FHN - Regional bank ETFs sink as PACW WAL and FHN tank
2023-05-04 11:17:56 ET
The rout on regional banks continued on Thursday morning with shares of PacWest Bancorp ( PACW ), Western Alliance Bancorp ( WAL ), and First Horizon Corporation ( FHN ) down roughly 5 0% , 40 % , and 35% respectfully. As a result, they have pulled down with them the performance of multiple regional bank focused exchange traded funds.
Four funds in particular that are well into the red are the SPDR S&P Regional Banking ETF ( NYSEARCA: KRE ), iShares U.S. Regional Banks ETF ( NYSEARCA: IAT ), Invesco KBW Regional Banking ETF ( NASDAQ: KBWR ), and the leveraged Direxion Daily Regional Banks Bull 3X Shares ( NYSEARCA: DPST ).
Early on and shares of KRE have declined by 5.1% , IAT dropped 4 % , KBWR stumbled 3.1% and DPST plunged 13.8% .
Additionally, the latest banking fears have now sent these ETFs to roughly two and a half year trading lows. KRE trades near lows not seen since October 2, 2020, while IAT hovers near levels not experienced since May 15, 2020. KBWR finds itself trading at a point not noticed since November 9, 2020 and shares of DPST are at their lowest of all time.
Pressures continue to mount in the regional banking sector with PACW, WAL, and FHN falling following the recent First Republic Bank (FRC) take over by JPMorgan ( JPM ) and collapse of Silvergate Capital, Silicon Valley Bank and Signature Bank.
Seeking Alpha contributor Harrison Schwartz outlined that regional bank stocks continue to falter as banks began to report large deposit outflows and losses in their earnings report. Schwartz went on to state : "The overall degree of debt and debt-related issues in the financial system is more significant today than in 2008."
Bigger picture, over the course of 2023 KRE is -38.7% , IAT is -37.8% , KBWR fell 27.8% , and DPST collapsed by 81.6% .
More on the Regional Bank Crisis:
- Cathie Wood thinks regional bank fallout is accelerating
- With FRC's collapse, here are the top 10 regional bank stocks, ranked by SA Quant Ratings
- PacWest Leads Fresh Regional Bank Rout: What's Going On?
- Nelson Peltz warns more regional banks will fail unless deposit rules change - FT
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Regional bank ETFs sink as PACW, WAL, and FHN tank