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According to Market Intelligence, April 2023

Monday's Bank Stocks: Rally falters as valuations stretched

With little news or speculation to buoy equity markets Monday, Dec. 12, investors cashed out of stretched valuations.

The SNL U.S. Bank Index fell 1.53% to 531.58 and the SNL U.S. Thrift Index dropped 1.48% to 968.47. The S&P 500 slipped 0.11% to 2,256.96 and the Nasdaq composite index decreased 0.59% to 5,412.54 but the Dow Jones Industrial Average ticked up 0.20% to 19,796.43.

Investors that pushed up valuations after the election of Donald Trump took a breather following movement in the oil market and ahead of the Federal Open Market Committee meeting, said Frank Ingarra Jr., senior vice president and head trader at NorthCoast Asset Management LLC. He pointed out that market sentiment has been increasingly positive in the last few weeks but that little has changed in the economy outside of the election.

"The things that ran the hardest in the short-term after the election are probably suffering the most today," he said. "We're seeing valuations stretched, so [NorthCoast has] raised a bit of cash in our portfolios. ... We're not going to 100% cash but I would probably say over the last week, we went from 90% invested to 80%."

JPMorgan Chase & Co. declined 0.89% to $84.73, Bank of America Corp. sank 2.08% to $22.61, Citigroup Inc. declined 0.82% to $59.55, and Wells Fargo & Co. tumbled 2.38% to $55.78.

Prudential Financial Inc. is being sued by three former managers who were fired by the company after they pressed to further investigate insurance transactions sold through Wells Fargo. An internal review allegedly revealed Wells Fargo employees may have signed up certain clients for Prudential insurance without their authorization.

San Francisco-based First Republic Bank announced Dec. 12 that it acquired Gradifi Inc., a student loan repayment technology platform. The terms of the transaction were not disclosed. First Republic lost 0.99% to $88.16.

1st Source Corp. ticked up 0.81% to $43.69, Republic First Bancorp Inc. increased 1.27% to $7.95 and Farmers Capital Bank Corp. rose 3.79% to $38.35. Independent Bank Group Inc. lost 4.24% to $62.10, Carolina Financial Corp. tanked 6.34% to $28.65 and WashingtonFirst Bankshares Inc. declined 4.82% to $26.67.

In the thrift space, Riverview Bancorp Inc. increased 2.14% to $6.69 and OceanFirst Financial Corp. added 1.54% to $27.65, while TrustCo Bank Corp NY lost 3.95% to $8.50.

Market prices and index values are current as of the time of publication and are subject to change.