PacWest Bancorp | PACW
Updated
PacWest Bancorp sinks 56% in after hours following news the bank is exploring a sale but Powell said the US banking sector is strong!
PacWest Bank, 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. 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.”
The regional bank is assessing options, including a possible sale, and bringing in advisors to evaluate longer-term plans for the business,Piper Sandler and Stephens are the two firms advising PacWest, the person said. The shares of many West Coast regional banks have been hit particularly hard since the collapse of Silicon Valley Bank in March, in part because of concerns that their customer bases are similar. This week, First Republic Bank was seized by regulators and sold to JPMorgan Chase.
The Los Angeles based PacWest has a roughly $750 million market cap, and is down by 72% this year. On Wednesday, PacWest shares declined nearly 2% during the regular session, and notched their fifth straight losing day. Other regional banks declined in extended trading following the report, with the SPDR S&P Regional Banking ETF shedding 5.3%. Shares of Western Alliance Bancorp dropped 27%, while Comerica slid 10%. KeyCorp shares fell 7%. PacWest reported that total deposits declined more than $5 billion in the first quarter to $28.2 billion as of March 31. However, the company said that it saw a net gain of $1.1 billion in deposits from March 20 until quarter end. PacWest also said that deposits grew by another $700 million from March 31 through April 24.
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
Michael Burry : Lawrence, I found something really interesting
Lawrence Fields : Great, Michael. Whenever you find something interesting, we all tend to make money. What stock are you valuing?
Burry : I want to SHORT the whole Banking system !
Whos ready for the BIG SHORT 2 ?
PacWest Bank, 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. 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.”
The regional bank is assessing options, including a possible sale, and bringing in advisors to evaluate longer-term plans for the business,Piper Sandler and Stephens are the two firms advising PacWest, the person said. The shares of many West Coast regional banks have been hit particularly hard since the collapse of Silicon Valley Bank in March, in part because of concerns that their customer bases are similar. This week, First Republic Bank was seized by regulators and sold to JPMorgan Chase.
The Los Angeles based PacWest has a roughly $750 million market cap, and is down by 72% this year. On Wednesday, PacWest shares declined nearly 2% during the regular session, and notched their fifth straight losing day. Other regional banks declined in extended trading following the report, with the SPDR S&P Regional Banking ETF shedding 5.3%. Shares of Western Alliance Bancorp dropped 27%, while Comerica slid 10%. KeyCorp shares fell 7%. PacWest reported that total deposits declined more than $5 billion in the first quarter to $28.2 billion as of March 31. However, the company said that it saw a net gain of $1.1 billion in deposits from March 20 until quarter end. PacWest also said that deposits grew by another $700 million from March 31 through April 24.
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
Michael Burry : Lawrence, I found something really interesting
Lawrence Fields : Great, Michael. Whenever you find something interesting, we all tend to make money. What stock are you valuing?
Burry : I want to SHORT the whole Banking system !
Whos ready for the BIG SHORT 2 ?
Note
Michael Burry appears to have taken advantage of the banking turmoil in the first quarter.the "Big Short" investor bought into First Republic, PacWest, and other embattled lenders. Burry's Scion Asset Management more than doubled the dollar value of its portfolio to $107 millionNote
44 dollar billion bank PacWest Bancorp PACW has now crashed almost 30%
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