The stock price of First Republic Bank cratered on Monday despite its attempts to quell investor fears after the sudden collapse of Silicon Valley Bank and Signature Bank.
The stocks of other regional banks also took a hit Monday, including Zions, Pacific West and Western Alliance. More than a dozen regional banks had their trading halted Monday after prices continued to free fall following the seizure by regulators of Silicon Valley Bank and New York's Signature Bank.
Analysts at Bank of America said they"expect regional bank stock volatility to remain challenging in the short run as investors recalibrate the risk-reward" in the coming days. "The events of the last few days are likely to worsen the funding cost pressure that the industry was already facing," they said in a report."No bank is immune, but this pressure will likely be most pronounced among banks with a larger mix of rate sensitive customers."
Regional lenders that saw falling stock prices Monday are unlikely to collapse the way SVB did because"most large and regional banks have much more diversified deposit bases," Solita Marcelli, the chief investment officer at UBS, said in a research note.
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