With banking stocks back in favor, smaller banks are learning they cannot count on investors to buy their stock just because it is cheap.

Shares of banking companies with more than $1.5 billion of assets have gained 13.6% this year through Sept. 18, said Marni Pont O'Doherty of Keefe, Bruyette & Woods Inc., and smaller banks have risen only 1%. "Smaller caps used to move as a block even a couple of years ago," she said. "Now some stocks are blowing the lights out, but the rising tide might not lift all the boats."

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