Shares of PacWest Bancorp fell more than 30% in premarket trading May 4 after news broke that the bank was weighing all strategic options, CNBC News reported May 4.
This regional bank is evaluating options, including a possible sale, and is hiring consultants to assess long-term plans for the business, CNBC reported, according to a person familiar with the matter. Piper Sandler and Stephens are the two consulting firms for PacWest, the source said.
PacWest later confirmed that it was still in talks with a number of potential investors and partners. “The company will continue to evaluate all options to maximize shareholder value”says the statement.
Shares of several regional West Coast banks were hit particularly hard after Silicon Valley Bank collapsed in March, partly due to concerns that their customer bases were similar. This week, regulators seized First Republic Bank and sold it to JPMorgan Chase.
In a statement, PacWest said it had not experienced “unusual deposit flows” since the collapse of First Republic Bank.
Los Angeles-based PacWest has a market capitalization of about $750 million and has lost 72% of its market value to close on Wednesday this year after its shares fell for the fifth straight day.
Other regional banks that lost value on the PacWest news include the SPDR S&P Regional Banking ETF, which lost 4% of market value. Western Alliance Bancorp shares fell 20%, while Comerica lost 6.4%. KeyCorp shares fell 7%.
PacWest reported that total deposits at the bank were down by more than $5 billion in the first quarter of 2023, to $28.2 billion as of March 31. However, the company said it received a net increase in deposits of $1.1 billion from March 20 through the end of the quarter.
PacWest also reported that deposits increased another $700 million from March 31 to April 24. However, this has no effect on the “bearish” mood on the stock market and the bank is close to following First Republic Bank.
Source: Rossa Primavera
I am Michael Melvin, an experienced news writer with a passion for uncovering stories and bringing them to the public. I have been working in the news industry for over five years now, and my work has been published on multiple websites. As an author at 24 News Reporters, I cover world section of current events stories that are both informative and captivating to read.