US Stock Market Move | Analysts say the market's reaction to the loan fraud issue is excessive, and regional bank stocks rebound. Zions Bancorporation, N.A. (ZION.US) rose more than 6%.

U.S. bank stocks rebound, after a sharp drop in this sector yesterday due to loan fraud issues. As of press time, Zions Bancorporation, N.A. (ZION.US) rose more than 6%, Western Alliance Bancorp (WAL.US) rose nearly 4%, Carver Bancorp Inc. (CARV.US) rose more than 2.6%, Community West Bancshares (CWBC.US) rose more than 2.4%. On Thursday, Zions Bancorporation, N.A. and Western Alliance Bancorp mentioned that they encountered fraud in issuing loans to funds invested in distressed commercial mortgages. On Friday, Baird Equity Research analysts pointed out that the market's reaction to this was excessive. The bank raised its rating on Zions Bancorporation, N.A. to "outperform the market" with a target price of $65. Baird analyst David George wrote in the report: "Zions Bancorporation, N.A. saw its market value evaporate by over $1 billion, mainly reflecting market fears of contagious risks and liquidity concerns. Although these concerns are understandable to some extent, we believe the decline is significantly exaggerated. As this event is related to fraudulent activities, we believe it is an issue of individual borrowers rather than systemic risk, and Zions Bancorporation, N.A.'s CET1 capital adequacy ratio of around 11% should help alleviate investor concerns about liquidity and loss absorption capability."