PacWest bank seeks to reassure investors as shares dive

US regional bank PacWest Bancorp sought to reassure investors late Wednesday after its shares plummeted by more than half, saying its deposit flows had not been unusual and liquidity remained “solid.”

The 52 percent dive in its stock price during after-hours trading on Wednesday followed reports that PacWest was considering a sale or other capital-raising measures.

PacWest’s struggles come after several other mid-size lenders recently collapsed in the United States, sparking fears over the health of the sector.

“The bank has not experienced out-of-the-ordinary deposit flows following the sale of First Republic Bank and other news,” California-based PacWest said in a statement.

“Our cash and available liquidity remains solid and exceeded our uninsured deposits.”

First Republic, another California-based lender, went under on Monday and was bought by JPMorgan Chase.

In March the failure of three other regional banks and the takeover of Credit Suisse by rival UBS triggered market turmoil.

PacWest also said Wednesday that it had been exploring “strategic asset sales,” including a “$2.7 billion Lender Finance loan portfolio” sale that remained “on track.”

It was normal to “continuously review strategic options,” the bank said, adding that it had been “approached by several potential partners and investors” with discussions ongoing.

Tim Waterer, chief market analyst at KCM Trade, told Bloomberg that PacWest’s statement “offers little in the way of confidence.”

Despite Federal Reserve Chair Jerome Powell’s “best efforts” to calm the market, Waterer said “there is nothing to suggest that the banking crisis is at an end.”

PacWest shares were down about 38 percent in pre-market trading on Thursday.

On Wednesday, the Federal Reserve raised its benchmark lending rate for a 10th time, continuing its fight against inflation, which remains above its long-term target of two percent.

Shares in other regional US banks, which have been under pressure following the recent failures, also closed lower Wednesday.

Western Alliance Bancorp, whose share price dropped up to 38 percent in post-market trading, also sought to boost confidence among investors, saying it too had “not experienced unusual deposit flows.”