Regional bank stocks moved higher on Monday as investors were encouraged by reports that the recent strain on the sector could be easing and that additional government support could be on the way.
Shares of First Republic jumped by 11.8%, chipping away at the struggling firm's steep losses in March. Shares of PacWest Bancorp rose about 3.5%, while Western Alliance gained 3%. KeyCorp rose 5.3% after the stock was upgraded by analysts at Citi.
The stocks did come off their highs as the day went on. First Republic was up more than 30% at one point. The SPDR S&P Regional Bank ETF (KRE) closed up less than 1%.
The Monday moves follow several signs that the crisis for regional banks could be easing in the United States.
Bloomberg News reported on Saturday that U.S. officials are considering expanding the federal programs that provide more liquidity to banks, in part to help First Republic while it searches for a buyer.
Also CNBC reported on Saturday that the deposit inflows into large banks from the smaller regionals has slowed substantially.
Regional bank stocks have been under significant pressure this month, with regulators closing SVB on March 10 and Signature Bank two days later following significant deposit outflows. Federal regulators announced that depositors at those two banks would be made whole while providing additional liquidity to other banks.
First Republic, which had a similar business model to SVB, has been a particular point of concern. Eleven larger banks deposited $30 billion into First Republic as a show of confidence in the smaller firm.
Monday's gains also follow the announcement that First Citizens BancShares agreed to buy a large chunk of SVB, including its deposits and branches. Shares of First Citizens jumped more than 53%.
Parts of the smaller Signature Bank have already been purchased by New York Community Bancorp. And in Europe, Swiss officials brokered a sale of Credit Suisse to UBS, though Credit Suisse's issues appear to be largely unrelated to the U.S. regionals.