Regional bank stocks could be on the rocks again
CNN
Stocks of small lenders are still in the doldrums nearly a year after the regional banking crisis.
A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link. Stocks of small US lenders are still in the doldrums nearly a year after the regional banking crisis. The KBW Nasdaq Regional Banking index, which tracks the performance of regional lenders and thrifts, has fallen more than 2.4% this year compared to the benchmark S&P 500’s 2.6% gain. PNC Financial Services (PNC) shares have declined 2.3%, Comerica Inc (CMA) shares have slipped 1.5% and US Bancorp (USB) shares have fallen 1.1% during the same period. Regional banks reported fourth-quarter earnings this month that raised concerns that small lenders have yet to recover after overcoming the worst of the industry’s turmoil in 2023. KeyCorp’s (KEY) net income fell about 92% from a year earlier, Citizens Financial’s (CFG) slipped roughly 71%, Huntington Bancshares’s (HBAN) declined about 62% and PNC Financial Service’s slid around 43%. Adding salt to the wound, the Federal Reserve said on Wednesday that it is shuttering the Bank Term Funding Program, established after regional banking turmoil last year to help lenders meet their liquidity needs. The program will continue for another couple months, but the interest rates on new loans through the program’s expiration on March 11 has been adjusted so that it’s no longer lower than the rate on reserve balances.
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