Shares of PacWest Crash as Banking Panic Returns
Shares of PacWest Bancorp tumbled sharply after Bloomberg reported late in the day Wednesday that the Beverly Hills-based bank has been “weighing strategic options.”
At one point overnight, shares were indicated down by more than 60 percent.
The bank has since said that its core deposits have grown since March and said it is in talks with several potential investors. Bloomberg reported that the bank has also considered a break-up or a capital raise. Unidentified sources told Bloomberg on Wednesday that the bank had not yet started a formal auction process.
“An outright sale has been hindered because there aren’t many potential buyers interested in the entire bank, which comprises a community lender called Pacific Western Bank and some commercial and consumer lending businesses, the people said. A potential buyer would also have to potentially book a big loss marking down some of its loans, the people said,” Blooomberg reported.
In an effort to calm markets, the company denied it was experiencing a bank-run or liquidity shortage.
“The bank has not experienced out-of-the-ordinary deposit flows following the sale of First Republic Bank and other news,” PacWest said in a statement. “Our cash and available liquidity remains solid and exceeded our uninsured deposits.”
Banking Panic Hysteria spreads , Governments Are Causing Bank Failures ! , Via BS Regulations
TD Bank and First Horizon call off US$13.4-billion merger deal
Unable to get clarity on if and when they would get the regulatory approvals
The deal, which valued First Horizon at US$13.4 billion when it was announced in February 2022, was called off because the banks did not have clarity on if and when they would get the necessary regulatory approvals, TD said in a statement.
As part of the termination agreement, TD will pay US$200 million to First Horizon, on top of a US$25 million reimbursement fee.
The merger would have made TD the sixth-largest bank in the U.S. by assets. The transaction hit the first signs of trouble this February when TD warned First Horizon that it might not be able to secure the blessing of regulators by the extended deadline of May 27.
The deal hit another snag after the collapse of Silicon Valley Bank sent shockwaves through the U.S. banking system, in which TD already had a significant footprint, including a 12 per cent stake in The Charles Schwab Corp. The U.S. banking turmoil raised doubts that the deal would go ahead at its original US$25 per share offer. First Horizon’s stock price fell more than 30 per cent between the announcement of the deal and late March. The Memphis-based bank’s stock plunged again on May 4, with shares down more than 35 per cent to US$9.50 in late morning trading in New York.