Magazine article American Banker

Small Banks' Stocks, Spurned by Investors, Seen Due for Upswing

Magazine article American Banker

Small Banks' Stocks, Spurned by Investors, Seen Due for Upswing

Article excerpt

ORLANDO -

Analysts specializing in stocks of small banks and thrifts are making no excuses for their battered sector.

"We're not in the right place at the right time,'' said Benjamin A. Plotkin, chief executive officer at Ryan, Beck & Co., a Livingston, N.J., securities firm. "We have a market that likes large-cap, high-growth stocks.''

Nonetheless, Mr. Plotkin and two other bank stock experts who spoke this week at the annual conference of America's Community Bankers say there are signs that small regional and community banks and savings institutions will fare better in 2000.

"I see a 10% to 15% appreciation for the group over the next year. We're putting money into the group,'' said Joseph A. Stieven, director of financial institutional research for Stifel, Nicolaus & Co., a St. Louis securities firm.

Smaller financial institutions have been outmatched by large banks and the general market. All three groups suffered during the big summer 1998 selloff, but large banks and the broader market rebounded and small banks have languished.

The American Banker index of the 50 largest banks and the Standard & Poor's 500 are both up 10% this year through Nov. 2, while the Nasdaq bank index -- a good measure of small-bank activity -- has lost a percentage point.

Experts attribute the poor share-price performance to a marked decline in bank and thrift takeovers in the past year and, as Mr. Plotkin noted, investors' continued fascination with large-capitalization technology-oriented companies. …

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