First Republic, regional bank stocks continue falling as financial turmoil weighs on banks, markets

Yahoo Finance Live anchor Seana Smith breaks down how bank stocks closed this week following the collapse of Silicon Valley Bank and the rescue of First Republic.

Video Transcript

SEANA SMITH: Dig into some of those big movers of the week and we got to start with First Republic because that certainly is the story as we wrap up this week. Selling off once again today, you're looking at losses of 33% today alone. There's still a lot of worry out there clearly about the possible contagion risk. Well, First Republic has lost more than 2/3 of its value this week.

On Thursday, 11 US banks, including JPMorgan, Citi, Bank of America all deposited $30 billion into First Republic, the effort here to restore confidence in First Republic coming after the collapse of Signature Bank on Sunday, Silicon Valley Bank last Friday. Now Silicon Valley bank's parent company SVB Financial Group, they filed for Chapter 11 bankruptcy today. Bank stocks ending the week lower and then the day lower. You can see that on your screen with most of the larger banks off just over 3% today.

But we got to talk about regionals because that's really where the story is. Heavy selling across the board. We have PacWest off nearly 19% today. Zions Bancorp off another 6%, almost 7%, a 15% drop in Western Alliance. And, Ines, when you talk about the fact that, yes, this move, this rescue plan, this rescue package from 11 of the largest banks, it was meant to help shore up some of the concern out there on the street, some of the worry about the contagion risk.

But still when you take a look at their action today, also the fact that the company suspended its dividend, the outlook looks pretty dire. And we heard that from KBW banking analyst, Chris McGroarty, earlier in the show. He was saying that this rescue deal for First Republic, it was just a temporary lifeline and there certainly a lot of weakness within that company. A lot of weakness were broadly speaking and some other names within the space and certainly something to keep an eye on here.

INES FERRE: Yeah, because we don't know the exact details of that lifeline that was given by the banks to First Republic, and so what will that do to the bottom line for First Republic. And you're seeing that reflected with the stock today. You are seeing also over the last five days-- I'm pulling up on the YFi Interactive-- First Republic is down 71% for the last five days.

And a lot of questions also about what has happened with banking over the last week. And if what's happened with SVB, what's happened with First Republic, if this has-- if this crisis has sort of created a two-tier system when it comes to banks.