Investors curious about which bank will raise capital next, Wells Fargo says
18/11/2024 11:38
** Regional lenders Dime Community Bancshares DCOM.O ,
Valley National Bancorp VLY.O , and Associated Banc-Corp
ASB.N have raised capital in recent weeks after a Trump-fueled
rally in bank stocks
** Investors are asking, "Who's next?", says the brokerage
** The three lenders priced their stock offerings at a
discount in the range of 6%-7% to their closing prices
** Wells Fargo Securities says common thread is the ongoing
accumulated other comprehensive income (AOCI) issue; AOCI
captures the change in the value of banks' securities portfolios
** Banks' AOCI has been under close scrutiny after rapidly
rising interest rates led to a surge in unrealized losses on
their bond portfolios
** Wells Fargo notes DCOM and VLY also have commercial real
estate issues, which remain a point of emphasis for regulators
** Brokerage singles out regional lenders Provident
Financial Services PFS.N , Fulton Financial FULT.O , Community
Financial System CBU.N , and Merchants Bancorp MBIN.O as
potential candidates who could raise capital next
** DCOM and ASB shares have jumped 25.1% and 24.4%,
respectively, while VLY has fallen 6.2% YTD
(Reporting by Arasu Kannagi Basil in Bengaluru)
((ArasuKannagi.Basil@thomsonreuters.com;))