Regional bank shares rebound after shock of Silicon Valley Bank failure
The share prices of a number of regional banks rebounded on Tuesday after taking a sharp fall following the failure of Silicon Valley Bank last week, showing a stabilization in the banking industry following a burst of panic from investors.
Shares for $First Republic Bank(FRC.US$ , a San Francisco-based firm with assets totaling over $212 billion, rebounded by nearly 27 percent on Tuesday afternoon, after its shares fell by over 60 percent on Monday. Phoenix-based $Western Alliance Bancorp(WAL.US$ , which was one of the worst performing banks on Monday, with a share price drop of 47 percent, rebounded by over 14 percent Tuesday.
Shares for $First Republic Bank(FRC.US$ , a San Francisco-based firm with assets totaling over $212 billion, rebounded by nearly 27 percent on Tuesday afternoon, after its shares fell by over 60 percent on Monday. Phoenix-based $Western Alliance Bancorp(WAL.US$ , which was one of the worst performing banks on Monday, with a share price drop of 47 percent, rebounded by over 14 percent Tuesday.
Three other notable regional banks — New York-based Metropolitan Bank, $PacWest Bancorp(PACW.US$ in Los Angeles and Memphis-based $First Horizon National(FHN.US$ — all saw bumps in their stock prices on Tuesday after drops on Monday.
$Metropolitan Bank(MCB.US$ ’s price jumped by nearly 10 percent after falling by almost 44 percent, $PacWest Bancorp(PACW.US$ had a price jump of almost 34 percent after a 21 percent slide and $First Horizon National(FHN.US$ saw a modest 1.6 percent increase after its price slipped by 20 percent.
$Metropolitan Bank(MCB.US$ ’s price jumped by nearly 10 percent after falling by almost 44 percent, $PacWest Bancorp(PACW.US$ had a price jump of almost 34 percent after a 21 percent slide and $First Horizon National(FHN.US$ saw a modest 1.6 percent increase after its price slipped by 20 percent.
The price rebounds came after the banks and federal government took steps to ensure depositors and investors that the state of the banking industry was strong. Federal regulators backstopped all uninsured deposits at $SVB Financial(SIVB.US$ , going far beyond the Federal Deposit Insurance Corporation’s legal commitment of insurance for deposits of up to $250,000.
The step to backstop all deposits at the bank using a federal insurance fund was meant in part to quell fears that depositors would rush to pull their money from mid-sized and regional banks and place it in larger and more secure large Wall Street funds.
The relative bounces of the stock prices for the banks also comes as $Moody's(MCO.US$ ’s Investor Service announced Monday that it was eyeing a possible rating downgrade of six U.S. banks, including First Republic Bank and Western Alliance Bancorp.
The relative bounces of the stock prices for the banks also comes as $Moody's(MCO.US$ ’s Investor Service announced Monday that it was eyeing a possible rating downgrade of six U.S. banks, including First Republic Bank and Western Alliance Bancorp.
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