Western Alliance soars 20% after it says deposits stabilized a month after bank turmoil rocked markets
(Photo Illustration by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images)
- Western Alliance stock surged as much as 20% on Wednesday.
- The regional lender indicated that its deposit levels have stabilized since last month's banking turmoil.
- The stock is down 33% year-to-date despite this week's rally.
Shares of Western Alliance Bancorporation jumped as much as 21% on Wednesday after the regional lender gave an encouraging update on its deposit levels.
The stock was trading at $39.48 per share at 1:50 p.m. ET Wednesday.
Shares of the regional lender are on a tear after the bank disclosed that its deposits had stabilized and posted upbeat first-quarter fiscal results.
The Phoenix, Arizona-based firm beat expectations for both revenue and profits for the first three months of 2023. Management said Western Alliance added $2 billion in deposits from March 31 to April 14 as well, helping assuage shareholder concerns over the health of deposits after the tumult in March stoked fears of a run on small and mid-sized banks.
"While we experienced elevated net deposit outflows immediately following the closure of other banks, deposit balances quickly stabilized," Western Alliance CEO Kenneth Vecchione said in a statement.
Wedbush Securities analysts upgraded Western Alliance from neutral to outperform on the news, adding that its deposit growth gives the firm a "solid outlook" in a note to clients.
"[The bank's] higher level of insured deposits at 73% should help support deposit levels going forward," Wedbush's David Chiaverini wrote.
The global banking sector was rattled after the downfall of Silicon Valley Bank in March, which marked the second-largest banking failure in US history. The same week, Signature Bank was shuttered by regulators, while Silvergate Bank announced it would wind down operations.
Panic rippled through financial markets throughout the month, sending shares of regional banks plunging before the sector stabilized after interventions from government authorities and larger banks.
Western Alliance shares are still down 33% year-to-date after the latest rally.