Shares of PacWest Bancorp experienced a significant drop of 56% during extended trading on Wednesday,3rd May after news that the bank is considering different strategic options.
According to a reliable source familiar with the matter, PacWest is currently evaluating various choices, including a potential sale, and has brought in advisors of Piper Sandler and Stephens to assess long-term plans for the business, as confirmed by CNBC.
Late on Wednesday, Bloomberg initially disclosed that PacWest Bancorp was in the process of exploring different options. Following the recent failure of Silicon Valley Bank and the subsequent concerns regarding the customer bases of West Coast regional banks, many of these banks, including PacWest, have experienced significant declines in their stock prices.
This week, regulators took control of First Republic Bank, which was then sold to JPMorgan Chase. PacWest, headquartered in Los Angeles with a market capitalization of approximately $750 million, has witnessed a decline of 72% in its stock value this year. During the regular trading session on Wednesday, PacWest shares decreased by almost 2% and recorded their fifth consecutive day of losses.
Following the report, several other regional banks experienced declines during extended trading. The SPDR S&P Regional Banking ETF, which represents the performance of regional banks, dropped by 5.3%. Shares of Western Alliance Bancorp declined by 27%, Comerica slid by 10%, and KeyCorp shares fell by 7%.
PacWest Bancorp reported a decrease in total deposits by over $5 billion in the first quarter, reaching $28.2 billion as of March 31. However, the company noted a net gain of $1.1 billion in deposits from March 20 until the end of the quarter. Additionally, PacWest stated that deposits grew by another $700 million from March 31 through April 24.
