Western Alliance leads regional bank stocks higher
Western Alliance () led other regional bank stocks higher Wednesday morning after telling investors that its deposits rose again last week.
The Phoenix-based lender said deposits as of May 12 were $47.6 billion, up $2 billion from the end of the first quarter and up from $200 million from its last update provided May 8. Its stock rose as much as 11% during morning trading.
Western Alliance was among the lenders that came under intense pressure following the March failures of Silicon Valley Bank and Signature Bank.
It lost 11% of its net deposits during the chaos of the first quarter, including $8 billion the Monday following the seizures of Silicon Valley Bank and Signature.
Other regional banks that received scrutiny during the first quarter also rallied. Beverly Hills, California based PacWest () was up more than 10%, while Zions (ZION) was up more than 7%. KBW (), an index tracking large and regional US banks rose more than 2%.
“It’s not over until it’s over,” Tematica Research Chief Investment Officer said Wednesday on Yahoo Finance, speaking about the 2023 banking crisis. “It’s going to take time to vet all of this out.”
Several big-name investors disclosed this week that they bet on regional banks during the first quarter, providing another boost to the sector.
They include Michael Burry, who is well known for shorting subprime mortgages during the 2008 financial crisis.
Burry’s hedge fund Scion Asset Management bought $23.4 million in banks, including Western Alliance, PacWest, Columbus, Ohio based Huntington Bank () and First Republic. First Republic failed on May 1 and the bulk of its operations was sold to JPMorgan Chase.
David Einhorn’s Greenlight Capital also bought $42.5 million in First Citizens Bank (FCNCA) and New York Community Bank (NYCB), betting on the lenders that purchased assets of Silicon Valley Bank and Signature following government seizures.
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