Regional-bank stocks add to gains on Fed move and after PacWest deal suggests stabilization in sector
By Steve Gelsi
PacWest deal marks a 'net positive for the banking sector,' analyst says
Regional-bank stocks rose Wednesday as hard-hit PacWest Bancorp agreed to be acquired by Banc of California in a sign that the hangover from bank failures earlier this year may be receding.
"The implied take out price of $9.60 is higher than many estimated, with '[PacWest] resolution' a net positive for the banking sector," KBW analyst Christopher McGratty said in a research note.
Gains for regional-bank stocks widened after the Federal Open Market Committee raised its benchmark rate by a quarter point, as expected, and reiterated its objective of fighting inflation. The decision puts rate at a range of 5.25%-5.5%.
Also read:Fed raises interest rates to 22-year high, signals it is prepared to do more
The SPDR S&P Regional Banking exchange-traded fund (KRE) moved up by 5%, after rising 4% prior to the Fed's move.
The KBW Nasdaq Bank Index advanced by 2% and the Financial Select SPDR ETF (XLF) moved up by 0.5%. The Invesco KBW Bank Index (KBWB) advanced by 1.9%.
Among individual names, PacWest Bancorp (PACW) rallied 25% after it agreed to be acquired by Banc of California Inc. (BANC). Banc of California's stock dipped 0.3%.
Western Alliance Bancorp. (WAL) gained 11.5%, East West Bancorp Inc. (EWBC) moved up by 6.9%, First Horizon Corp. (FHN) rose 4.9%, Citizens Financial Group Inc. (CFG) rose 4.2%, Zions Bancorp (ZION) moved up by 7.3% and Comerica Inc. (CMA) advanced by 6.3%.
KeyCorp (KEY) rose 7.4% and Metropolitan Bank Holding Corp. (MCB) went up by 6.2%.
-Steve Gelsi
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07-26-23 1531ET
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