US regional bank shares jump on Western Alliance deposits growth

(Reuters) – Shares of U.S. regional lenders climbed premarket on Wednesday, looking to break out of range-bound trading as an update on Western Alliance (NYSE:) Bancorp’s deposit levels soothed concerns that the U.S. banking crisis was getting worse.

Western Alliance shares shot up 11% to $35.18, on course to erase losses recorded over the last two weeks if gains hold.

Deposits growth at the lender exceeded $2 billion as of May 12, it said after markets closed on Tuesday, while brokerage Bank of America (NYSE:) Global Research resumed coverage of the bank with a “buy” rating and a $42 price target.

Its business model “was more resilient than perceived”, BofA said.

Western Alliance and other regional lenders have seen their stock valuations battered by worries around a broader crisis and funding costs, with consumers moving money into bigger banks after three mid-sized U.S. lenders collapsed in the last two months.

PacWest Bancorp was up 10% at $5.04 on Wednesday. The bank’s shares have seesawed in the last few sessions, rallying nearly 18% on Monday only to give back those gains a day later.

Shares of Comerica (NYSE:) Inc, Zions Bancorp and KeyCorp (NYSE:) were also up between 1.3% and 3.5%.

Deposit flows at U.S. banks, which investors have been poring through for signs of distress, climbed to $17.16 trillion in the week ended May 3, marking the first increase in four weeks, according to data from the Federal Reserve.