Stocks: Bank Stocks Are Buoyed By Decline in T-Bill Yield As Market

Bank stocks recovered Friday after the yield on the 30-year Treasury bond fell below 7%.

The banking sector was one of the few to stay above water, as concerns over corporate profits continued to drag down the equity markets. The Standard & Poor's 500 index inched up 0.08%, while the S&P bank index rose 0.59%.

The recent declines in the equity markets have brought new money into fixed income investments. Sectors, such as banking, that are viewed as interest rate sensitive were among the day's few strong performers.

Leading the bank gainers were CoreStates Financial Corp., which jumped 75 cents to $37.75; Fifth Third Bancorp., which jumped $2.25 to $52.75; and Citicorp, which jumped $1 to $77.25.

NorthFork Bancorp shares rose 3.77% to $27.50 after Keefe, Bruyette & Woods Inc. reiterated its buy rating on the stock.

Shares of Metropolitan Bancorp rose $3.56 to $16.93 after the company agreed to be bought by Washington Federal Inc. Shares of Washington Federal rose $1.06 to $21.125.

Two major regional banks announced substantial share repurchase plans on Thursday.

Mercantile Bancorp., St. Louis, announced it would buy back up to 6 million common shares, or 9.6% of its common shares outstanding, in the next year.

Mercantile said it would reissue 1.3 million of those shares as part of its pending purchases of three community banks. The bank expects to buy back the shares through open-market purchases and negotiated transactions.

Meanwhile, Crestar Financial Corp., Richmond, Va., will buy back up to 3.4 million of its shares, or 8% of its common shares outstanding.

Crestar earlier this year approved a buyback program of up to one million shares. The bank expects to repurchase all the shares involved over the next 18 months in the open market.

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