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Regional bank stocks soared on Monday as investors were buoyed by reports that the recent strain on the sector could be abating, and the possibility of more government assistance on the horizon. Shares of First Republic (FRC) skyrocketed by 14%, helping to recuperate its hefty losses in March. PacWest Bancorp (PACW) and Western Alliance (WAL) saw their stocks rise by 4% and 5% respectively.
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The Monday developments followed indications that the turmoil facing regional banks in the United States might be on the mend. Bloomberg News reported that U.S. authorities are considering broadening the federal initiatives that would offer additional liquidity to banks, partly to help First Republic as it looks for a new owner. It was also a big day for First Citizens BancShares (FCNCA), whose stock soared 40% after announcing their acquisition of a substantial portion of SVB, including deposits and branches.
Why it matters
Regional bank stocks have been feeling the heat this month, with regulators shutting down SVB on March 10 and Signature Bank two days later due to significant withdrawals. The good news is that federal regulators have promised to reimburse those two banks' depositors, as well as give a financial boost to other banks.
