US regional banking woes worsen: PacWest, Western Alliance stocks tumble

Shares of PacWest Bancorp and Western Alliance Bancorp shares plunged on Thursday, dragging other regional lenders down, as news that both banks were in talks about strategic options sparked investor worries of a worsening financial crisis. PacWest’s stock slumped more than 50 per cent in early trading, dropping to a record low.

The bank had confirmed an earlier Reuters report on Wednesday that it was exploring strategic options, including a potential sale or capital raising. Western Alliance shares plummeted nearly 40 per cent, extending earlier session losses, after The Financial Times reported that the lender was exploring strategic options, including a potential sale of all or part of its business. Western Alliance denied The FT report, calling it “categorically false in all respects,” and said it was weighing legal options against the newspaper. Western Alliance has been seeking to reassure investors about its financial stability. Earlier, it said it had not seen unusual deposit outflows following the sale of  First Republic Bank to JPMorgan Chase & Co.