Fifth Third Bancorp (NASDAQ: FITB) shares fell to a two-and-a-half-month low, a day after the Midwestern bank disclosed its commercial loan accounting was being investigated by U.S. securities regulators.
Fifth Third said in its annual report on Monday that it is under investigation by the U.S. Securities and Exchange Commission for how it accounted for and reported some of its commercial loans.
"Investors don't associate the SEC with good tidings, and I think people are looking at this for a worst case scenario," said Matt McCormick, a portfolio manager at Cincinnati-based Bahl & Gaynor Investment Counsel.
The bank said the SEC made several requests for information, including issuing a subpoena to the bank.
Fifth Third said the probe could lead to an enforcement action, which "may result in one or more such material adverse consequences."
Cincinnati-based Fifth Third's shares declined 5% to $13.88 in Tuesday morning trading. The stock was decline outpaced the KBW Bank Index's 1 percent decline, and it was the most traded stock on the Nasdaq Stock Exchange.