The America's Community Bankers Nasdaq Stock Index is up nearly 20% since its inception a year ago, while its market capitalization has increased 9%, to about $190 billion.
In the next year the trade group hopes to raise the index's profile by having it serve as a benchmark for a mutual fund or some other financial product.
"We've been contacted by a number of parties about using the index as part of a financial product, and we are still in discussion with some," said Robert R. Davis, ACB's executive vice president.
But market watchers say they are not sure the index would have enough clout to become an investment tool, since most of the stocks included in it are illiquid and because there are already so many bank indexes.
The index is made up of all the banks and thrifts listed on the Nasdaq, excluding the 50 largest and those with an international or credit card specialization. When it was created last year it included 542 banks, but mergers and acquisitions have shrunk that number to 520.
William Donius, the chief executive officer of the $401 million-asset Pulaski Financial Corp. in St. Louis, said the index has raised awareness about community banks like his, but he is unsure how much it has helped his company's stock.
Pulaski's stock has risen nearly 30% since the index kicked off, but Mr. Donius said that increase could be attributed to Pulaski's promoting itself to investors and its above-average growth last year.
"I'd say it's been a positive for us, but it's a hard type of thing to measure, specifically when we have active investor relations efforts," he said.
Terry Howard, the CEO of First Banctrust Inc. in Paris, Ill., said the conferences that America's Community Bankers has hosted have been helpful.
The group has held investor conferences in New York twice this year to highlight the large banks in the index; more than 200 bankers and investors attended last month's conference.
The $226 million-asset First Banctrust gave a presentation - its first-ever at an investor conference - at last month's conference, and Mr. Howard said that experience definitely put his company on some investors' radar screens. In the three weeks since the presentation First Banctrust's stock has risen about 3%, and its average daily volume in the last 10 trading days has been twice that of the previous three months.
Scott Alaniz, an analyst with Sandler O'Neill & Partners in New York, said banks would not be able to quantify the index's effect until there is a financial product based on it. However, he also said it is doubtful such a product will be created in the next year, since there are already about two-dozen banking indexes, and the ACB's is broadly based.
"There are just so many banking indexes of all types out there," Mr. Alaniz said. "And at some point you just have to look at the performance of the individual banks and not the indexes."
Analysts said that another problem in achieving benchmark status is that the majority of the stocks in the ACB index are illiquid and unattractive to investors. But Mr. Davis said that since the index is weighted in favor of companies with large market caps, the thinly traded stocks have little effect.
Mr. Davis said the index has helped raise the trade group's profile.
"Were not bashful about claiming our just desserts," he said. "Many banks have become more acquainted with us, and some have become members."
