JPMorgan 'got the best part of the deal' buying First Republic Bank, analyst says

R "Ray" Wang, Constellation Research Principal Analyst & Founder, joins Yahoo Finance Live to discuss JPMorgan's acquisition of First Republic Bank, which was seized by the FDIC last week.

Video Transcript

SEANA SMITH: JPMorgan are closing the day in the green, up just about 2%. Now, the stock are trading to the upside after the bank agreed to acquire First Republic. The regional lender's collapse is the second largest bank failure in the US. And right when you take a look at the fact that JPMorgan closed up just about 2%, some confidence there returning to the market that maybe the stress that we saw within the banking sector is now behind us.

RAY WANG: Yeah, we're definitely thinking that, you know, JPMorgan got the best part of the deal. It's the best clients on the wealth management side, the big get bigger. And I think we've got a little issue with the smaller banks and the regional banks. And so the confidence hopefully is there. And hopefully, the smaller regional banks will have a way back. But right now, they've got a great wealth management portfolio.

And Ray, think part of what you're seeing here too just as far as today's stock action, when you think about JPMorgan and sort of their area in the banking sector, right, kind of as one of those bigger banks. So for there to be such confidence or for them to exude such confidence about the crisis sort of being over, we've heard similar comments today as well.

I should point out that Citigroup CEO Jane Fraser told us this is not the great financial crisis. This is not the savings and loan crisis. So to have multiple banks coming out and being so positive about where this could head eventually, I think that, Seana, probably too also propels JPM shares just when you think about JPM and the broader banking space sort of being one of those top dogs.

SEANA SMITH: Yeah, certainly some very optimistic comments coming from Fraser during her interview here with Yahoo Finance's Brian Sozzi. She said that the US banking system is the envy of the world, and that this deal provides really a sense of relief for the industry. And I certainly think you saw that reflected in the bank shares today.