares rise 3.4% to $77.29.

In a presentation Monday, M&T described "through the cycle" losses of 40% on Wilmington's portfolio of construction loans. Schiraldi says those estimates caused investors to put pressure on shares of bank stocks like Fulton Financial Corp. (FULT - Get Report) and Susquehanna Bancshares (SUSQ) which have construction loan portfolios in the same region. Fulton's shares were down 5.67%, to $8.81, and Susquehanna's were down 6.42% to $7.40.

"People try and look at who might have exposure in the Maryland/Virginia/Delaware area and maybe look to hit those guys today just because of the marks in the presentation M&T put out," Schiraldi says.

The largest banks, meanwhile, did not fare quite so badly. Shares of Wells Fargo (WFC - Get Report) were down by 1.63% to $25.64, Bank of America (BAC - Get Report)shares dropped 0.43% to $11.40 and Citigroup (C - Get Report) fell 1.44% to $4.11.

-- Written by Dan Freed in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs