What could be worse than being a bank stock or an oil stock on a day when both sectors are getting crushed? Being a bank with heavy ties to the energy sector.
Shares of Dallas-based Comerica (CMA) and Texas Capital Bancshares (TCBI) are down 19% and 23% respectively. San Antonio's Cullen/Frost Bankers (CFR) and Houston's Cadence Bancorp (CADE) plunged 22% and 28%.
And three other small regional banks -- Tulsa's BOK (BOKF), Lafayette, La.-based IBERIABANK (IBKC) and Hancock Whitney (HWC) of Gulfport, Miss. -- all plummeted more than 20% as well. All seven of these banks have between 4% and 18% of their loans tied up in the energy sector.
The rapidly falling price of oil is likely to put more pressure on energy companies in the United States, which will hurt the banks with the most credit exposure to the oil industry, according to CFRA Research analyst Pauline Bell.
Bell has a "sell" rating on Comerica, which has 4% of its loan book tied to oil companies, and Cullen/Frost, where 11% of its net loans are to energy firms.
"We see the oil & gas industry remaining distressed in 2020, with bankruptcies likely to rise during the year," Bell said in a report, noting that these banks' "less diversified loan portfolios expose them to falling energy prices and volatility in the oil & gas business."
That will "more than likely crimp" their revenue and earnings outlooks for both this year and 2021, Bell said, adding that "we view this as a recipe for disaster amid current sluggish demand."