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☆ PacWest Stock Surges 80%, Regional Banks Recover After Selloff
▼ + stars: | 2023-05-05 | by ( Gina Heeb | Joe Wallace | ) 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 JesseeShares of under-fire regional banks surged to recover some of their lost ground on Friday, though many were still on track to end the week nursing hefty losses. Bankers and government officials hoped the sale of First Republic Bank to JPMorgan Chase on Monday would draw a line under upheaval from the collapse of Silicon Valley Bank and Signature Bank in March. But investors continued to hunt for weak links for much of the week, dumping shares of midsize and smaller banks.

☆ PacWest Stock Surges 82%, Regional Banks Recover After Selloff
▼ + stars: | 2023-05-05 | by ( Gina Heeb | Joe Wallace | ) 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 JesseeShares of under-fire regional banks surged to recover some of their lost ground on Friday, though many still ended the week nursing hefty losses. Bankers and government officials hoped the sale of First Republic Bank to JPMorgan Chase on Monday would draw a line under upheaval from the collapses of Silicon Valley Bank and Signature Bank in March. But investors continued to hunt for weak links for much of the week, dumping shares of midsize and smaller banks.

☆ Biden’s Big Bank Contradiction
▼ + stars: | 2023-05-05 | by ( The Editorial Board | ) www.wsj.com time to read: 1 min

Today the roles have reversed, with Democrats refusing to negotiate, preferring to smear the 'MAGA Republican' opposition as 'extreme.' Images: Zuma Press/AFP via Getty Images Composite: Mark KellyRegional banks took another market drubbing on Thursday, as the financial panic rolls on despite regulatory assurances that all is well. The turmoil wasn’t helped Thursday when midsize TD Bank and First Horizon Bank called off their merger, blaming regulatory impediments. The merger cancellation followed the Biden Administration’s decision on Monday to give JPMorgan a sweetheart deal to acquire failed First Republic Bank . It’s good to be a really, really big bank these days.

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.

LONDON, May 4 (Reuters) - U.S. buyout house Blackstone (BX.N) is weighing options for Dutch merchant bank NIBC, including a possible sale, people familiar with the matter told Reuters. Blackstone has also been considering potential acquisitions in the absence of a sale, one person added. The Hague-based NIBC offers financing for industries such as automotive, commercial real estate, infrastructure and shipping, as well as retail mortgages. It has been exiting non-core businesses, including deal advisory and leveraged finance, in a bid to streamline its operations. The group had 22.8 billion euros of assets on its balance sheet at the end of last year and an equity value of around 2 billion euros ($2.21 billion), according to its 2022 annual accounts, which showed a profit of 179 million euros excluding non-recurring expenses.

☆ Opinion | First Silicon Valley Bank, Now First Republic. How Worried Should We Be About a Financial Crisis?
▼ + stars: | 2023-05-04 | by ( Amit Seru | ) www.nytimes.com time to read: +2 min

Just in the past few months, Silicon Valley Bank, Signature Bank and First Republic Bank have failed. Rapidly rising interest rates create perilous conditions for banks because of a basic principle: The longer the duration of an investment, the more sensitive it is to changes in interest rates. When interest rates rise, the assets that banks hold to generate a return on their investment fall in value. Thus, increases in interest rates can deplete a bank’s equity and risk leaving it with more liabilities than assets. So it’s no surprise that the U.S. banking system’s market value of assets is around $2 trillion lower than suggested by their book value.

☆ 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.

☆ PacWest Says It’s Exploring Options After Shares Plunge
▼ + stars: | 2023-05-04 | by ( Lauren Hirsch | ) www.nytimes.com time to read: +1 min

Deposits stood at $28 billion as of Tuesday, compared with roughly $29 billion that it said it held in late April. The bank released the updated details after its shares had plunged more than 50 percent in late trading on Wednesday. That drop came after Bloomberg News reported that the bank was working with advisers to explore options, including a sale. In premarket trading on Thursday, PacWest was down about 37 percent. Two other regional lenders, Western Alliance and Zions Bancorp, fell 19 percent and 10 percent.

☆ Automakers are pausing factory lines to help keep inventory low and prices high
▼ + stars: | 2023-05-03 | by ( Alexa St. John | ) www.businessinsider.com time to read: +4 min

Throughout the height of COVID, carmakers got used to getting high prices. But some carmakers might limit their inventory to keep supply down and prices up. Since recovering from COVID-related plant shutdowns and an extended shortage of chips required for today's tech-laden cars, companies like Ford, General Motors, and Stellantis have finally seen more cars head to dealer lots. But they got used to selling vehicles for high prices with minimal inventory on their lots. But shoppers shouldn't necessarily see some automaker's low inventory as a signal of high demand for a vehicle that they'd have to pay big dollars to compete on.

☆ Regional Bank Stocks Plunge Ahead of Fed Meeting
▼ + stars: | 2023-05-02 | by ( Gina Heeb | Rachel Louise Ensign | ) www.wsj.com time to read: 1 min

Illustration: Preston JesseeShares of a number of midsize lenders fell sharply Tuesday following the collapse of First Republic Bank, a sign that investors are still worried about the industry’s health in a world of higher interest rates. Banks that took a hit following the March collapse of Silicon Valley Bank fell the most. Los Angeles-based PacWest was down 25% in midday trading, while Phoenix-based Western Alliance fell 19%. Metropolitan Bank , based in New York, declined 20%.

John Barber, who was chair of 1,700-lawyer Lewis Brisbois' employment practice, said as many as 140 lawyers could eventually join the new firm, Barber Ranen. He said about 60 Lewis Brisbois lawyers are slated to join as partners. Los Angeles-founded Lewis Brisbois did not immediately respond to a request for comment on Tuesday. A 32-lawyer cybersecurity group left Lewis Brisbois to join Constangy, Brooks, Smith & Prophete in several cities in January. Read More:Partner group leaves Lewis Brisbois to launch new law firm44-member Lewis Brisbois cybersecurity team jumps to Constangy firmOur Standards: The Thomson Reuters Trust Principles.

☆ Another Bank Failure
▼ + stars: | 2023-05-02 | by ( German Lopez | ) www.nytimes.com time to read: +2 min

So when First Republic’s investment strategy began backfiring, depositors started to pull out their money in large numbers — a classic bank run. “The failure of Silicon Valley Bank made Americans more concerned about the safety of their deposits,” my colleague Maureen Farrell, who covers finance, said. “And First Republic looked a lot like Silicon Valley Bank.” The threat of further contagion is what led regulators and the financial system to move to try to stabilize the situation. The Fed also placed some of the blame on Congress, which in 2018 reduced the central bank’s oversight of so-called midsize banks like First Republic and Silicon Valley Bank. Some analysts argue that the worst is over: Silicon Valley Bank, Signature and First Republic were all outliers, and their similarities made them unusually vulnerable to the current moment.

☆ Manhattan federal prosecutor joins Kramer Levin law firm
▼ + stars: | 2023-05-02 | by ( Chinekwu Osakwe | Thomson Reuters | Chinekwu Osakwe Covers Legal Industry News With A Focus On Midsize Law Firms. Reach Her At Chinekwu.Osakwe Thomsonreuters.Com. | ) www.reuters.com time to read: +1 min

Law Firms Kramer Levin Naftalis & Frankel LLP Follow(Reuters) - New York-founded law firm Kramer Levin Naftalis & Frankel said Tuesday that it has hired former Assistant U.S. Attorney Jordan Estes, who co-led the general crimes unit in the Southern District of New York, for its white-collar and government investigations practice. Estes was the lead or co-lead prosecutor on 13 criminal trials ranging from securities fraud matters, insider trading, bank fraud, health care fraud and racketeering, Kramer Levin said. Estes helped secure last year's conviction of Trevor Milton, the founder of electric vehicle company Nikola Corp, on charges that he defrauded investors. In February, prominent Kramer Levin white-collar partner Barry Pollack left the firm to join New York midsize law firm Harris St. Laurent & Wechsler's new Washington, D.C. office. Read More:N.Y. law firm launches in D.C. with white-collar duoOur Standards: The Thomson Reuters Trust Principles.

☆ Law firm Haynes and Boone picks up Dallas deal maker
▼ + stars: | 2023-05-01 | by ( Chinekwu Osakwe | Thomson Reuters | Chinekwu Osakwe Covers Legal Industry News With A Focus On Midsize Law Firms. Reach Her At Chinekwu.Osakwe Thomsonreuters.Com. | ) www.reuters.com time to read: +1 min

May 1 (Reuters) - U.S. law firm Haynes and Boone has hired transactions lawyer Larry Shosid from midsize firm Bell, Nunnally & Martin in its founding city of Dallas, the firm said Monday. Bell Nunnally has around 60 lawyers in Dallas. Taylor Wilson, managing partner of Haynes and Boone, said in a statement that he has worked with Shosid in the past and is excited about his addition to the firm. Dallas-based Bell Nunnally's managing partner, Christopher Trowbridge, said the firm wishes Shosid well. Read More:Law firm tie-ups continue with Haynes and Boone combinationOur Standards: The Thomson Reuters Trust Principles.

☆ A Timeline of How the Banking Crisis Has Unfolded
▼ + stars: | 2023-05-01 | by ( Madeleine Ngo | ) www.nytimes.com time to read: +9 min

March 9Gregory Becker, the chief executive of Silicon Valley Bank, urged venture capital firms to remain calm on a conference call. March 10In the biggest bank failure since the 2008 financial crisis, Silicon Valley Bank collapsed after a run on deposits . Regional bank stocks plunged after the unexpected seizure of Silicon Valley Bank and Signature Bank , with shares of First Republic tumbling 60 percent. The Treasury secretary believed the actions by the private sector would help underscore confidence in the stability of the banking system. April 28The Fed released a report faulting itself for failing to “take forceful enough action” ahead of Silicon Valley Bank’s collapse.

☆ Ex-federal judge Yeakel joins law firm King & Spalding in Austin
▼ + stars: | 2023-05-01 | by ( Chinekwu Osakwe | Thomson Reuters | Chinekwu Osakwe Covers Legal Industry News With A Focus On Midsize Law Firms. Reach Her At Chinekwu.Osakwe Thomsonreuters.Com. | ) www.reuters.com time to read: +1 min

(Reuters) - A former federal judge in Austin, Texas, has joined King & Spalding's trials and global disputes practice group, the law firm said Monday. He said the governor's order violated federal law and would put children with disabilities at risk. Yeakel, who was appointed in 2003 by President George W. Bush and announced his retirement in March, will counsel clients on "all facets of the dispute process," and represent them in court, according to King & Spalding. Yeakel said in a statement King & Spalding has a strong dispute practice and a growing Austin office. Read more:King & Spalding hires ex-prosecutor in N.Y. amid investigations pushMaryland federal judge joins Gibson Dunn after leaving bench at 47Federal judge leaves Chicago bench for Latham law firmOur Standards: The Thomson Reuters Trust Principles.

(Reuters) - A group of at least eight partners has left law firm Lewis Brisbois Bisgaard & Smith, including national labor and employment chair John Barber, to start a new firm. Barber and seven other labor and employment lawyers based in California have left Lewis Brisbois, a firm spokesperson confirmed Monday. Lewis Brisbois co-chairman Bob Smith said in the Sunday statement the firm thanks the lawyers and wishes them well. Lewis Brisbois in February hired a new cybersecurity group, poaching six attorneys from Wilson Elser Moskowitz Edelman & Dicker including co-chair Robert Walker. Read more:44-member Lewis Brisbois cybersecurity team jumps to Constangy firmLaw firm Lewis Brisbois hires cybersecurity co-chair after group departureOur Standards: The Thomson Reuters Trust Principles.

☆ The Week in Business: High-Profile Media Ousters
▼ + stars: | 2023-04-30 | by ( Marie Solis | ) www.nytimes.com time to read: +4 min

The move came less than a week after the company paid $787.5 million to settle a defamation suit with Dominion Voting Systems. Soon after Mr. Carlson was fired, CNN announced that it had “parted ways” with Don Lemon, a longtime star on the network who most recently was a morning show co-host. First Republic’s troubles are part of a wider banking crisis that began with the collapse of Silicon Valley Bank in mid-March. (April 30-May 6)A Highly Anticipated Fed MeetingThese days, aren’t all meetings of the Federal Reserve highly anticipated? But the Fed signaled that much uncertainty lay ahead as it sought a narrowing path to a soft landing, made narrower by the collapses of Silicon Valley Bank and Signature Bank.

WASHINGTON—As a top Federal Reserve official, Lael Brainard sounded an alarm four years ago that rolling back rules on midsize banks could sow the seeds of a future crisis. Last month, after two regional lenders failed, Ms. Brainard found herself on a video call with President Biden explaining how to clean up the very mess she had warned about.

☆ Opinion | Private Equity Is Gutting America — and Getting Away With It
▼ + stars: | 2023-04-28 | by ( Brendan Ballou | ) www.nytimes.com time to read: +3 min

In this case, as in nearly every private equity acquisition, private equity firm benefit from a legal double standard: They have effective control over the companies their funds buy, but are rarely held responsible for those companies’ actions. This mismatch helps to explain why private equity firms often make such risky or shortsighted moves that imperil their own businesses. But it isn’t just that firms benefit from the law: They take great pains to shape it, too. The most prominent of these benefits is the carried interest loophole, which allows private equity executives to pay such low tax rates. Instead, Congress approved an amendment that largely exempted small and midsize companies owned by private equity firms from a new corporate minimum tax.

☆ Want to cash in on 'clean' hydrogen? HSBC shares its stock picks — giving one over 110% upside
▼ + stars: | 2023-04-25 | by ( Weizhen Tan | ) www.cnbc.com time to read: +3 min

Analysts have been very bullish about investing in an area of clean energy: hydrogen. "Clean" hydrogen remains a "more compelling" decarbonization option than batteries when it comes to trucks, ships, trains and planes, HSBC said in an April 20 note. Clean energy has been gaining impetus with the U.S. Inflation Reduction Act, and some regard hydrogen as a renewable power source. It gave the stock a price target of 80.30 yuan ($11.60), or potential upside of 114%. HSBC gave the stock a price target of 21 euros ($23), or potential upside of 32%.

☆ Opinion | The True Cost of a $12 T-Shirt
▼ + stars: | 2023-04-24 | by ( E. Benjamin Skinner | ) www.nytimes.com time to read: +1 min

Across the country, while inflation has siphoned middle-class wealth, American consumers have enjoyed a consolation prize: Apparel is dirt cheap. In 1993, you could buy a T-shirt for $13 — and get a midsize tank full of gas for about the same. Today, the full tank would cost more than three times as much. Over the last decade, the voices of the over 75 million vulnerable workers in the global garment and textile industry have been, like the products they made, steadily devalued. In mid-19th century Manchester, the textile trade fostered technological leaps that led to higher wages and lower prices for consumer goods.

☆ First Republic Bank Lost $102 Billion in Customer Deposits
▼ + stars: | 2023-04-24 | by ( Maureen Farrell | Rob Copeland | ) www.nytimes.com time to read: +1 min

Over that same period, it borrowed $92 billion, mostly from the Federal Reserve and government-backed lending groups, essentially replacing its deposits with loans. That’s a perilous course for any bank, which generally do business by taking in relatively inexpensive customer deposits while lending money to home buyers and businesses at much higher interest rates. First Republic is still making some money; it reported a quarterly profit of $269 million, down one-third from a year earlier. From March 31 to April 21, the bank said that it lost only 1.7 percent of its deposits and that most of those withdrawals were related to tax payments by its clients. The slide began roughly six weeks ago, when the midsize lenders Silicon Valley Bank and Signature Bank were taken over by federal regulators after customers pulled billions of dollars in deposits.

☆ First Republic Earnings Report to Shed Light on Depth of Bank Crisis
▼ + stars: | 2023-04-23 | by ( Gina Heeb | ) www.wsj.com time to read: 1 min

First Republic Bank caters to customers with high account balances, many with deposits over the FDIC’s $250,000 protection limit. Photo: Thalia Juarez for The Wall Street JournalFirst Republic Bank is scheduled to report first-quarter earnings Monday. The results will give investors insight into the extent of the damage after sharp deposit outflows at the troubled bank. First Republic has been at the center of a crisis of confidence in midsize and smaller U.S. banks spurred by the collapse of several banks in March. Concerns have mounted about other lenders that could face a liquidity crunch similar to the ones that ultimately took down Silicon Valley Bank and Signature Bank.

☆ The Week in Business: A Trial With a Twist
▼ + stars: | 2023-04-23 | by ( Marie Solis | ) www.nytimes.com time to read: +4 min

In an unexpected twist in the courtroom on Tuesday — after jurors had been selected and opening statements delayed — Fox News agreed to a $787.5 million settlement. But even at less than half that amount, the settlement is still one of the largest ever in a defamation case. Caveats released in August said vehicles and plug-in hybrids assembled outside North America were not eligible for the $7,500 credit. The list of eligible vehicles is expected to grow as carmakers fine-tune their supply chains and catch up with demand. When the bank reports its quarterly earnings this week, analysts expect to see an enormous flight of deposits — that is, customers pulling their money from the bank — and losses.

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