智通财经网·2025-10-17 12:57Core Viewpoint - Investors are concerned about a significant sell-off in the regional banking sector in the U.S., particularly affecting Zions Bancorp and Western Alliance Bancorp due to credit troubles, leading to a sharp decline in their preferred stocks [1][2] Group 1: Market Reaction - Zions Bancorp's preferred stock fell sharply, marking its largest drop since May 2023, reaching an 18-month low; Western Alliance's preferred stock also saw significant declines [1][5] - The sell-off was exacerbated by the disclosure of fraud in loans to distressed commercial mortgage funds, causing a 10% drop in the common stock of these banks [1][2] - The benchmark index tracking regional banks experienced its second-worst trading day since the collapse of Silicon Valley Bank in March 2023 [1] Group 2: Credit Quality Concerns - Zions Bancorp reported a $60 million provision for two loans and wrote off $50 million, which is about 5% of its expected earnings for 2025, highlighting ongoing credit quality issues [2] - The recent fraud cases, including those involving Tricolor Holdings and First Brands Group, have raised alarms about the credit quality across the sector, leading to heightened caution among investors [2][3] - Goldman Sachs noted that the market's reaction to a single borrower's disclosure seems excessive, but the accumulation of bad news has led to a sell-off mentality [2] Group 3: Preferred Stock Performance - Preferred stocks of smaller regional banks have been disproportionately affected, with Zions Bancorp's 4.819% perpetual preferred securities dropping 6.36% to $20.38, and Western Alliance's 4.25% preferred securities falling 2.87% to $20.83 [5][6] - In contrast, the preferred stocks of larger banks remained stable, indicating a divergence in market sentiment between large and small banking institutions [6][9] - The ongoing crisis has led to a significant sell-off in small lending institutions, while the preferred stocks of the "Big Six" banks have shown resilience [9]