Last night after the close, David Gaffen of The Wall Street Journal's Marketbeat blog mused about the next pocket of weakness in the financial sector. Yesterday's pullback in the group largely spurred by concerns about Citigroup (C), which hit a 5-year low impacted the likes of Huntington Bankshares (HBAN), Citizens Republic (CRBC), and Fifth Third (FITB).

By the close of yesterday's trading, All three were near 52-week lows as a result, and implied volatility on the options in those names was noticeably higher, suggesting more investors are concerned about these names as the credit crunch continues to unfold. Paul Foster, a strategist with, points out that smaller, regional banks enjoy the bread-and-butter business of CDs, home loans, and car loans. If three or four have issues in this group, Foster notes, it's going to be prevalent throughout the sector.

Citigroup shares have bounced higher today as news of a Middle Eastern bailout has temporarily quelled the bleeding in the shares. After a strong start out of the gate (C was up nearly 3.9% earlier today), the stock has retreated somewhat and is currently showing a gain of 1.2%.

Meanwhile, the ISE U.S. Regional Banks Index (JLO) has gained nearly 2.8% today, as equities rise in sympathy with their larger peer. HBAN shares are 2.3% higher today, CRBC is up 3.7%, and FITB has gained 3.5%.