Regional bank stocks experienced a rebound on Wednesday following a sharp decline the day before. The recent acquisition of First Republic’s assets by JPMorgan Chase has left lingering concerns about the stability of banks. Additionally, the possibility of an upcoming Federal Reserve interest-rate increase and a potential recession have further clouded the outlook. Regional banks which specialize in commercial property loans are particularly vulnerable. 

Berkshire Hathaway’s Vice Chairman Charlie Munger recently expressed concern about the number of bad loans held by banks and the likelihood of future difficulties as property prices fall. Despite these worries, Beverly Hills-based PacWest Bancorp (PACW), Western Alliance Bancorp (WAL), and Comerica (CMA) all experienced gains on Wednesday after significant losses the day prior. PacWest Bancorp rose 8.1% after closing down 28% at $6.50 on Tuesday. Similarly, Western Alliance Bancorp advanced 4.3% after a 15% drop, while Comerica gained 1.9% after sliding 12% on Tuesday. It should be noted that all of these stocks had fallen in premarket trading.

According to Susannah Streeter, who heads the money and markets division at Hargreaves Lansdown, there are concerns rising once more about potential issues lurking within regional banks. With interest rates predicted to increase, there is a fear that this could lead to another major problem, much like the JPMorgan takeover of First Republic Bank which caused a stir without any time to take a breath.

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