Revere Research Note to Clients: Better Visibility into Banking Sectors

Given the recent market volatility, Revere’s Research team wanted to remind our clients of the enhanced market visibility they can achieve with their Revere Research™ accounts. While credit weakening and tightening has extended into a broad market decline, Domestic Banks have experienced a steeper descent, declining over 10% in the past 3 months and over 16% since the beginning of the year.

However, closer inspection using Revere Research™ reveals that this decline hasn’t been consistent across geographic regions within the United States and adjacent regional markets. Commercial Banks within the West North Central region of the US (including Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota and South Dakota) have held up fairly well, declining only about 4% over the past 3 months and less than 7% YTD. 30 different banks make up this sector, 10 of which are Focused (e.g. make over 50% of their revenues from this sector) and 4 are Pure Plays (e.g. make almost all of their revenues from this sector). Participating banks include:

* UMB Financial Corp (Nasdaq GM: UMBF)
* West Bancorporation, Inc. (Nasdaq GM: WTBA)
* Commerce Bancshares, Inc. (Nasdaq GM: CBSH)
* Enterprise Financial Services Corp. (Nasdaq GM: EFSC)

Thrift Banks within this same region have done nearly as well.

One area of strength discovered has been on the international side. Latin American Banks (indicated in blue below) have shown strong results over the past year and have outperformed their domestic counterparts over the past 3 months.




28 different Latin American Banks comprise this Revere sector (Symbol: ^267355). 12 of them are Focused on this sector, and 4 are Pure Plays. Participating banks include:

* Credicorp Ltd. (Peru Focused) (NYSE: BAP)
* Corpbanca (Chile Pure Play) (NYSE: BCA)
* Bancolombia S.A. (Colombia Pure Play) (NYSE: CIB)
* Uniao de Bancos Brasileiros SA (Brazil Pure Play) (NYSE: UBB)

By comparison, Commercial Banks in Puerto Rico and Thrifts in California have shown considerable weakness.