Another regional lender is trying to escape the insolvency path by selling out to a buyer or seeking a fresh capital injection.
California lender PacWest Bancorp is reviewing several acquisition proposals after it became the latest mid-sized US bank to be dragged into the worst financial turmoil since 2008. PacWest is either going after a potential full-blown sale, or a juicy capital injection to allow its operations to continue.
Shares of PacWest (ticker: PACW) got demolished after the teetering bank revealed it’s looking for a lifeline after the market close. The news led to an after-hours washout of as much as 55% of the bank’s $772mn stock valuation. The drop came on the heels of a 37% loss on Monday.
PacWest’s tough days arrive at a time when regional banks are under fire and big players need to step in and save the day. Earlier this week, JP Morgan took over embattled lender First Republic Bank in an effort to prevent panic and financial contagion across the banking sector.
