Shares of PacWest Bancorp are down 46% today after a report late yesterday that the company was considering strategic alternatives.
The company responded with a press release that highlighted a sale process of its Lender Finance business that was already announced and said that it had been approached 'by several potential partners and investors' in accordance with normal practices.
It would be a real tragedy if there was no firesale ongoing but that this report just started one. Or it could even be that a potential buyer leaked it to get a better deal.
The company reported on deposits two weeks ago and they've held up well but we know that can change quickly.
The moves and TD walking away from a regional bank deal have caused a fresh run on the KRE regional bank ETF, which is down 6%. The usual suspects are at the bottom of the list, including a 20% drop in Western Alliance.
At this point, it's tough to see anyone drawing a line under this unless someone comes in with a hammer and buys one of these regional banks for a premium. But why would anyone do that when you can seemingly get them for free after the FDIC is forced to step in?
