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Big hopes for small banks as Republicans take D.C.

'The rally will slow down' but won't falter: Peters

Shares of Beneficial Bank (Philadelphia), Malvern Federal and WSFS Bank (Wilmington) are all up a few dollars a share this month, on hopes the Republicans in Congress will team with President Trump to ease lending restrictions that bankers complain have made it expensive to finance small-business clients since the 2008 banking crisis and 2010 Dodd-Frank reform law.

"Community bank stocks have been skyrocketing since the election, due to the perception that the regulatory environment will ease up, that interest rates will rise due to greater inflation (from Trump's promised) infrastructure spending and tax cuts, and that the economy will pick up," Ted Peters, veteran Pa. bank CEO, head of Bluestone Capital Management and a principal in its Financial Institutions Fund, tells me.

"The rally will slow down but we believe community bank stocks will stay strong through 2017 and 2018," Peters concluded. He's hopeful about the three listed above, plus Royal Bancshares (Narberth) and Sun National (Mount Laurel), which are up more modestly.