Shares of regional banks saw a boost on Wednesday as PacWest Bancorp, one of the hardest-hit banks earlier this year, agreed to be acquired by Banc of California. This development suggests that the aftermath of bank failures may finally be receding.
According to KBW analyst Christopher McGratty, the acquisition price of $9.60 per share is higher than many estimates, making the resolution a net positive for the banking sector.
The SPDR S&P Regional Banking exchange-traded fund (KRE) experienced a 3.8% increase, with 136 out of 139 equity components moving into positive territory. The KBW Nasdaq Bank Index (BKX) also advanced by 1.9%, while the Financial Select SPDR ETF (XLF) moved up by 0.4%. The Ivesco KBW Bank Index (KBWB) saw a similar increase of 1.9%.
Individually, PacWest Bancorp rallied by a significant 28% following the announcement of its acquisition by Banc of California. In turn, Banc of California’s stock rose by 0.4%.
Other banking institutions also experienced positive movement in response to this news. Western Alliance Bancorp gained 10.3%, East West Bancorp Inc. moved up by 4.7%, First Horizon Corp. rose by 5.7%, Citizens Financial Group Inc. saw a 4.2% increase, Zions Bancorp moved up by 6.5%, and Comerica Inc. advanced by nearly 7%.
Lastly, KeyCorp rose by a notable 7.7%, and Metropolitan Bank Holding Corp. also went up by 4.7%.
