CMA - Regional bank stocks jump as investors laud PacWest sale
2023-07-26 12:51:40 ET
Regional bank stocks spiked in Wednesday afternoon trading as the previously announced sale of troubled lender PacWest Bancorp ( NASDAQ: PACW ) to Banc of California ( NYSE: NAC ) is seen as a positive for the sector.
Overall, the Invesco KBW Regional Banking ETF ( NASDAQ: KBWR ) and the SPDR S&P Regional Banking ETF jumped 3.6% and 4.6% , respectively, although a wide gap still remains to be filled from before March's banking crisis.
Looking at individual names, PacWest ( PACW ) was the biggest gainer in the group, surging 26.3% . Other notable winners include: Western Alliance Bancorporation ( NYSE: WAL ) +11.1% , Metropolitan Bank ( NYSE: MCB ) +7.6% , Zions Bancorporation ( NASDAQ: ZION ) +6.6% , KeyCorp ( NYSE: KEY ) +6.9% , and Comerica ( NYSE: CMA ) +6.2% .
Perhaps the most positive read through from the PACW-BANC deal , Bank of America analyst Ebrahim Poonawala wrote, is how PACW common and preferred shareholders did not get wiped out, nor did the Federal Deposit Insurance Corporation have to intervene.
After three bank failures earlier this year, "a private market solution where shareholders and debt holders are getting paid marks a turn for the positive," Poonawala contended in a Tuesday note, noting that "no other bank comes close to the stress experienced by PACW."
"Assuming that the potential deal is well received by the markets, we think it could serve as a template for future deals," he added.
SA Quant system screens The Bancorp ( TBBK ) as the highest-rated regional bank stock , followed by Axos Financial ( AX ) and Mercantile Bank ( MBWM ).
More on regional banks:
- PacWest Bancorp: M&A Validates Our Bullish Call On The Preferred
- PacWest Bancorp Q2 results hurt by losses on loan sales
- Western Alliance Bancorp: A Downgrade Is In Order
- An Update On The Banking Crisis
For further details see:
Regional bank stocks jump as investors laud PacWest sale