U.S. regional banks were among the best performers today in the Standard & Poor's 500 Index as margins stand to benefit from rising interest rates. The biggest U.S. lenders declined, led by Citigroup Inc.

Zions Bancorporation, based in Salt Lake City, gained 2 percent to close at $27.46 in New York, the third-biggest advance in the S&P. Buffalo, New York-based M&T Bank Corp. increased 0.8 percent, and Huntington Bancshares Inc. gained 0.5 percent. The benchmark index plunged 2.5 percent, the most since November 2011, after the Federal Reserve said yesterday it may start tapering bond purchases that have fueled market gains.

Regional lenders including Comerica Inc., Zions and KeyCorp have a large percentage of variable-rate loans, which could lead to wider net interest margins as interest rates rise, said Mark Palmer, a New York-based analyst at BTIG LLC. Yields on 10-year U.S. notes rose the most since 2011 yesterday after Fed Chairman Ben S. Bernanke said that risks to the economy have decreased.

"We just haven't seen an increase in rates such as this for so long," Palmer said in a phone interview. "It's always been more of an interesting theory rather than something in practice. Now we're seeing it in practice."

Comerica Chief Financial Officer Karen Parkhill said this month that 85 percent of the Dallas-based company's loan portfolio comprises floating-rate products, which change along with interest rates. That can help widen net interest margins, the difference between what banks pay on deposits and receive for loans.

The biggest U.S. lenders fell amid investor concern that banking activity in emerging markets is slowing and as the third quarter, a seasonally slower part of the year, approaches, said Eric Wasserstrom, an analyst at SunTrust Robinson Humphrey Inc.

Citigroup, the third-largest U.S. bank by assets, tumbled the most in the 24-company KBW Bank Index, declining 3.3 percent. Charlotte, North Carolina-based Bank of America Corp. slid 2.3 percent, JPMorgan Chase & Co., the largest U.S. lender, fell 2 percent, and Wells Fargo & Co. retreated 1.4 percent.

"Every bank is going to benefit from a higher-rate environment," Wasserstrom said. "The guys who are considered relatively more rate sensitive generally outperformed today."

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