The regional banking sector got a much-needed boost Wednesday on news that Western Alliance Bancorp’s deposit levels are on the rise.
The bank said deposits had grown by more than $2 billion since the end of the first quarter, as of May 12. That was enough for Bank of America Global Research to resume its coverage of the lender with a Buy rating and a $42 price target.
Shares of Western Alliance surged more than 14% higher to $36.10.
BofA Global Research said Western Alliance’s business model "was more resilient than perceived,” noting that 79% of the bank’s deposits were currently insured, compared to 68% as of March 31.
That went a long way to assuage investor concerns across the sector.
PacWest Bancorp stock jumped 22%, Comerica (NYSE:CMA) Incorporated and Zions Bancorp shares each rose 11% and KeyCorp (NYSE:KEY) shares added more than 7%.
Additionally, deposit flows at US banks rose to $17.16 trillion in the week ended May 3 — the first such increase in four weeks.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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