NEW YORK (CNNMoney) — Investors may be able to find some big bargains while betting on smaller regional banks.
Financial stocks are in the midst of a 2012 comeback, but shares of regional banks haven’t enjoyed the same surge as their larger peers. While Keefe Bruyette & Woods’ large bank index (BKX) is up more than 26% in 2012, its regional bank index (KRX) is up about 15.5%.
Still, analysts say it could be time for the stocks of regional banks to shine.
Several hundred banks closed or were taken over by the FDIC since 2008. The remaining community and regional banks are a healthier bunch and are well positioned to benefit from the nascent uptick in demand for consumer and business loans.
“So many banks went belly up during the crisis that the regional and community banks that are left are in much stronger condition to pick up market share now that lending is picking up,” said Scott Siefers, head of equity research at Sandler O’Neill.
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