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☆ PacWest and the Bank Confidence Genie
▼ + stars: | 2023-05-04 | by ( Aaron Back | Telis Demos | ) www.wsj.com time to read: 1 min

The FDIC seized First Republic Bank early Monday and struck a deal to sell the bulk of its operations to JPMorgan Chase. WSJ’s Ben Eisen explains what led to the bank’s failure and what it means for customers, investors and the industry. Illustration: Preston JesseePacWest Bancorp is the latest lender to face an investor panic. What is becoming clear is that investors aren’t willing to give some banks much credit beyond the bare minimum. The immediate trigger for Thursday’s selloff in PacWest and other regional bank stocks appeared to be a Bloomberg story Wednesday afternoon saying the California lender is looking at “strategic options,” including a sale or breakup.

☆ Regional-Bank Shares Dive as Investors Fret About Contagion
▼ + stars: | 2023-05-04 | by ( Gina Heeb | ) www.wsj.com time to read: 1 min

WSJ’s Ben Eisen explains what led to First Republic Bank’s failure and what it means for customers, investors and the industry. Illustration: Preston JesseeRegional-bank stocks tumbled Thursday morning despite assurances from the Federal Reserve that the banking system is on solid footing. PacWest Bancorp , which has been hit hard since regional banks started wavering in March, fell a record 42% after the market opened. The stock started falling in after-hours trading Wednesday evening, after a report that it was considering selling itself.

May 4 (Reuters) - Canadian lender Toronto-Dominion Bank Group (TD.TO) has called off its deal to acquire First Horizon Corp (FHN.N) for $13.4 billion on Thursday, sending the U.S. bank's shares down 44.5% in premarket trading. As part of the termination, TD will pay $200 million to First Horizon in addition to a $25 million fee reimbursement, the banks said. TD first agreed to buy First Horizon in February last year to expand its presence in the United States. Since then, the lender has acquired New York-based boutique investment bank Cowen Inc for $1.3 billion this year. ORTEX data from early last month showed the second-largest Canadian lender was the world's most shorted banking stock.

☆ US regional bank PacWest says in talks with potential partners, investors
▼ + stars: | 2023-05-04 | by ( ) www.reuters.com time to read: +1 min

May 4 (Reuters) - PacWest Bancorp (PACW.O) said on Thursday that it has been approached by several potential partners and investors, and that those talks are ongoing as it continues to evaluate all options to maximize shareholder value. The Los Angeles-based lender said it has explored strategic asset sales, including moving its $2.7 billion lender finance loan portfolio to held-for-sale. PacWest said its cash and available liquidity remains "solid" and has exceeded its uninsured deposits, representing 188% as of May 2. The bank said it has not experienced out-of-the-ordinary deposit flows following the sale of First Republic Bank to JPMorgan Chase & Co (JPM.N). PacWest's core customer deposits increased since March 31, with deposits totaling $28 billion as of May 2, the company said in a statement.

May 3 (Reuters) - PacWest Bancorp (PACW.O) is exploring strategic options including a sale or capital raising, a source familiar with the matter said, sending the shares of the bank and several other U.S. regional lenders tumbling in after-market trading. The Phoenix-based regional lender said it was "reaffirming its financial strength as well as its deposit growth guidance in response to recent industry events." PacWest stock has lost almost 90% of its value since the regional banking crisis started on March 8. Zion Bancorp (ZION.O), First Horizon (FHN.N) and Comerica (CMA.N) each slumped more than 7% and the SPDR S&P Regional Banking ETF (KRE.P) dropped 5%. The cost of insuring against further losses in regional U.S. bank stocks stood on Wednesday near a one-month high in options markets.

☆ Western Alliance says no unusual deposit outflows after First Republic sale
▼ + stars: | 2023-05-04 | by ( ) www.reuters.com time to read: +2 min

[1/2] A screen displays the logo and trading info for Western Alliance Bancorporation on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., March 14, 2023. REUTERS/Brendan McDermidMay 3 (Reuters) - Western Alliance Bancorp (WAL.N) said on Wednesday it had not experienced unusual deposit outflows following the sale of collapsed lender First Republic Bank to JPMorgan Chase & Co (JPM.N), as the U.S. regional bank sought to reassure investors. Phoenix-based Western Alliance said its total deposits were $48.8 billion as of Tuesday, up from $48.2 billion as of Monday. The statement from Western Alliance came after reports that PacWest Bancorp (PACW.O) was exploring strategic options including a sale or capital raising. The news sent shares of several regional lenders tumbling in after-market trading, led by a 52% plunge at PacWest and 23% decline at Western Alliance.

As each domino falls, the next weakest bank begins to wobble," billionaire investor Bill Ackman wrote in a tweet. PacWest stock has lost almost 90% of its value since the regional banking crisis started on March 8. Zion Bancorporation (ZION.O), Comerica (CMA.N) and First Horizon (FHN.N) each slumped more than 7% and the SPDR S&P Regional Banking ETF (KRE.P) dropped 5%. The cost of insuring against further losses in regional U.S. bank stocks stood on Wednesday near a one-month high in options markets. On Wednesday a source said the lender was looking at options that include a potential sale or capital raise.

☆ Largest banks doing big deals not ideal, FRC an exception - Powell
▼ + stars: | 2023-05-04 | by ( ) www.reuters.com time to read: +1 min

NEW YORK, May 3 (Reuters) - Federal Reserve Chair Jerome Powell said it was probably good policy that the largest banks are not doing big acquisitions, but said that JPMorgan Chase & Co's (JPM.N) acquisition of First Republic Bank (FRC.N) was an exception. Regulators have to follow the law of going with the least-cost bid, Powell said. The Federal Reserve on Wednesday raised interest rates by a quarter of a percentage point and signaled it may pause further increases. Powell said that the resolution of First Republic was "an important step to drawing a line" under a period of severe stress in the banking system. Powell added that the speed of the run on SVB needed to be reflected in supervision and regulation.

U.S. West Texas Intermediate crude (WTI) fell $1, or 1.5%, to $67.60 a barrel. WTI in early trading on Thursday fell to a session low of $63.64 a barrel, the lowest since December 2021. On Wednesday afternoon, the Fed raised interest rates by a quarter of a percentage point. The move weighed on oil prices, as higher rates could slow economic growth and hit energy consumption. Investors awaited developments from the European Central Bank, which is set to raise interest rates for the seventh meeting in a row on Thursday as its long fight against stubborn inflation continues.

☆ Banking crisis: Why markets are still freaking out about banks
▼ + stars: | 2023-05-04 | by ( Allison Morrow | ) edition.cnn.com time to read: +6 min

Similarly, southeastern regional bank First Horizon was teetering, having scrapped a $13 billion merger with Canada’s TD bank. That market pessimism was echoed by Bill Ackman, the billionaire investor, who tweeted Thursday that regional banks broadly are in trouble. Without a miracle from DC, the outlook for regional banks is not great. There is so much pessimism percolating on Wall Street, smaller banks are going to get crushed. That means we can expect more bank failures, and more Wall Street panic, in the weeks and months ahead.

☆ Senator Elizabeth Warren seeks information from First Republic's former CEO, Wall Street Journal reports
▼ + stars: | 2023-05-04 | by ( ) www.reuters.com time to read: +1 min

[1/2] A view of the Park Avenue location of the First Republic Bank, in New York City, U.S., March 10, 2023. Senator Elizabeth Warren has written to Michael Roffler, the former chief executive of failed First Republic Bank asking for more information on his and other executives' pay, the Wall Street Journal reported on Thursday. Warren's office did not immediately respond to a Reuters request for comment, while Roffler could not be reached for comment. Regulators seized troubled First Republic Bank and JPMorgan Chase (JPM.N) agreed to buy majority of the lender's assets earlier this week, marking the largest U.S. bank failure since the 2008 financial crisis. Reporting by Niket Nishant in Bengaluru; Editing by Shounak DasguptaOur Standards: The Thomson Reuters Trust Principles.

☆ Stock Market Today: Dow Drops More Than 350 Points on Bank Jitters, Fed Rate Hike
▼ + stars: | 2023-05-04 | by ( ) www.wsj.com time to read: +2 min

The bank said it was talking to potential partners and investors, and would keep evaluating "all options to maximize shareholder value." The S&P 500 dropped 0.7%, while the Dow Jones Industrial Average slid 1.1% and the Nasdaq Composite gave up 0.3%. Western Alliance Bancorp was down 39% after the company denied a report that it was exploring strategic options, including a potential sale. First Horizon sank by 37% after its $13.4 billion sale to Toronto's TD Bank was called off. The jitters follow the failures of Silicon Valley Bank, Signature Bank and, more recently, First Republic Bank.

☆ Morning Bid: Hike and hold, bank angst and Apple
▼ + stars: | 2023-05-04 | by ( ) www.reuters.com time to read: +5 min

As the Fed delivered what markets assume will be the last rate hike of a brutal 13-month, 500-basis-point tightening cycle, further aftershocks from the March bank blowups reverberated in the background. And given they had advance knowledge of next week's quarterly loan survey before Wednesday's rate decision, it suggests the bigger picture they see remains somewhat equivocal. Norway's central bank raised interest rates as expected and signalled more to come. Events to watch for on Thursday:* European Central Bank policy decision, statement and news conference* U.S. first quarter unit labor costs and productivity, April layoffs, March trade balance, weekly jobless claims. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ PacWest, Western Alliance hit as US banking concerns widen
▼ + stars: | 2023-05-04 | by ( Medha Singh | ) www.reuters.com time to read: +3 min

PacWest (PACW.O) slumped 37% in premarket trade, after having lost 29% since Monday. Reuters had reported on Wednesday that PacWest was exploring strategic options including a potential sale or capital raising, which the lender confirmed late in the day. Zion Bancorporation (ZION.O), KeyCorp (KEY.N), Valley National Bancorp (VLY.O), Comerica (CMA.N) and First Horizon (FHN.N) dropped between 2% and 6%. The SPDR S&P Regional Banking ETF (KRE.P) shed 2.8%. PacWest Bancorp reported a loss of $1.1 billion attributed to shareholders for the first quarter of the year.

☆ Factbox: PacWest Bancorp, US regional lender in spotlight
▼ + stars: | 2023-05-04 | by ( ) www.reuters.com time to read: +2 min

Here are some details about the bank:* PacWest is a community bank focused on providing business banking and treasury management services to small, middle-market, and venture-backed businesses. PacWest's market value has now fallen to $772 million after its shares tumbled 72% this year. * According to data from the U.S. Federal Reserve, PacWest was the 53rd largest U.S. bank, as of Dec 31. * As of March 31, the lender held total deposits of $28.2 billion and total assets of $44.3 billion. Meanwhile, total insured deposits, which have come into focus since the crisis, were about 75% of total deposits as of May 2.

☆ Americans haven't been this worried about their bank deposits since the 2008 financial crisis
▼ + stars: | 2023-05-04 | by ( Christina Cheddar Berk | ) www.cnbc.com time to read: +1 min

Recent events may be chipping away at confidence in the U.S. financial system, according to the findings of a Gallup survey. Nearly half of the 1,013 adults polled said they were "very worried" (19%) or "moderately worried" (29%) about the safety of the money they had tucked away in a bank or other financial institution, Gallup said. The level of concern expressed in the poll is similar to the findings that Gallup found shortly after the collapse of Lehman Brothers in September, 2008. Still, a December 2008 reading had shown sentiment had already improved from those worst levels as steps were taken to ease the impact of the financial crisis. When the poll was conducted from April 3-25 this year, Signature Bank and Silicon Valley Bank had already failed.

☆ Premarket stocks: Why these bank stocks aren't getting crushed
▼ + stars: | 2023-05-04 | by ( Julia Horowitz | ) edition.cnn.com time to read: +7 min

First Horizon (FHN) and TD Bank (TD)also called off a $13 billion deal Thursday that would have formed America’s sixth-largest bank. The Stoxx Europe 600 Banks Index, which tracks big EU and UK banks, has shed 14% over the same period. Year-to-date, European banks are up more than 3%, while US lenders are down 26%. Broader market dynamics have also helped European bank stocks. The European Central Bank, which meets Thursday, has also been slower than the US Federal Reserve to hike interest rates.

☆ Wells Fargo is pushing for quantity over quality in its private bank
▼ + stars: | 2023-05-04 | by ( Dan Defrancesco | ) www.businessinsider.com time to read: +5 min

Which brings us to a fantastic story about Wells Fargo's decision to reorganize how it serves its ultra-rich clients. And while many understood some changes were necessary, nearly everyone agreed the bank didn't go about it the right way. Read more about Wells Fargo's chaotic reorganization of its private bank. It's the latest move in what has been an active 12 months for the bank's tech division. The accounting firm had signed off on financial statements from Silicon Valley Bank, Signature Bank, and First Republic, the Financial Times reports.

A cluster of regional banks scrambled on Thursday to convince the public of their financial soundness, even as their stock prices plunged and investors took bets on which might be the next to fall. PacWest and Western Alliance were in the eye of the storm, despite the companies’ protestations that their finances were solid. PacWest’s shares lost 50 percent of their value on Thursday and Western Alliance fell 38 percent. They are also much smaller than Silicon Valley Bank and First Republic, which each had about $200 billion in assets when they collapsed. PacWest, based in Los Angeles, has about $40 billion in assets, and Western Alliance, with headquarters in Phoenix, has $65 billion in assets.

☆ Lawmakers dump First Republic shares amid banking crisis
▼ + stars: | 2023-05-04 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailLawmakers dump First Republic shares amid banking crisisAccording to Capitol Trades, which tracks lawmakers’ disclosures, First Republic Bank was the most heavily sold stock on Capitol Hill in March. New York Times reporter Kate Kelly joins 'Squawk Box' to discuss how the practice of Congressional stock trading has become a flashpoint.

☆ Short sellers reap $378.9 mln from losses in PacWest, two other bank stocks - Ortex
▼ + stars: | 2023-05-04 | by ( ) www.reuters.com time to read: +1 min

May 4 (Reuters) - Short sellers made $378.9 million in paper profits betting against regional banks First Horizon Corp (FHN.N), PacWest Bancorp (PACW.O) and Western Alliance Bancorp (WAL.N) in Thursday's session, analytics firm Ortex said. PacWest Bancorp (PACW.O) dove 57% on Thursday, dragging down other regional lenders, after the Los Angeles-based bank said it was in talks about strategic options. Western Alliance Bancorp (WAL.N) denied a report from the Financial Times that said it was exploring a potential sale. Over the first two days of May, short sellers made $1.2 billion from declines in stocks of U.S. regional lenders, according to Ortex. Short sellers typically sell borrowed securities and aim to buy these back at a lower price to pocket the difference.

☆ Analysts warn regional banks stocks are in a 'negative feedback loop' and detached from fundamentals
▼ + stars: | 2023-05-04 | by ( Jesse Pound | In Jesse-Pound | ) www.cnbc.com time to read: +3 min

The latest drop for regional bank shares is causing some Wall Street analysts to back away from their recommendations on the stocks, even if they still believe in the underlying fundamentals for the companies. Other regional banks also sold off, including a 19% drop for Western Alliance. The deposit update was not enough to reassure all Wall Street analysts about the health of regional banks, and there is concern that the drops in the stocks could reignite deposit flight. Meanwhile, RBC Capital Markets' analyst Jon Arfstrom stuck with his outperform rating on PacWest, but said only investors with strong stomachs should stick around. Western Alliance Another bank stock that has taken heavy loses in recent weeks is Western Alliance .

☆ There are limited options to fix the banking crisis, but one is gaining support
▼ + stars: | 2023-05-04 | by ( Jeff Cox | ) www.cnbc.com time to read: +4 min

Ackman didn't provide specifics on how he thinks a deposit guarantee program would work, but he said one is essential to restore investor confidence in regional banks. That has put pressure on midsize banks, and the S & P Regional Bank ETF has fallen 40% year to date. Short sellers have ganged up on some regional banks on the prospect that even those that are rescued or merged will see stock holders wiped out. "Renewed stress among regional bank stocks after market close may cause [Washington, D.C.] to reconsider priorities," Mayo said in a client note. "Unfortunately, there is a significant disconnect between the renewed pressure on regional banks and DC's posture," Mills said in a note.

☆ FDIC plans to hit big banks with fees to refill deposit insurance fund - Bloomberg News
▼ + stars: | 2023-05-04 | by ( ) www.reuters.com time to read: +1 min

[1/2] A sign reads “FDIC Insured” on the door of a branch of First Republic Bank in Boston, Massachusetts, U.S., March 13, 2023. REUTERS/Brian Snyder/File PhotoMay 4 (Reuters) - The U.S. Federal Deposit Insurance Corporation is planning to exempt smaller lenders from kicking in extra money to replenish the government's bedrock deposit insurance fund, and instead saddle the biggest banks with much of the bill, Bloomberg News reported on Thursday, citing people familiar with the matter. The FDIC is planning to release a highly anticipated proposal for refilling its deposit insurance fund as soon as next week, the report added. The FDIC and its flagship deposit insurance fund have been active since the Great Depression to provide an orderly resolution for failed banks and to reimburse certain customer accounts. The regulator estimates the failure of Silicon Valley Bank will cost the deposit insurance fund $20 billion.

☆ Cantor's Howard Lutnick says the banking crisis isn't over and the Fed is done hiking rates
▼ + stars: | 2023-05-04 | by ( Alex Harring | ) www.cnbc.com time to read: +1 min

The Federal Reserve should be done hiking interest rates after considering the impacts of the bank crisis, said Howard Lutnick, chairman and CEO of Cantor Fitzgerald and BGC Partners. Lutnick said on CNBC's "Squawk Box" that the exodus of deposits from regional banks is the equivalent to a full percentage point in interest rate hikes from the Federal Reserve. "Of course they're done," Lutnick said of the central bank's rate hike campaign. Lutnick said the banking crisis is still a problem, even as regulators have worked to calm customers, and indirectly investors, in recent weeks. Commercial bank deposits have fallen about $894 billion since March 2022, according to seasonally adjusted data from Fed .

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