Rebounded

In this buzz: First Citizens Bank & SVB; An outflow of deposits and how the Treasury can backstops uninsured deposits; and a bit more…

After everyone’s bracket has been busted,
… the men’s NCAA Final Four is all set but that’s not the kind of rebound we’re talking about.
– Equity futures are starting the week on a high note as …
– First Republic leads a rebound in regional bank stocks as the market looks to build on last week’s gains. A number of events over the weekend helped give a boost to the market on the open.

• First Citizens Bank agreed to buy a large chunk of SVB according to the FDIC.
• First Citizens will purchase around $72 billion of SVB assets at a $16.5 discount (who can’t resist a deal?),
• though $90 billion in securities and other assets will remain in receivership for disposition by the FDIC.

An outflow:
Also, CNBC reported over the weekend that deposit outflows from small banks to industry behemoths such as Wells Fargo, Bank of America and JPMorgan slowed over the past several days.

What that means:
The slow in outflows is taken as a sign of calm by depositors in smaller banks. Helping to further calm depositors and investors was a report that U.S. authorities are considering expanding an emergency lending program for banks. Such a move could give First Republic more runway to shore up its liquidity position.

Goldman – “Treasury can backstops uninsured deposits…“
Finally, a statement from Goldman Sachs stated they believe “the Treasury has the capacity to provide a backstop for uninsured deposits If necessary.” Even Deutsche Bank, whose shares were under pressure late last week and prices for its credit default swaps rallied, rebounded by close to 4% pre-open. The Fed and the Treasury have sought to assure investors that the U.S. banking system is sound and well supported as volatility and turmoil caused havoc in the markets over the past few weeks.