NEW YORK (
) -- 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
, 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
, 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
, 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)
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
(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
(C - Get Report)
fell 1.44% to $4.11.
Written by Dan Freed in New York