- PacWest Bancorp is reportedly considering a range of strategic options, including a sale.
- The news sent PacWest’s share price down 52.5% to $3.05 apiece in after-hours trade on Wednesday.
- The US banking sector has been rattled by 3 major bank collapses in recent months.
PacWest Bancorp is the latest regional bank to be hit by uncertainty following media reports it is considering a range of strategic options — including a sale.
The news, first reported by Bloomberg on Wednesday, sent the Beverly Hills-based bank’s share price tumbling by 52.5% to $3.05 apiece in after-hours trade on Wednesday.
While PacWest is open to a sale, it hasn’t started a formal process for an auction, Bloomberg reported, citing unnamed people familiar with the matter.
PacWest would have issues selling its entire business outright because not many buyers would be interested in the whole enterprise — which includes Pacific Western Bank, a community lender with 69 branches, among other lending businesses, Bloomberg reported.
Wednesday’s rout in PacWest shares marked its fifth straight day of stock price slide. The shares had plunged by 26% on Tuesday amid a broad sell-off in regional bank stocks, two days after First Republic Bank failed and was taken over by the Federal Deposit Insurance Corporation. First Republic’s assets were subsequently sold to JPMorgan.
The US banking sector has been riddled with uncertainty ever since regional banks such as Silicon Valley Bank and Signature Bank, New York collapsed in March.
Responding to the fears, Paul Taylor, PacWest’s CEO, tried to assuage customer jitters at the company’s first-quarter earnings call on April 26. While the bank saw deposit outflows early on in March amid the bank crisis, the situation stabilized later in the month, he said, according to a transcript.
Deposits “rebounded nicely” in April, Taylor added.
PacWest shares closed 2% lower at $6.42 apiece on Wednesday and are down 72% so far this year.
PacWest did not immediately respond to Insider’s request for comment sent outside regular business hours.