First Republic stock drags down PacWest and other regional bank stocks
First Republic Bank fell nearly 30% in Tuesday trading, dragging other regional banks with it.
The trigger for First Republic (ticker: FRC) was its first-quarter earnings report, which revealed the extent of its deposit losses.
The stock is on pace for its biggest drop since March 20, when it fell 47%, and at $11.25 is now close to…
First Republic Bank fell nearly 30% in Tuesday trading, dragging other regional banks with it.
The trigger for First Republic (ticker: FRC) was its first-quarter earnings report, which revealed the extent of its deposit losses.
The stock is about to fall the most since March 20, when it fell 47%, and at $1[ads1]1.25 it is now near an all-time low.
Results released after the bell on Monday showed the lender had to borrow at high interest rates from the Federal Reserve and others to cover massive outflows. While the jitters surrounding bank stocks have largely subsided after the failures of Silicon Valley Bank and Signature Bank, First Republic’s report threatens to shake confidence once again.
The concern is that other regional banks may face similar funding problems. Northern Trust ( NTRS ) was down more than 9% in recent trade, the second worst performer on the
S&P 500
on Tuesday and headed for its worst percentage drop since March 16, 2020.
The SPDR S&P Regional Banking Exchange Traded Fund ( KRE ) was down 2.3% in recent trading. PacWest Bancorp (PACW) was down 4.3%. Western Alliance Bancorp ( WAL ) fell 4%, and Zions Bancorp ( ZION ) fell 3.2%.
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KeyCorp ( KEY ) fell 4.6%, and Comerica ( CMA ) fell 4.2%.
Regional banks have generally reported mixed results for the first quarter. Western Alliance managed to beat expectations last week, but Zions and KeyCorp fell short.
Over in Europe, UBS Group ( UBS ) reported a sharp drop in profits after agreeing to buy rival Credit Suisse Group ( CS ) in a government-brokered deal as it faced collapse last month. UBS’s American Depository Receipts were down 3.4%.
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Write to Brian Swint at brian.swint@barrons.com
