We all know that the banking sector is extremely out of favor on wall street, but what on earth is going on in Ohio? Since I reside in Columbus, Ohio I thought I would take a brief look at this amazingly unloved group.
There are four major regional banks headquarted in the Buckeye state. The biggest of them from a market cap standpoint is Fifth Third Bancorp (Nasdaq:FITB). The second largest in the group is KeyCorp (NYSE:KEY). The third largest is National City Corporation (NYSE:NCC). The smallest of the big four is 
Huntington Bancshares (Nasdaq:HBAN).
Let's take a quick look at the performance of each of these stocks:
- KeyCorp- Shares have fallen 69% in the past year and 52% in the last month alone.
- Fifth Third- This stock has fallen 77% in the last year and 52% in the last month.
- Huntington- This stock has lost 77% in the last year and 45% in the last month.
- National City- This stock has plunged 85% in the last year and has lost 12% in the past month.
As you can see, the pain in the Buckeye state is extremely widespread. National City has fallen the hardest and was the first to fall because of their high amounts of exposure to risky mortgages. Fifth Third and Key have both warned of extensive write downs and cut their dividend by 60% and 50% respectively. Huntington just tonight announced that it expects 2008 chargeoffs to be at the high side of current expectations.
So why are the Ohio banks performing so badly? The most likely cause for this seems to be that the overall economy in the state is absolutely pathetic. The auto industry has deep ties in Ohio and southern Michigan, which many of these banks have a strong presence in as well. Also, some of the Ohio banks made big bets in the real estate market in Florida when things were going so well a few years ago. We know how that turned out and what a burden that is to them now. The broader economic forces in the state, combined with mismanagement by the banks themselves have led to this terrible state for the Buckeye banking group.
These four companies all have very valuable assets and some have been floated around as possible takeover targets. One thing is for sure, these banks have been hit extremely hard and the outlook is just as cloudy as ever.
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