Bank stocks fell with the broad market Tuesday, but shares of smaller regional and community banking companies managed to outperform.
West Coast banks did particularly well, in part because of fresh takeover speculation, traders said.
Columbia Banking System Inc. of Tacoma rose 5.2%; Westcorp Inc. and its subsidiary WFS Financial Inc. of Irvine, Calif., rose 4.4% and 3.7% respectively; and Umpqua Holdings Corp. of Portland, Ore., rose 2.5%.
Greater Bay Bancorp of Palo Alto, Calif., which soared 5% Monday after rumors that it had hired Sandler O’Neill & Partners LP to help the banking company sell itself, was one of the biggest losers among bank and financial stocks on Tuesday, falling 2.7%.
A Greater Bay spokesman would not comment on the rumors. Sandler O’Neill downgraded the stock on Monday to “hold” from “buy,” citing the spike. On Tuesday, Sanders Morris Harris Inc. of Houston also cut the stock to “hold” from “buy.”
Gold Banc Corp. of Leawood, Kan., fell 3.8%, to $13.45. It announced late Monday that it had rejected a reduced buyout offer from Silver Acquisition Corp.
Shares of Sandy Spring Bancorp of Olney, Md., hardly suffered after the company announced it had fired chief financial officer James H. Langmead. Sandy Spring gave no reason for the move. Its stock fell 0.8%.
The American Banker index of 225 banks fell 0.1% and its index of the top 50 banks 0.2%, as did the Standard & Poor’s 500. The Nasdaq bank index and the index of banks in the S&P 500 remained unchanged.
Earnings dominated parts of the market. Shares of State Street Corp. of Boston, which announced that its third-quarter profit fell 12%, fell6.1%. M&T Bank Corp. of Buffalo beat analyst expectations despite unspectacular loan growth; its stock rose 1.9%, closing above $100 for the first time since its 10-for-one stock split in 2000.
Lehman Brothers analyst Faye Elliott-Gurney initiated coverage for five regional banking companies, giving a rating of “equal weight” to three of them: Commerce Bancorp Inc. of Cherry Hill, N.J., United Bankshares Inc. of Charleston, W.Va., and Wilmington Trust Co. of Delaware. Mercantile Bankshares Corp. of Baltimore got an “overweight” and Fulton Financial Corp. of Lancaster, Pa., an “underweight.”
Commerce, which reported third-quarter earnings that beat analyst expectations, rose 0.7%. Fulton rose 0.2% and Mercantile rose 0.9%. United’s stock was unchanged. Wilmington Trust fell 0.6%.
