Shares of another American bank collapsed
Despite Fed Chairman Jerome Powell's assurances on the stability of the banking system, PacWest Bancorp's stock has plummeted 58% in late trading. PacWest, struggling in the wake of three competing California-based lenders' collapse, is now considering a range of strategic options, such as a potential sale, breakup, or capital raise.
The Beverly Hills-based bank has engaged a financial adviser, but a complete sale is complicated due to a lack of interest in the entire bank and the possibility of an acquirer having to record significant losses marking down some loans. Bank's market value now stands at around $772 million.
US regional banks have experienced turbulence due to deposit runs leading to the collapse of three California-based banks and one in New York. The sector has been challenged by rising interest rates that have devalued bonds purchased by regional lenders when rates were low, and increased customer withdrawals forcing some banks to sell assets at a loss.
PacWest, led by CEO Paul W. Taylor, has made multiple attempts to reassure investors about its stability and secured $1.4 billion from a financing facility provided by Atlas SP Partners, bolstering its finances with cash from various federal programs.
US regional banks have experienced turbulence due to deposit runs leading to the collapse of three California-based banks and one in New York. The sector has been challenged by rising interest rates that have devalued bonds purchased by regional lenders when rates were low, and increased customer withdrawals forcing some banks to sell assets at a loss.
PacWest, led by CEO Paul W. Taylor, has made multiple attempts to reassure investors about its stability and secured $1.4 billion from a financing facility provided by Atlas SP Partners, bolstering its finances with cash from various federal programs.
