Updated with fresh stock prices
NEW YORK (
was one of the biggest declining financial stocks Thursday after the bank priced its stock offering and the Treasury Department backed out of its plan to immediately sell some of its 34% stake.
late Wednesday said it priced 5.4 billion shares of common stock for $3.15 apiece, netting the company $17 billion. The pricing was below the $3.30 to $3.35-a-share range the market had expected Wednesday.
In addition, the Treasury Department decided not to sell any of its shares in connection with the bank's offering, as it wants the maximum price it can get for Citigroup's shares. Treasury Assistant Secretary Herbert Allison said the government will unwind its stake in Citigroup, which it values at roughly $26.5 billion, in the next six to twelve months. Allison's comments came from prepared testimony for his appearance before a House oversight subcommittee.
news, the bank said Thursday it plans to suspend foreclosures for 30 days for homeowners with Citigroup-owned mortgages. Under the program, which begins Friday, Citigroup will halt all foreclosure sales on first mortgage accounts nationwide through Jan. 17. The bank also will cease evictions.
Citigroup said the suspension will affect about 2,000 borrowers scheduled for foreclosure and another 2,000 that were to receive foreclosure notifications in the next 30 days.
Shares of Citigroup closed Thursday down 23 cents, or 6.7%, at $3.22.
Bank of America
was also among the losers of the financial sector Thursday after the bank picked a successor for outgoing CEO Ken Lewis.
fell 2.4% after the bank late Wednesday named consumer banking head Brian Moynihan as its next CEO, replacing Ken Lewis, who will retire at the end of the year.
Moynihan beat out Bank of America's Chief Risk Officer Greg Curl for the top spot after no external candidates accepted the position. Robert Kelly, CEO of
Bank of New York Mellon
, reportedly turned down Bank of America's overtures to become its next CEO.
Following Wednesday's announcement, UBS initiated coverage of Bank of America shares with a buy rating and a price target of $20. The firm said that while the bank isn't making any money right now given massive credit costs, core pre-tax pre-provision earnings totaled $42 billion in the first nine months of 2009.
Still, Bank of America shares gave back 42 cents to finish the regular session at $14.86, following a majority of other financial stocks lower.
In other bank news, influential banking analyst
cut her earnings estimates for
, although no reason for the revisions were given.
For Goldman, Whitney expects earnings of $6 a share in the fourth quarter, down from her prior estimate of $6.38 a share but still above the Thomson Reuters average estimate of $5.59 a share. In fiscal 2010, she is forecasting a profit of $19.65 a share, down from her prior estimate of $21.73 a share but also above the consensus target of $18.78 a share.
For fiscal 2011, Whitney is calling for Goldman to report earnings of $20.60 a share, down from a prior estimate of $24.04. That compares to the Thomson Reuters average estimate of $20.94 a share in fiscal 2011.
Whitney lowered her estimate for Morgan Stanley's fiscal 2010 by 3 cents to $2.60 a share, and she now forecasts a 2011 profit of $2.75, below her prior estimate of $3.28 a share. Analysts are currently expecting Morgan Stanley will post a 2010 profit of $3.28 a share and a 2011 profit of $3.71.
Following the estimate cuts, Goldman Sachs shares slid 2.5% Thursday to $160.93, and Morgan Stanley gave back 4% to $29.12.
Among other bank stocks,
fell 2.6% to $40.27, while
rose 0.9% to $26.07.
dropped more than 9% after the credit card lender reported fourth-quarter net income of $352.1 million, or 63 cents a share, including a $285 million gain from the settlement of an antitrust lawsuit with
However, Discover's managed net charge-off rate swelled to 8.43% from 5.48% a year ago, and the delinquency rate on its managed loans increased to 5.31% from 4.56% a year ago. Discover also said it expects the managed charge-off rate to fall between 8.4% and 8.9% in the first quarter.
Discover shares lost 9.1% Thursday to close at $14.92. Among other credit card lenders,
fell 2% to $40.45, and
Capital One Financial
lost 4.1% to $38.55.
-- Written by Robert Holmes in Boston
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