PacWest climbs 30% to lead a rebound in regional bank stocks after the lender says its business is 'fundamentally sound'

• PacWest shares soared Monday, extending Friday's surge of more than 80%.
• PacWest said its business is "fundamentally sound" and it was making the "prudent" move to slash its dividend.

PacWest shares pushed higher Monday, fronting a further bounceback in beleaguered regional bank stocks, after the California-based lender aimed again to dampen worries about its business including a move to bolster capital.

Shares of the lender jumped as much as 30% as Monday trading got underway, rallying after the company late Friday said its "business remains fundamentally sound" and that it will make the "prudent step" to cut its quarterly dividend to 1 cent a share from 25 cents a share.

PacWest shares were building on an 82% surge Friday alongside gains in other recently hard-hit shares of small to mid-sized banks. Western Alliance popped up 12% in Monday's premarket session. That stock advanced by 49% on Friday, supported in part by a ratings upgrade at JPMorgan to an overweight rating from neutral.

Coamerica and Zions were also upgraded to overweight ratings at JPMorgan. The shares were each up about 8% early Monday, also extending Friday's gains.

The SPDR S&P Regional Banking ETF (KRE) rose 2.4% early Monday. Fundstrat, in a Friday note, said a reversal was taking shape among regional banks stocks that could see prices bounce into mid-May. "Rallies up to $40.68 are likely initially for KRE, and movement above that level might lead to $45 before hitting resistance," it said.

Regional bank stocks have been crushed after the abrupt implosion and seizure of Silicon Valley Bank in March after worried customers pulled more than $40 billion from the bank in a single day. Fears about the lender's viability were sparked by a massive loss on a bond-portfolio sale. Signature Bank was also seized. Last week, First Repulbic was taken over by the FDIC and sold to JPMorgan.

PacWest shares have also dropped by 75% this year. The stock was rocked last week after the company confirmed that it was exploring strategic options.

PacWest has been working to quell fears about deposits moving out of the bank. CEO Paul Taylor in the company's first-quarter earnings report said deposits stabilized in the latter part of March. They also "rebounded nicely in April, increasing approximately $700 million subsequent to quarter-end."