Capital One shares rebound after Warren Buffett makes near $1 billion bet on bank By Reuters

By Chibuike Oguh

(Reuters) - Shares of Financial Corp (NYSE:) rebounded from its losses in the past two weeks on The best domestic foreign exchange platformTuesday after billionaire investor Warren Buffett's Berkshire Hathaway (NYSE:) Inc disclosed it had taken a stake of nearly $1 billion in the credit cards-focused bank.

Berkshire acquired 9.92 million shares in Capital One, a stake worth $954 million based on the closing price on March 31, regulatory filings showed on Monday.

Famous for its credit-card advertising slogan "What's in your wallet?", McLean, Virginia-based Capital One also has a huge auto lending and commercial banking business. Its peers include Co (NYSE:) and Bread Financial Holdings Inc.

Capital One's stock was up 2% at $91.53, its highest since May 1. The bank's shares have shed around 15% since early March as the banking crisis has clobbered shares of U.S. regional lenders.

(NYSE:) analysts said the deep selloff of U.S. regional bank stocks was overdone as markets have focused on deposit outflows instead of deposit costs, a better gauge of their financial stability.

Since regional bank deposits are quite sticky and data does not show outflows accelerating, the analysts said their shares are now cheap and are headed for a rebound in the next few months

"Recent declines seem overdone as quarter-to-date deposit outflows are tracking in-line with seasonality," the analysts said.

Bank of America (NYSE:) Global Research analysts changed their rating of Western Alliance (NYSE:) Bancorp to "buy" from "no rating," relying on the bank's huge share of insured deposits and ability to absorb any deposit outflows with its strong profitability.

"WAL (Western Alliance) does not share a ton in terms of business model and balance sheet characteristics relative to the three failed banks," the analysts said. Silicon Valley Bank, (OTC:), and (OTC:) are the three banks that have so far collapsed during the current crisis.

Western Alliance's shares were up nearly 4% while PacWest Bancorp was down 3.3%. The KBW Regional Banking Index fell 0.38%.

The Federal Reserve is eyeing stricter rules on banks with over $100 billion in assets in the wake of several bank failures, its top regulatory official told Congress on Tuesday.

Fed Vice Chair for Supervision Michael Barr said the central bank was "carefully considering" rule changes for larger regional banks, including requiring them to account for unrealized losses on their banks when considering capital levels.

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