Regional US Banks to Weigh Costly Bond Sales as Depositors Exit

Beleaguered US regional banks are assessing whether bond sales to replace lost deposits are worth the cost, as credit investors weigh whether they’re worth the risk.

The arrival of quarterly bank earnings reports on Friday has spurred speculation on which financial institutions will brave an unpredictable bond market. Average corporate note yields jumped above 6% in the past 12 months and still remain above 5%, more than a percentage point higher than the year-ago period.

Commercial bank deposits have shrunk for the last 10 weeks, as consumers and companies have moved cash into higher-yielding assets like money market funds, with ...