Posted on 05/04/2023 6:07:48 AM PDT by Red Badger
New York/London CNN — Another US regional lender caught up in the worst banking crisis since 2008 is looking for help.
PacWest Bank (PACW), based in California, confirmed Thursday that it is exploring “all strategic options” after its share price was cut in half in after-hours trading following a Bloomberg report that it was considering a sale.
“Exploring strategic options” is Wall Street lingo for “please help.” The last bank to announce it was exploring strategic options was First Republic Bank (FRC). That regional bank failed Monday, and JPMorgan purchased most of its assets.
“In accordance with normal practices the company and its board of directors continuously review strategic options,” PacWest said in a statement. “Recently, the company has been approached by several potential partners and investors — discussions are ongoing. The company will continue to evaluate all options to maximize shareholder value.”
Bloomberg, citing anonymous sources, reported Wednesday that the bank has been looking to sell itself, but bidders aren’t coming out of the woodwork. PacWest Bank is reportedly considering splitting up the company or, as an alternative, trying to raise capital to support itself, Bloomberg reported.
As with many other US regional banks, the value of PacWest’s loans and bond holdings has crumbled as interest rates have surged. Customers yanked their deposits in March out of fear that the bank could fail and they’d be left holding the bag. Although the Federal Deposit Insurance Corporation insures accounts holding up to $250,000, many businesses have a lot more money in their accounts, much of which is uninsured.
That left the bank and its competitors with a potential problem: If customers kept drawing down their accounts, the bank may run out of cash to pay them. That made investors nervous: PacWest’s stock has plunged 72% this year.
(Excerpt) Read more at cnn.com ...
Biden’s economy sure seems like the Titanic. She’s going down, boys.
Is this what Jerome Powell means by “sound and resilient”?
I have to see how Webster Bank is doing. It’s a regional bank in Connecticut.
ping!
Webster is probably not as involved in the same asset crap as the west coast banks. It’s been a while since I was in the business, but Webster was one of the “good guys” back in the day.
I think they would be OK unless they have too much commercial real estate.
Safe and sound…. No worries.
Biden: “The banking system is safe!”
Does “all options” include mass suicide by the Board of Directors?
;-)
Jamie Dimon smiling broadly.
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