New York/London (CNN) Another US regional lender caught in the worst banking crisis since 2008 is looking for help.
Buck West Bank (PACW)Inc., headquartered in California, said on Thursday that it was considering “all strategic options” after its share price was halved in after-hours trading after Bloomberg report He was thinking of selling.
“Exploring Strategic Options” is Wall Street’s “help please” lingo. It was the latest bank to announce that it is exploring strategic options First Republic Bank (FRC). That regional bank failed on Monday, and JPMorgan bought most of its assets.
“In accordance with normal practice, the Company and its Board of Directors continually review strategic choices,” Baquist 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 on Wednesday that the bank was looking to sell itself, but the bidders haven’t come out of the woodwork. PacWest Bank is reportedly considering splitting the company or, alternatively, In an effort to raise capital to support itself, Bloomberg reported.
As with many other United States Regional banks, PacWest’s loans and bond holdings collapsed as interest rates soared. Customers withdrew their deposits in March, fearing the bank would fail and they would be left holding the bag. Although the FDIC insures accounts for up to $250,000, many companies have much more money in their accounts, and most of it is uninsured.
This left the bank and its competitors with a potential problem: If customers kept withdrawing their accounts, the bank could run out of cash to pay it back. That has investors worried: PacWest stock is down 72% this year.
PacWest appears to have stabilized in recent weeks since the March collapses of Silicon Valley Bank and Signature Bank. backquest I mentioned last week That customers have stopped withdrawing their money and that 73% of bank deposits are insured. On Thursday, it said 75% of its deposits were insured as of May 2.
“The bank did not experience unusual deposit inflows following the sale of First Republic Bank and other news,” he said in the statement. “In addition, the company recently paid down $1 billion in loans with our cash surplus. Our cash on hand remains strong and exceeds our unsecured deposits, which is 188%.”
When First Republic failed earlier this week, investors worried another shoe might fall. PacWest stock skyrocketed 28% on Tuesday and another 2% on Wednesday.
Other regional banks also fell in after-hours trading on Wednesday, including Western alliance (WAL)which fell by about 30%.
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