Bank Stocks: First Republic Leads Five Banks Rising Tuesday

Bank stocks jumped into an uneven rebound Tuesday, continuing to swing wildly as regulators work to shore up the financial sector. First Republic Bank (FRC) led the morning movers after shares nearly halved Monday. Overseas, Deutsche Bank (DB) climbed following the UBS (UBS) deal to buy Credit Suisse. Here are the fastest-moving bank stocks heading into trading Tuesday.

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Yellen Speaks At ABA Summit

Meanwhile, Treasury Secretary Janet Yellen released prepared remarks for the American Bankers Association’s Washington Summit on Tuesday, saying that the government was ready to provide additional deposit guarantees in the event that the banking situation worsens.

“The steps we took were not focused on aiding specific banks or classes of banks,” the statement said. “Our intervention was necessary to protect the broader U.S. banking system. And similar actions could be warranted if smaller institutions suffer deposit runs that pose the risk of contagion.”

Yellen will address the ABA at the gathering in Washington, D.C., at 10 a.m. ET.

Bank Stocks Poised To Climb

First Republic Bank spiked 25% early Tuesday, following Wall Street Journal reports Monday that JPMorgan (JPM) CEO Jamie Dimon is leading discussions for a new rescue plan. First Republic received a $30 billion deposit from America’s 11 largest banks on Friday. Dimon and fellow CEOs are mulling converting some or all of the $30 billion in deposits into a capital infusion. A sale or outside capital injection are also being considered. On March 12, First Republic secured $70 billion in additional liquidity from JPMorgan and the Federal Reserve.

PacWest Bancorp (PACW) is on track for its second day of gains, rising 12.5% premarket Tuesday after its 11% jump Monday. The Los Angeles-based bank provided a liquidity update Friday, reporting it “continues to have solid liquidity,” with over $10.8 billion in available cash.

UBS Group jumped 7% Tuesday and climbed Monday following its Credit Suisse acquisition. Swiss regulators brokered a deal on Sunday for UBS to buy the fellow Swiss banking giant for 3 billion Swiss francs, equating to $3.24 billion. The combined institution will have more than $5 trillion in assets invested globally.

The Swiss National Bank provided a $108 billion liquidity-assistance loan to UBS to facilitate the deal. And the government pledged $9.7 billion to backstop losses as part of the takeover. Meanwhile, Germany’s Deutsche Bank (DB) rose 6.4% Tuesday morning as European banks breathed a sigh of relief.

New York Community Bank (NYCB) rose 5.6% Tuesday morning and ran 6.5% higher before the opening bell. NYCB stock skyrocketed nearly 32% Monday after the FDIC announced a deal to sell substantially all of Signature Bank’s deposits to New York Community’s subsidiary Flagstar Bank on Sunday.

Regionals Rise

Phoenix-based Western Alliance (WAL) climbed with regional banks early Tuesday morning, rising 9.4% to reclaim its losses from Monday.

U.S. Bancorp (USB) stock rose 4.9% Tuesday morning after receiving a rating improvement. On Monday, Baird upgraded its rating on U.S. Bancorp to outperform from neutral with a 52 price target. Analyst David George called U.S. Bancorp a “high-quality regional bank with little to no downside and (about) 50% upside over time.”

You can follow Harrison Miller for more stock news and updates on Twitter @IBD_Harrison

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