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Short sellers tend to go against the tide, making investments based on a belief that a particular stock is going to tank. Banks are often prime targets, given the cyclical nature of the business, inherent risks involved and external pressure from investors and regulators.

Given the strong runup in financial shares over the past year — the Financial Select Sector Fund (XLF) is up 14% over the past year — clients may be looking to short bank stocks. Advisors can help them by explaining why some banks are bigger targets than others. Reasons can include their growth strategies, M&A appetite and overall risk profile.

Some banks are bigger targets than others for a variety of reasons including their growth strategies, M&A appetite and overall risk profile. FIG Partners and S&P Global Market Intelligence recently conducted a study of publicly traded banks, highlighting 10 institutions with unusually high short-selling activity as of February 28.

For each institution flagged in the study, the short interest exceeded 5% of total outstanding shares at the end of February. The median level of short interest, or the number of shares sold “short” for the more than 125 banks in FIG Partners’ coverage, was 1.24%, which represented a decrease from 2.52% a year earlier.

American Banker recently spoke with Christopher Marinac, director of research at FIG Partners, to understand why certain investors are betting against these banks. Here is a look at those institutions, along with possible reasons for their short interest.