expectation of higher loan charge-offs sent bank stocks tumbling Wednesday, as investors worried whether other lenders will face the same fate.
Key shares plunged 10.4% to $19.66 after the regional bank announced that it expects net loan charge-offs to be closer to 1% to 1.3%, instead of its earlier forecast of 0.65% to 0.90%. Homebuilders unable to pay back loans were the culprit behind the damaging debt.
Other regional banks also dipped on the news.
fell 5% to $18.08.
Fifth Third Bancorp
slid 3.6% to $18.85, after the stock hit a 52-week low of $18.48 during the day's trading.
Financial Sector Index slid 15.42 to 7,296.02.
Elsewhere, private banking firm
Boston Private Financial Holdings
sunk 7% to $8.48 after it said it was reviewing its capital levels and may have to raise more money.
Just days away from its meeting in which shareholders are expected to approve its sale to
( BSC) fell 0.9% to $9.38.
( ABK) plummeted 9% to $2.94 after confessing that it too would take more charges as a result of its writedowns on credit derivatives in April. Net writedowns on its credit derivatives holdings totaled $176 million, with the insurer taking a writedown of $228 million on the value of collateralized debt obligations.
American International Group
fell after a Citigroup analyst suggested its recent plans to raise capital may not be enough. Shares gave back 4.7% to trade at $34.91.
One of the few winners for the day was
, which saw shares jump 3.5% to $44.07 after Standard & Poor's announced that the Kansas City-based bank will join the S&P MidCap 400 index after the close of trading June 5.