What happened
US Bancorp (USB 0.80%), the holding company for US Bank, saw its stock price plummet 15.1% this week from last Friday's close through 10 a.m. ET today, according to S&P Global Market Intelligence. The stock is trading at about $34.50 per share as of Friday morning, down 21% year to date.
Overall, the markets were up slightly this week, as the S&P 500 gained 2.1%, the Dow Jones Industrial Average was up 0.3%, and the Nasdaq Composite climbed 4.9% this week, as of 10 a.m. ET today.
So what
So, maybe you heard, but this was a tough week for bank stocks. Last Friday's collapse of Silicon Valley Bank, a subsidiary of SVB Financial, as well as Signature Bank on Sunday, sent bank stocks reeling on Monday. Those collapses were preceded by crypto bank Silvergate Capital going under a week ago Wednesday -- all due to massive outflows.
While actions by federal regulators to provide liquidity and a backstop to prevent any more bank failures seemed to temporarily calm the market, things quickly went south again for bank stocks after European bank Credit Suisse crashed on Wednesday to an all-time low due to massive outflows stemming from several factors, including a report about issues with the bank's internal controls and a decision by the Saudi National Bank to no longer provide financial support.
NYSE: USB
Key Data Points
Various news outlets reported this week that the U.S. Treasury was assessing the exposure of large U.S. banks, including US Bancorp, to Credit Suisse. It was also reported that large U.S. banks have evaluated their exposure to Credit Suisse and view the potential risks as manageable.
Now what
US Bancorp was one of several large banks that agreed to provide another shaky bank, First Republic, with $30 billion in deposits, with US Bancorp contributing $1 billion.
Jim Herbert, founder and executive chairman, and Mike Roffler, CEO and president of First Republic Bank, said:
We would like to share our deep appreciation for Bank of America, Citigroup, JPMorgan Chase, Wells Fargo, Goldman Sachs, Morgan Stanley, Bank of New York Mellon, PNC Bank, State Street, Truist, and US Bank. Their collective support strengthens our liquidity position, reflects the ongoing quality of our business, and is a vote of confidence for First Republic and the entire U.S. banking system.
US Bancorp is the fifth-largest bank in the U.S., and it has been one of the most efficient, well-run banks in the country for years. While the industry will continue to see volatility in the near term, the large banks may ultimately be the beneficiaries of this shake-up. There may also be some good values emerging, particularly among stable, large banks like US Bancorp.
