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Shorts Crowding Into Texas Banks Bet Energy Pain Isn't Over

Corrected

With energy stocks enjoying the biggest rebound since the beginning of the oil rout, short sellers have shifted their sights to regional banks that do business with the industry.

Bearish bets have shot up 35 percent on average this year among the 10 most-shorted stocks in the KBW Regional Banking Index, data compiled by Bloomberg and Markit show. Cullen/Frost Bankers Inc. and Prosperity Bancshares Inc. in Texas have seen short interest surge about 60 percent. The banking gauge added 0.5 percent at 4 p.m. New York time.