(Updated with final stock price movements throughout).
NEW YORK (
was among the losers of the financial sector Friday, even after Bank of America-Merrill Lynch upgraded the bank's stock to buy from underperform.
In a research note Friday, BofA-Merrill analyst Guy Moszkowski said
appeared set to be stabilizing after recapitalizing itself with government aid. "With crisis largely past for Citi, we believe psychology on the company is changing," the firm wrote. BofA-Merrill also increased its stock price target for Citi to $5.75 from $2.50.
Despite the upgrade, Citi shares finished lower by 2 cents, or 0.5%, at $4.04. Among other losing bank stocks Friday,
each lost 1.1%,
shed 0.5% and
was off by 0.3%.
What the Fed? Citi Circle
In a separate research note, BofA-Merrill also upgraded
to buy from neutral, and the firm raised its stock price target to $7 from $4. Regions shares finished higher by 44 cents, or 8.5%, at $5.64.
Bank of America
won a restraining order against
( CNB) to prevent the Alabama lender from selling or disposing of more than $1 billion in cash and loans.
On Thursday, BofA sued Colonial, which is currently under a federal criminal investigation for accounting irregularities, claiming Colonial is holding the $1 billion in cash and loans as a custodian for Ocala Funding.
Meanwhile, various published reports say
is set to be shut down by regulators Friday, with deposits acquired by
. The Federal Deposit Insurance Corp. is expected to take Colonial into receivership and selling its deposits and branches to BB&T, which is based in Winston-Salem, N.C.
FBR Capital Markets analyst Paul Miller said investors really need to know the details of the transaction and the extent of FDIC loss-sharing in order to determine how beneficial this transaction will be to BB&T.
"Specifically we need to know how much FDIC assistance will be involved,the how sizable the purchase accounting marks are, and whether BBT is going to support its capital levels through a capital raise," Miller said in a research note.
BofA shares climbed 39 cents, or 2.3%, to close at $17.39. Colonial BancGroup shares dropped 5 cents, or 11.9%, to 41 cents. BB&T, meanwhile, jumped $2.43, or 9.4%, to $28.23.
Also on the winning side,
Allied Irish Banks
shares jumped after
reported that the
Royal Bank of Canada
is looking to buy a stake in the bank. The report said the Royal Bank of Canada has started discussions with Allied Irish Banks and the Irish government.
Allied Irish Banks added 51 cents, or 8.7%, to $6.40.
Among other analyst moves, FBR Capital Markets resumed coverage of
with a rating of market perform and a stock price target of $17. The firm said it expects near-term capital/liquidity concerns to create better buying opportunities for the stock over the next six months. Zion finished up by 9 cents, or 0.5%, at $16.95.
In other financial sector news, Treasury Secretary Timothy Geithner told
The Wall Street Journal
he doesn't think the financial system is reverting to past practice, adding that the Obama administration won't let that happen.
"The big banks are running with much less leverage now, much more conservative liquidity cushions, there's been a significant shrinking of their balance sheets, getting rid of bad assets and cleaning up," Geithner said, according to the
. "And the weakest parts of the system don't exist anymore."
-- Written by Robert Holmes in New York