Western Alliance lead upswing in regional bank stocks; Wedbush upgrades bank to outperform

Western Alliance Bancorp
WAL,
-0.94%
is rallying by 19.5% in premarket trades on Wednesday after the regional bank said it added $2 billion in deposits from March 31 to April 14. “While we experienced elevated net deposit outflows immediately following the closure of other banks, deposit balances quickly stabilized,” the bank said. Western Alliance stock has been hard-hit in recent weeks after the collapse of Silicon Valley Bank on jitters about a run on deposits. After the closing bell on Tuesday, Western Alliance also reported first-quarter earnings of $1.28 a share, below the analyst estimate of $1.95 a share. It also took an after-tax net non-operating charge of $109.7 million related to balance-sheet repositioning including the sale of some assets and loan reclassifications. Wedbush upgraded the stock to outperform and added it to its best ideas list. “Our outperform rating is based on our expectation that the company should be able to successfully navigate through this turbulent time given its high level of insured deposits (73%), solid outlook for deposit growth, and prudent liquidity measures,” said analyst David J. Chiaverini. “Given this backdrop, we believe WAL’s valuation is compelling.” Wedbush also added New York Community Bancorp Inc.
NYCB,
-0.77%,
M&T Bank Corp.
MTB,
+0.06%
and Regions Financial Corp.
RF,
-1.27%
to its best ideas list. The regional banks are up in pre-market trades. Zions Bancorp
ZION,
-1.52%
and First Republic Bank
FRC,
-4.26%
and PacWest Bancorp
PACW,
-1.94%
are also trading higher.