Regional Banks Seen as Winners from Republican Takeover

Regional banks are mildly higher Wednesday as the Republicans takeover of the Senate and gains in the House are seen as a positive for the sector.

Broadly, as represented by ETF SPDR S&P Regional Banking ETF (NYSE: KRE), the sector is up 0.35%. Meanwhile individual moves include: Comerica Inc. (NYSE: CMA) (+0.8%), Huntington Bancshares (NASDAQ: HBAN) (+0.7%), BB&T (NYSE: BBT) (+0.2%), Fifth Third (NASDAQ: FITB) (+1.7%), Regions Financial (NYSE: RF) (+1%), SunTrust (NYSE: STI) (+1%), and Zion (NASDAQ: ZION) (+0.6%).

FBR Capital's Benjamin Salisbury sees Republicans supporting changes to the Dodd-Frank Act that will reduce the regulatory burden to community banks.

Compass Point's Isaac Boltansky said, "We remain confident that there will be a push for a targeted regulatory relief bill in 2015 which, if successful, would likely raise the $50 billion SIFI asset threshold. If the SIFI threshold was raised, several regional banks would benefit from reduced expenses, there would be increased flexibility to return capital to shareholders, and banks could become more acquisitive"

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