PacWest, a lender based in Los Angeles, was trading over 7% lower, while Western Alliance was about 5% lower.
The day after the Fed’s most recent loan survey, US regional banks continued to lose ground on Tuesday, with Western Alliance pulling down a number of its competitors.
PacWest and Western Alliance Experience Significant Stock Declines
Comerica, a similarly troubled regional lender, had a 3.6% decline.
Trading for the KBW Regional Bank Index was down 1.2%.
As three banks failed within a short period of time, the sector has been under intense scrutiny.
Despite a minor comeback since the end of March, PacWest and Western Alliance both had sizable deposit outflows in the first quarter.
Markets have remained unpredictable despite bank claims that they are financially sound, prompting calls for authorities to intervene and stabilize the industry, maybe by guaranteeing all deposits.
Investors disagree over whether the volatility is a result of short sellers’ market manipulation or revised expectations for the banks’ long-term profitability.
In the absence of any significant sector-related developments on Tuesday, Bancorp regained its footing and closed higher for its second straight day of gains.
By the final bell, it was up 2.4% while overall market shares were falling.
The most actively traded stock in premarket trading earlier was PacWest, which had double-digit percentage losses.
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Banks See Mixed Results
Western Alliance Bancorp is currently. East West Bancorp Inc. fell by 0.1%, Comerica Inc. increased by 0.4%, and retreated by 1.4%.
The Financial Select Sector SPDR exchange-traded fund and the SPDR S&P Regional-Banking ETF both decreased by 0.4%, while the KBW Nasdaq Bank Index increased by less than 0.1%.
In order to increase its capital reserves, PacWest lowered its dividend from 25 cents per share to one penny on Monday.
As a result, the shares of the bank increased.
Following the failures, PacWest shares are currently down 73.4% in 2023.
