BUZZ-US regional banks rise as jumbo rate cut soothes deposit cost concerns

** U.S. regional bank stocks rise in premarket trading after the U.S. Federal Reserve cuts interest rates by 50 basis points

** KeyCorp KEY.N, Regions Financial RF.N, Fifth Third Bancorp FITB.O, Banc of California BANC.N, and Comerica CMA.N rise 2.4, 2.3%, 2.1%, 2.6% and 2.4%, respectively

** SPDR S&P Regional Banking ETF KRE.P up 2.7%

** Regional banks are expected to benefit more from rate cuts compared to larger banks, as deposit costs reset lower and loan growth set to accelerate

** Industry has been plagued with several major headwinds including higher deposit costs, tepid loan growth, and elevated concerns over credit quality since the Fed started its aggressive monetary policy tightening

** Rate cut is the single most important catalyst to reverse a list of headwinds into tailwinds for regional banks - J.P. Morgan analyst Steven Alexopoulos

** Adds, Fed cut reduces uncertainty over borrowing costs and the economy, while lower rates would also reduce fear over banks with commercial real estate overhangs

** KBW Regional Banking Index .KRX, a key benchmark to track investor sentiment toward the sector, up 4.4% YTD

(Reporting by Arasu Kannagi Basil in Bengaluru)

((ArasuKannagi.Basil@thomsonreuters.com;))