The Yahoo Finance Live team discusses the rise of PacWest Bancorp stock, as the company leads the rally of regional banks amid the quarterly dividend.
- We just wanted to turn your attention to the latest in regional banks. Now, PacWest today is leading the charge to the upside, the rebound rally really extending from what we saw on Friday. Now, the move today coming after the bank announced it will cut its quarterly dividend down from $0.25 a share down to a penny a share. You're looking at a gain of just about 6%.
A number of some of the other names within the space-- Western Alliance was one of the names that was beaten down pretty badly last week in the wake of the regional bank sell off. That stock up just about 3% today. Zions Bancorp up about 4%.
Putting this all in perspective, though, we're still seeing very significant losses over the past five days. But, Akiko, when it comes to this move here from PacWest, obviously, Wall Street a bit encouraged here from this move. We had RBC analyst John Ostrom who was out with the note saying that the dividend reduction makes sense and can potentially help with the pace of capital building. Obviously, PacWest had to adjust and shift its strategy given what has really transpired over the last seven to eight weeks. So a cut in dividend could help better position the company, at least in the short term.
- Yeah. And we heard from the company, announcing that slashing in its dividend, saying essentially what they've been repeating, which is that they are, in fact, fundamentally sound when you look at their balance sheet. I would suggest, though, that the confidence in the regional banks not entirely back yet when you look at where the ETFs are trading right now. The KBW regional banking index, one we've been watching very closely here over the course of last week when we saw that big sell off. Take a look. It is still down about 1% there.
So there's still a lot of questions here about which banks are sound. Although, we had analysts on last week, Seana, that said it doesn't really jive with when you look at where the numbers are for these banks versus where the sentiment is in the market. So we've got a bounce back for one day. But to your point, we have seen some significant declines. So, really, still a long way to go until they get back to that level.