The three banks have the largest market share in Virginia, with SunTrust leading with a 13.8 percent share, followed by First Union and Bank of America. As a sector, bank stocks grew 9.3 percent in 2000, according to a market capitalization-weighted average of all publicly traded companies in the industry, compiled by Media General Financial Services. Banks faced an increasingly difficult environment last year with interest rates rising three times. It didn't help that the three major hitters in the Richmond area warned that earnings would fall short of analysts' expectations last year. Then in January, banking woes heightened with news that some of the largest companies, including Bank of America, First Union and Wachovia Corp., were among the top 10 banks with the most exposure to corporate loans at risk of default.
Corporate loans are multimillion-dollar loans so large that more than two lenders are needed.
But the weakening is expected to lead to slower growth in loans and fee income as well as higher nonperforming assets.