NEW YORK, NY--(Marketwire -06/14/12)- After posting their best first quarter in five years the U.S. Banking Industry has begun to falter as the euro-zone debt crisis deepens. The SPDR KBW Bank ETF (KBE) has fallen nearly 8 percent over the last month, while the SPDR KBW Regional Banking ETF (KRE) dropped close to 7 percent over the same period. The Paragon Report examines investing opportunities in the Regional Banking Industry and provides equity research on KeyCorp (KEY) and Synovus Financial Corp. (SNV).
The Federal Deposit Insurance Corp. (FDIC) will be joining the Federal Reserve in proposing stricter capital rules to help prevent another financial crisis. Under the new rules proposed by the FDIC the minimum capital held by U.S. banks, to help cushion the blow from unexpected losses, will increase from 2 percent to 7 percent. U.S. banks, which nearly all already meet the criteria, have lobbied against the proposals, arguing that setting aside that much capital would limit their lending abilities. "We are taking important steps toward enhancing the safety and soundness of the U.S. financial system," said U.S. Comptroller of the Currency and FDIC member Thomas Curry.
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KeyCorp is one of the nation's largest bank-based financial services companies, with assets of approximately $87 billion. KeyCorp reported first quarter net income from continuing operations attributable to Key common shareholders of $199 million. This result compares to $184 million for the first quarter of 2011.
Synovus is a financial services company with more than $27 billion in assets. Synovus' bank divisions provide commercial and retail banking, investment and mortgage services to customers in Georgia, Alabama, South Carolina, Florida and Tennessee. Net income available to common shareholders was $21.4 million for the first quarter of 2012, compared to net income of $12.8 million in the fourth quarter of 2011 and a net loss of $93.7 million in the first quarter of 2011.
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