Western Alliance Bancorp. led a rebound in regional-bank stocks Wednesday after an analyst said the recent selloff on the heels of the distressed sale of First Republic Bank to JPMorgan Chase & Co. was “irrational” given hard numbers from the bank on its relative stability. Hovde Group analyst Ben Gerlinger reiterated a high-conviction outperform rating of Western Alliance
WAL,
+2.97%
and said he spoke to management at the bank during Tuesday’s selloff, when the stock was posting a double-digit percentage decline.
“In the middle of yesterday’s irrational bank trading, we had a brief conversation with management — ultimately coming away feeling very comfortable with our … rating,” Gerlinger said. “While the bank space likely faces legitimate concerns regarding future profitability, we believe [Western Alliance’s] current and estimated future return metrics to warrant a dramatic multiple expansion from current levels.” Western Alliance’s first-quarter results and balance-sheet update were better than feared, and the bank’s brief update on Tuesday “gives us solace that not only will [Western Alliance] weather the current storm, but is likely better positioned than most peers,” Gerlinger said. Western Alliance’s stock was up 2.6%, while PacWest Bancorp’s
PACW,
+3.51%
moved up by 5%. Raymond James analysts noted that PacWest’s first-quarter operating earnings of 66 cents a share beat the consensus estimate of 61 cents a share. The bank published earnings on April 26. “The beat was driven by higher fee income, lower operating expenses, and a lower provision expense, partially offset by lower net interest income,” Raymond James analysts said. T …
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PACW,
+3.51%
moved up by 5%. Raymond James analysts noted that PacWest’s first-quarter operating earnings of 66 cents a share beat the consensus estimate of 61 cents a share. The bank published earnings on April 26. “The beat was driven by higher fee income, lower operating expenses, and a lower provision expense, partially offset by lower net interest income,” Raymond James analysts said. T …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]